Gulf venture firms delay exits as AI hype and regional tensions linger
Startups in the Gulf are staying private longer due to weak IPO markets, AI-focused capital flows and uncertainty from the Iran conflict.
According to private-capital tracker Pitchbook, Gulf startups are extending their private phases amid a global slowdown in exits and IPOs caused by volatile public markets. The UAE ranks among the top twenty venture-capital hubs, but its exit value per capita stands at just $402, far below Singapore's $8,000 and the United States' $12,600. Nalin Patel of Pitchbook notes that AI investment is concentrated on a few U.S. firms such as OpenAI and Anthropic, diverting capital from regional markets.
The war in Iran further dampens confidence, with local investors scaling back and foreign buyers hesitating on Middle-East listings. After an initial shock, business activity has normalized, though the lack of exits reflects market conditions rather than company quality. Recent scrutiny by Saudi Arabia’s stock-market regulator into poor IPO performance underscores the challenges facing Gulf companies seeking public capital.
Why it matters
The slowdown limits funding opportunities for Gulf innovators and hampers the region's shift away from oil-based economies.
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