For years, startup conversations in the GCC revolved around ambition, how fast the region could build companies, how quickly capital could be deployed, and how loudly founders could announce their arrival. Now, the focus is shifting. The key question is how the region can turn its momentum into lasting growth.

Across conversations with venture capitalists, sovereign investors, and banking leaders, a shared narrative is taking shape. Venture capital in the Gulf is maturing, shaped by policy, demographics, and geopolitical realities. At the same time, banks—once considered peripheral to startup growth—are becoming central to how early-stage companies survive volatility and scale responsibly.

It isn’t about hype or soaring valuations. It is about building infrastructure, staying disciplined, and how private capital and institutional finance are working together in one of the world’s fastest-changing markets.

FROM SPEED TO STRUCTURE

Few investors describe the pace of change in the Gulf as incremental. Alexander Wiedmer, co-managing partner at Rasmal Ventures, says the defining feature of regional venture capital is its rapid evolution.

“The main distinguishing factor of VC in the region is that it’s changing faster than it has changed anywhere else in the world,” he says. “VC today is not the same as it was five years ago.”

This rapid growth has packed decades of progress, seen in the US or Europe, into a few short years. The Gulf now has more funds, more institutional capital, and more government participation than ever before.

Reflecting on how different the market looks compared to its early days, Stephanie Nour Prince, partner at Nuwa Capital, says, “We used to be part of one of the earliest early-stage funds in the region, called Wamda. About 10, 15 years ago, we were one of three firms….That has completely changed.”

She points out that even though capital has increased, access to the “right” deals has become more competitive, not easier. Today’s cap tables include angels, family offices, and institutional investors from the start, showing the market is stronger.

That shift has not happened in isolation. As private capital diversified and deal-making became more sophisticated, governments across the region began playing a more deliberate role in shaping where venture capital flows and what it is expected to build.

Amal Dokhan, managing partner at 500 Global, underlines this transition as a deliberate pivot by governments across the region.

“We’re moving from momentum to scale,” she says. A decade ago, the priority was visibility–creating founders, building buzz, and putting the region on the map. Now, national agendas, regulatory sandboxes, and sovereign investment strategies guide where capital flows.

“Once you have all these pieces,” Dokhan explains, referring to founders, regulators, capital, angels, and markets, “then what happens now is that our role as VCs is just to put pieces together.”

WHY RELATIONSHIPS STILL MATTER

Even with the influx of capital and formal venture markets, the Gulf remains deeply relationship-driven. Wiedmer notes that startups here often need to internationalize faster than their US counterparts, but they also need to navigate regulators and decision-makers more closely.

“Those companies that succeed are the ones that are plugged into the regulator, the decision maker,” he says. “More so than other markets.”

Prince agrees, adding that venture capital in the region carries an added responsibility. With a young population across MENA, empowering founders is not just an economic play, but a demographic one.

This focus on relationships now extends beyond venture funds to include banks, an area where startups have often faced challenges.

WHEN BANKS ENTER EARLIER

Ismail Al-Emadi, executive vice president of SME Banking at QNB Group, says startups today are not just approaching banks earlier—they are relying on them in ways that were rare just a few years ago.

“Yes, definitely,” he says when asked whether more startups are turning to banks today. “Many startups are going to banks… the applications we receive from them are increasing.”

He explains that this change shows a bigger shift in how early-stage companies in the region fund and run their businesses. Venture capital alone is no longer enough for growth. Now, governments, regulators, and banks are more involved in taking on early risks, especially for SMEs that are still vulnerable to market ups and downs.

Al-Emadi points to the growing volume of applications flowing through government-backed channels as evidence of this change. “You can visit our colleagues at QDB, and the numbers are amazing,” he says. “The applications we receive from them are increasing. It’s been growing rapidly.”

For founders, this growing dependence on banks is not just about access to capital, but about access to infrastructure. Al-Emadi says many SMEs struggle less with ideas than with execution—payments, payroll, inventory, compliance, and cash flow management—especially in their early years.

“We created the platform for them to operate, to focus on their business,” he explains. “We give them the platform that happens in day-to-day activity for salary payments, for inventory payments… multi currencies and all these available.”

This operational support, he adds, increasingly differentiates banks that are relevant to startups from those that are not. SMEs often lack CFOs, HR teams, or risk management functions, making them particularly vulnerable to price shocks, supply chain disruptions, and sudden regulatory changes. Banks, in turn, are being forced to adapt their own systems to meet founders where they are.

The result is a relationship that is less about simple transactions and more about working together. Banks handle the complex parts so startups can focus on building, and venture capital becomes just one part of a larger financial system instead of the only way to survive.

WHEN CAPITAL GETS PICKIER

As venture capital grows, investors are becoming more selective. Al-Emadi says founders now face higher expectations, not only in technology but also in how they communicate and manage their companies.

“There are very nice SME companies,” he says, “but the person cannot present himself to attract their venture capital.” He adds that early-stage founders must be more open—on terms, transparency, and control—if they want investors to engage.

Venture capitalists echo this sentiment. Dokhan says the market has become less enamored with hype and more focused on fundamentals. “Give me a boring solution that works, that monetizes, that has the right unit economics, I’m in,” she says.

This shift explains the rise of governance, compliance, and insurance technology across the region—sectors long ignored but offering clear paths to revenue.

“Nobody wanted to touch insurance,” Dokhan says, “but there are a couple of really good insurtech companies today.”

FINTECH, AI, AND THE NEXT INFRASTRUCTURE LAYER

Fintech remains one of the most funded sectors in the region, though Wiedmer cautions that part of the surge is artificial.

“It’s a bit of a bubble,” he says, noting the many new fintech hubs and regulatory test areas. Still, he sees real reasons why fintech is strong in the GCC, like a young, tech-savvy population and regulators who are open to trying new things.

At the same time, AI is reshaping venture priorities.

“Five years ago… a lot of VCs were still looking at copy-paste models,” Wiedmer says. “Now we’ve become more demanding.” Rather than horizontal AI tools, he says investors increasingly favor verticalized solutions tied to strategic sectors such as logistics, healthcare, and energy.

This aligns closely with sovereign investment strategies across the Gulf, where governments are not just funding startups, but shaping the markets they operate in.

THE SOVEREIGN FLYWHEEL

Aftab Mathur, managing partner at Temasek, describes venture development in emerging markets as a two-phase process. “Especially in emerging markets,” he says, “the sovereigns and the governments can play… that initial catalyst.”

Once capital and risk appetite are established, the market must take over. The goal is a self-sustaining flywheel, one where founders build companies, reinvest, and mentor the next generation.

This model is now easier to see in the GCC, where government funds and programs are supporting venture capital, and banks and regulators are making it easier for startups to operate.

Mohsin Pirzada, head of funds at Qatar Investment Authority, emphasizes access—particularly access to compute power for AI startups—as a strategic differentiator.

On the opening night of the Web Summit, H.E. Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani, Prime Minister of Qatar and Minister of Foreign Affairs, announced a major expansion of Qatar’s state-backed venture strategy, revealing an additional $2 billion in capital for the Qatar Investment Authority’s Fund of Funds program. 

The move brings the program’s total capital commitment to $3 billion, reinforcing Qatar’s push to attract global venture capital firms, deepen its entrepreneurial ecosystem, and accelerate economic diversification beyond hydrocarbons. 

The program now supports 12 regional and international fund managers working in AI, fintech, blockchain, infrastructure, and special situations. This shows how Doha is becoming more connected to global venture markets.

“What was announced… is access to compute power available to start-ups based in Doha,” Pirzada says, positioning Qatar as a magnet for global talent amid tightening immigration policies elsewhere.

WHERE BANKS AND VCs CONVERGE

For founders, the coming together of venture capital and banking brings both opportunities and challenges.

Stressing that SMEs remain fragile, especially in volatile markets, Al-Emadi says many lack HR teams, CFOs, or long-term planning, so flexibility from banks and regulators is essential. This flexibility now covers financing, payment systems, and risk checks. Banks are adapting quickly, but it comes at a cost.

“We have to invest in the cause and then become invested in the new platform,” Al-Emadi says, referencing the pace of technological change. “But we have to keep with the curve of the market.”

THE NEW PLAYBOOK

These conversations reveal a new approach to venture growth in the region. Startups are now expected to think globally, stay disciplined, and be ready for banking from the start.

Venture capital by itself is no longer enough. Founders now have to work with a complex mix of investors, banks, regulators, and government goals. In return, they get something earlier founders did not have: infrastructure.

As Dokhan puts it, the role of venture capital is no longer just to invest, but to connect: to policy, to capital, and to real economic demand.

And as banks become more embedded in the startup journey, the Gulf’s venture ecosystem is increasingly looking less like an experiment and more like an economy.