Trillion-Dollar Pools of Capital Mask Middle East VC Paradox

Despite a strong first quarter for startup funding, the Middle East’s venture ecosystem faces a unique paradox: The region’s sovereign wealth funds and family offices wield trillions of dollars and yet startups are struggling to access the funding they need to scale.

At the heart of the problem lies a gap in late-stage venture capital, particularly at the Series B stage and beyond. In a region that’s become a hub for initial public offerings in recent years, this threatens to slow the pipeline of IPO-ready companies in the Middle East.

Government-owned companies and long-established private businesses have dominated the ...