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A Bloomberg report highlighted a paradox in the Gulf where sovereign wealth funds manage trillions of dollars yet startups face challenges accessing the late-stage venture capital needed to scale, particularly from Series B onward. The gap threatens to slow the pipeline of companies ready for initial public offerings across the Middle East. Magnitt data indicates that just 6.5 percent of funded startups in the region have gone public over the past decade, raising concerns about long-term exit opportunities. Sovereign-backed vehicles have provided support at early stages while late-stage funding remains comparatively limited.
EnterpriseAM cited the report in noting that exceptions such as Tabby, which secured $160 million in a Series E round in February 2025, stand out against a backdrop of thinner regional capital at growth phases. Property Finder, a prominent Dubai startup, obtained its Series B from Sweden’s VNV Global before raising a $90 million debt round led by U.S.-based Francisco Partners. Such moves abroad risk shifting intellectual property, jobs and future listings away from the UAE, according to local fund executives.
Emirates Growth Fund Vice Chair and Managing Director Najla Al Midfa stated that when UAE-founded companies raise funding outside the region, authorities risk losing not only the capital but also associated intellectual property, employment and eventual public listings. She emphasized the importance of developing local funding sources for scale-stage firms to sustain the ecosystem. The observation aligns with broader assessments that late-stage appetite has not kept pace with early-stage momentum.
Wamda figures show MENA startups raised $1.7 billion across the first half of 2026, with the UAE accounting for $1.2 billion in 83 deals and hosting eight of the region’s later-stage rounds. Fintech captured the largest share of UAE capital at $409 million while logistics and proptech also drew significant sums. Nevertheless, reports indicate that access to dedicated lead investors for growth equity has remained constrained, with many rounds relying on debt or international participants.
Magnitt data reviewed by EnterpriseAM in August 2026 revealed that MENA-focused venture funds held approximately $1.45 billion in undeployed capital, representing 88 percent of the $1.64 billion committed across 17 funds since 2024. Only $197 million had been invested by the first half of 2026, with deployment concentrated in Saudi Arabia followed by the UAE. Ten of those funds had deployed less than 10 percent of their targets, reflecting the early stage of the vehicles and selective investment criteria at growth phases.
The funding environment has prompted some startups to adapt by seeking alternative capital sources or focusing on cash-flow positivity, according to sector analyses. Regional agtech and other verticals have similarly encountered investor caution due to longer return horizons and perceived scalability limits. Industry participants continue to call for enhanced coordination to bridge the late-stage gap and support a healthier transition toward public markets.
