Why you can’t ignore the Middle East's booming venture capital scene

What if the most transformative ventures of the next decade are fueled by the bold vision of the Middle East? It’s not far-fetched. The Middle East is rapidly establishing itself as a global leader in venture capital. With sovereign wealth funds, ambitious founders, and a clear vision for innovation, the region is driving transformative growth and shaping the future of industries worldwide.

Allocator One’s Founding Partner, Felix Staeritz, recognized this momentum early. Through FoundersLane, Felix worked alongside Riyad Bank, SAPTCO, and Medgulf to launch digital ventures that redefined regional markets. Over almost a decade, he developed a deep appreciation for the region’s energy, scale, and relentless drive for reinvention.

Allocator One has translated these insights into action. By analyzing 75% of the world’s sub-$50 million Fund 1s launched by specialist fund managers in 2024, and leveraging this data, we’ve developed a unique perspective on venture capital in the Middle East. As a result, we’ve earmarked over $50 million for commitment in the region over the coming years.

Let’s dive into some of our key findings:

The Highlights

• Middle East-focused funds applying to Allocator One have doubled from Winter 2023 to Winter 2025, reflecting a 100% increase

• More than 37 Middle East-focused funds are emerging, with target sizes ranging from $2.5M to $25M.

• The Middle East’s new generation of fund managers demonstrates a clear appetite for tackling global challenges like climate change, healthcare efficiency, and financial inclusion. Their focus on innovation reflects the region’s pivotal role in the global VC ecosystem.

“Allocator One's commitment to the Middle East highlights a keen understanding of the region's untapped potential and its pivotal role in shaping global venture capital. Their data-driven approach and collaborative spirit align seamlessly with our vision for innovation and sustainable growth" - Dr Mohamed Almajed, Senior Advisor at MISA

Emerging trends from Middle East funds

Sectoral Prioritization:

Fintech Dominance: A significant proportion of Middle Eastern applicants (over 25%) are focused on fintech solutions, reflecting the region's rapid shift toward digital payments, financial inclusion, and decentralized finance platforms.

Example: Applications highlight a surge in interest in SaaS platforms and neo-banking models targeting underbanked populations in North Africa and the Gulf.

Life Sciences and Digital Health: Nearly 20% of applicants from the region are pursuing health-tech ventures, leveraging AI, telemedicine, and drug discovery technologies to address aging populations and improve healthcare delivery.

Example: Applications spotlight AI-driven health solutions for diabetes management, a key regional health challenge.

“Allocator One is redefining venture capital, setting a global benchmark for strategic, high-impact investment. Their focus on the Middle East reflects a deep understanding of emerging markets and their role in shaping global growth. With a unique ability to translate vision into transformative outcomes, Allocator One is leading the future of the industry.” - Riad Abdo, Strategic Investments and Partnerships

Geographic Synergies:

Middle Eastern applicants are increasingly targeting cross-regional opportunities. Over 30% of applicants cite Africa-Middle East collaborations, leveraging shared challenges like energy access and logistics inefficiencies to build scalable ventures.

Example: One applicant is bridging Egypt’s talent pool with GCC funding to develop clean energy startups focused on urban cooling systems.

Climate Technology as a Rising Star:

Applications indicate a growing focus on climate tech solutions, with over 15% explicitly targeting renewable energy, water efficiency, and carbon capture technologies. This aligns with the region’s increasing investment in sustainability and green technologies, driven by national strategies like Saudi Arabia’s Vision 2030.

Solo GP Revolution:

More than 60% of applicants from the region are solo GPs, reflecting a burgeoning trend of highly specialized fund managers with deep expertise in their respective fields. These applicants frequently leverage local accelerators and government support to build their funds.

Why sub $50m funds are becoming the most attractive asset class in venture

“By anchoring exceptional fund managers and driving investments into key sectors, Allocator One is accelerating the Middle East’s journey toward becoming a hub for transformative technologies and sustainable growth.” - Mohamed Al Almudaifer, Head of Digital Economy Program 

As we delve into the transformative potential of first-time fund managers from the Middle East, it's vital to highlight individuals shaping this new wave of venture capital. Allocator One has had the privilege of anchoring Noa Khamallah (Don’t Quit Ventures) and Simon Lancaster (Omni Ventures), two exceptional first-time fund managers driving impactful investments in emerging markets and transformative technologies.

Noa Khamallah, founder of Don't Quit Ventures, brings a personal mission to empower start-ups in wealthy underserved regions. A self-taught serial exited entrepreneur, Noa has built his fund on the belief that emerging markets like the Middle East offer untapped potential for innovation. His investments focus on scalable solutions for the backbone of these economies aiming at SME’s & SMB’s to bridge gaps in financial access, healthcare, e-commerce, and other correlated markets.

"I assess Middle Eastern startups by prioritizing founders with regional expertise and global perspectives, evaluating scalability through market size, digital penetration, and cross-border potential (e.g., UAE to Saudi Arabia). Competitive moats, network effects, and local adaptations are critical. For ROI in emerging markets, I target a 10x return in 5–7 years, focusing on M&A exits while accounting for macroeconomic and currency risks. Investments emphasize high-growth sectors with $1M+ revenue traction (Series A), strong governance, and follow-on reserves across portfolios of 15–20 companies."

Noa has backed a number of startups in the Middle East including  Ruya and Firnas

Simon Lancaster, co-founder of Omni Ventures, takes a different yet equally impactful approach. With over 15 years of engineering experience at tech giants like Apple and Google, Simon’s fund targets startups revolutionizing manufacturing technologies. By focusing on the Middle East’s manufacturing challenges—such as supply chain inefficiencies and industrial modernization—he aims to accelerate the region’s industrial transformation through cutting-edge solutions.

"I focus on scalable technologies aligned with the Middle East's industrial diversification and sustainability goals, emphasizing green manufacturing and AI-driven solutions for immediate ROI. Key areas include manufacturing tech for oil and gas and high-tech sectors to boost productivity and sustainability. To meet LP ROI expectations, I prioritize software-centric investments that enhance automation, supply chain efficiency, and sustainability, offering shorter development cycles and predictable returns while supporting the region's modernization and global leadership."

"In 2022, we met Firas Khalifeh, founder of Carbon Mobile, who began his journey in Syria and transitioned to hardware after a career in software. His innovative perspective led to the world’s first carbon mobile phone in 2021. Starting his company from a refugee camp in Germany, he patented groundbreaking technology with applications in consumer electronics, automotive, and aerospace. Now, after collaborations with Qualcomm and Sabic, and setting up a Silicon Valley HQ, he’s partnering with a leading Middle Eastern entity to ignite regional innovation."