Gulf Funds Attract Entrepreneurs and Startups Despite War Challenges
Amid escalating geopolitical tensions in the region, Gulf and Middle Eastern markets continue to serve as a magnet for entrepreneurs and innovators from around the world.
In this context, the website "Economy of the East," citing Bloomberg, published a report highlighting the resilience of the startup ecosystems in major cities such as Abu Dhabi, Dubai, Riyadh, and Doha. Despite security and economic concerns and challenges imposed by the Iran war, sovereign wealth funds and generous government incentives continue to provide a strong support umbrella for promising startups, making the region a true testing ground for the resilience of ambitious strategies aimed at diversifying economies away from oil.
Last February, King Lai made the decision to relocate from Hong Kong to Abu Dhabi, joining the latest cohort of the emirate’s startup support program, "Hub71." Just days after his arrival, Iran began launching air strikes targeting Gulf states.
Although these events prompted some long-term residents to temporarily leave, and Lai received repeated advice from family and friends to return to his home country, he remained determined to stay. Since then, his company, "Bebrio," which specializes in business intelligence, has secured two new clients in the UAE and is currently seeking to attract local venture capital funds to secure a new funding round, according to statements he made to Bloomberg News.
Lai joins a growing group of founders attracted to Abu Dhabi, Dubai, Riyadh, and Doha, as governments accelerate plans to build competitive technological ecosystems on the international stage. Trillions of dollars in sovereign and private wealth, supported by attractive incentives, advanced business accelerators, and a low-tax environment, have become the foundational pillars underpinning visions to diversify economies away from traditional oil dependence.
With renewed mutual attacks between the United States and Iran this week, and rising concerns over the security of the strategic Strait of Hormuz, this strategic trend faces its toughest test to date. Although most founders have remained resilient and funding announcements continue to flow, investors believe the actual and profound impact of the conflict will not become clearly evident until the upcoming quarterly reports, when new funding rounds begin to reflect investment decisions made after the outbreak of hostilities.
Qatar is intensifying its investments in venture capital firms through its "Fund of Funds" program. Last year, it attracted Eduardo Saverin’s "B Capital." The program’s budget was increased from $1 billion to $3 billion prior to the outbreak of the war, and approximately one-third of this amount has already been deployed.
The "Startup Qatar" initiative has received over 7,700 applications and provided funding exceeding $51 million to approximately 45 global companies, including 11 firms attracted since the onset of the current conflict. The program requires at least one founder to relocate to Qatar to qualify for support.
An example of this is the relocation of Michael Lints, a partner at "Golden Gate Ventures," from Singapore to Doha in 2024, where he settled with his family throughout the duration of the conflict.
Lints stated, "We have intensified our communication and discussions with our investor partners, and everyone has remained calm and rational."
The company successfully closed two investment deals coinciding with the outbreak of the war and continues to successfully raise capital for its new $100 million fund, which was launched in 2024 with support from Qatari investors.
Dubai stands out as a historic business hub in the Middle East. Over the decades, the emirate has succeeded in building an integrated business environment anchored by robust private wealth flows, flexible regulations, and strong appeal to foreign talent. This ecosystem has given rise to a new generation of billion-dollar companies, including Careem, Tabby, Dubizzle, Property Finder, and Expanso.
For his part, Bahoshi, CEO of the Magnet platform, emphasized that the pace of new venture capital fund launches, the appetite of international investors, and activity in exit, merger, and acquisition operations will be the key indicators to monitor closely in the coming period to assess the market’s resilience.
