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RIYADH: Artificial intelligence is reshaping venture capital worldwide — not just as a thematic investment opportunity but as a core enabler of operational transformation. 

�������� exemplifies this evolution, as AI adoption in the Kingdom is not only accelerating but is also closely aligned with the Vision 2030 strategy for economic diversification.

“Saudi VCs are actually ahead of many regions in AI adoption for deal sourcing and due diligence,” said Charles Kickham, managing director of Cayenne Consulting, told Arab News.

“They’re using platforms like Affinity and Dealroom that incorporate AI for market intelligence and portfolio tracking,” he added.

This shift reflects a broader global trend. According to data from Gitnux, 42 percent of venture capital firms worldwide now use AI for deal sourcing, and 68 percent believe the technology will significantly improve decision-making accuracy. 

Kickham attributes ��������’s competitive edge to the institutional scale and advanced digital infrastructure of its sovereign investment entities. 

“The sovereign wealth funds there have massive data advantages that smaller Western VCs don’t have,” he said, adding: “That kind of access gives them an edge in identifying patterns and tracking early-stage ventures with high scalability potential.”

Vision 2030 drives premium valuations

In the Kingdom, this is more than an operational upgrade — it is a policy-aligned transformation. “The cultural factor that’s unique is the emphasis on AI that aligns with Vision 2030’s diversification goals,” Kickham explained. 

The Cayenne Consulting managing director added that Saudi investors are specifically hunting for AI startups that can reduce oil dependency, and this targeted strategy is influencing local deal dynamics and startup valuations.

“I’ve seen this drive premium valuations for fintech and logistics AI companies by 20 to 30 percent compared to similar deals elsewhere,” he added.

A report from MAGNiTT in June emphasized the growth of AI in the Kingdom, with the platform added that the technology was the main driver of investment activity both in the private and public markets in the US and other mature markets in 2024.

It added that based on its proprietary data, MAGNiTT expects AI funding to double in 2025 due to increased investor attention to innovative startups.

Global VC firms turn to automation

Globally, AI’s integration into the venture process is advancing across regions and firm sizes. In India, for instance, venture capital firms are rapidly deploying AI-based systems to streamline investment workflows and sharpen competitive advantage. 

“AI has redefined the front end of our venture workflow, from deal sourcing to diligence, giving us unprecedented scale, speed, and precision,” said Rahul Agarwalla, managing partner of SenseAI, in an interview with Entrepreneur in June.

“At SenseAI, our proprietary engine surfaces technical founders months before they raise, using a live signal graph of research papers, product launches, and social media activity,” he added. 

Gitnux reports that 75 percent of top-tier VC firms now rely on proprietary deal-scanning tools and analytics platforms. 

Additionally, 50 percent of firms use natural language processing-based sentiment analysis during due diligence to assess market dynamics and founder behavior in real time.

AI-powered dashboards have also delivered measurable gains in portfolio management, with 70 percent of firms reporting improvements in operational efficiency.

The adoption of AI tools is not limited to large-scale firms. Even mid-sized and emerging market players are leveraging accessible platforms to enhance decision-making. 

“We’re seeing strong interest from mid-market firms in Asia and the Middle East that don’t have internal data science teams but want the same capabilities,” said Clyde Anderson, CEO of GrowthFactor.ai. 

“They’re looking for AI tools that are usable without deep technical knowledge,” Anderson told Arab News.

Both Kickham and others cautioned that while AI offers significant leverage, human insight remains critical, particularly when evaluating founder qualities and long-term potential.

“The main challenge is talent retention,” Kickham said of the Saudi market. “Saudi funds can identify great AI deals but struggle to provide the technical mentorship that Silicon Valley VCs offer.” 

To address this, Saudi investors are increasingly collaborating with international funds. “They’re compensating by co-investing with international funds more frequently than other regional markets,” he added. 

“It’s a pragmatic approach — leveraging external technical strength while continuing to build internal capability.”

Talal Al-Jabri, founder of the recently launched Wyld VC, has pinpointed the impact of talent in boosting AI.

During the launch of the company’s first AI-native fund in May, Al-Jabri said: “The region’s greatest gap is AI talent.”

Al-Jabri went on to say that the GCC is leading the charge in catalyzing an AI revolution — through massive infrastructure investments, advanced research and model deployment, and transparent, innovation-forward regulation.

Human judgment still key in venture

Agarwalla emphasized that AI cannot replace the human element central to venture capital decision-making. 

“Models can’t assess founder resilience, ethical integrity, or long-term vision — only repeated human interaction can,” he said. 

“AI gives us leverage; human judgment gives us conviction.” In his view, the firms that find the right balance between automation and experience will shape the next generation of venture outcomes. 

“Venture capital is paid to underwrite non-linear futures and that’s a deeply human endeavor rooted in taste, contrarian insight, imagination, and pattern-breaks that AI cannot model or predict,” Agarwalla added.

While challenges remain, including talent shortages, infrastructure constraints, and limitations in local language models, the trajectory for AI in venture capital is clear.

“The expectation now is real-time, data-backed decisions,” Anderson noted. “AI isn’t replacing investors — it’s becoming table stakes for modern investment processes.”

In markets like ��������, where policy, capital, and technology are converging, the impact is particularly profound. 

“They’re not just following global trends— they’re aligning capital and technology to national policy, which sets them apart,” Kickham said. 

As AI becomes embedded in the global VC toolkit, such alignment may offer a lasting strategic advantage in a highly competitive, data-driven future.
 

RIYADH: Startups across the Middle East and North Africa saw multiple funding rounds in the past week, as companies across a range of industries seek geographical expansion. 

Earlier this month, a report released by Wamda revealed that startup investment across the MENA region accelerated sharply in July, with total funding reaching $783 million, representing a 1,411 percent rise compared to the same month in 2024. 

�������� led regional funding activity, securing $396.5 million across 16 deals in July, while the UAE followed with $359 million raised in 22 startups.

Gathern raises $72 million

��������’s vacation rental platform Gathern raised SR270 million ($71.94 million) in a series B funding round, led by Sanabil Investments, a wholly owned subsidiary of the Kingdom’s sovereign wealth fund. 

The funding round also witnessed the participation of STV, Pinnacle Capital, Nuwa Capital, and Endeavor Catalyst. 

Gathern said that the funding will help the company prepare for an initial public offering on Tadawul in the near future, without providing a specific timeline. 

“The round was completed at a valuation exceeding SR1 billion, marking a significant step toward our planned listing on the Saudi Exchange (Tadawul) in the near future,” said the company in a statement. 

It added that the fresh funding will also help the firm expand locally and regionally. 

“We will continue to invest in developing our technology architecture, enhancing the user experience through AI technologies, expanding our network of hosts and increasing the diversity of offerings,” the statement added. 

The company said it currently possesses 72,000 private hospitality units operated by local hosts across ��������, representing nearly 15 percent of the total hotel and non-hotel supply in the Kingdom. 

Fahy secures strategic investment of $1.75 million

Fahy, a game development studio in ��������, has secured a strategic investment of $1.75 million from Impact46 and Merak Capital.

In a statement, the company said that the latest funding reflects the studio’s potential and its commitment to shaping the future of mobile gaming while contributing to ��������’s expanding gaming ecosystem.

Founded in early 2023 by Hani Hashem, Owis Al-Saour, and Fahad Al-Shibl, Fahy rapidly gained momentum upon their enrollment in Neom’s exclusive LevelUp accelerator, where they transformed from an indie team into a scalable studio.

The company further expanded its reach through a publishing partnership with Kwalee, gaining access to world-class expertise in user acquisition, monetization, and global game publishing.

“This investment fuels our mission to push the boundaries of mobile gaming, expand our production capabilities, and attract top talent to the Kingdom,” said Hashem. 

He added: “While our journey is still in its early stages, the backing from Impact46 and Merak Capital is yet another testament to Saudi’s growing ecosystem that is empowering us to compete on the world stage.” 

�������� is home to over 24 million gamers, representing 67 percent of the Kingdom’s population, with local players outspending their global counterparts. 

“With the gaming sector projected to multiply in size globally by 2030, investments in game development and publishing are critical for establishing the Kingdom as a dominant force in the industry,” said Fahy in a statement. 

Starvania Studio secures $1.1 million funding

Saudi-based Starvania Studio has secured an investment of $1.1 million from Merak Capital and Impact46. 

The company said in a statement that funding will contribute to accelerating Starvania Studios’ growth trajectory by developing high-quality, immersive console and PC games. 

The financial assistance will also be used to enhance the studio’s operational infrastructure and production pipelines. 

“With the backing of Merak Capital and Impact46, we now have the resources to expand our development pipeline, grow our team, and push creative boundaries,” said Meaad Aflah, CEO and co-founder of Starvania Studios. 

Basmah Al-Sinaidi, managing partner at Impact46, said: “Starvania is building original worlds with the kind of focus and polish that makes a studio stand out on PC and console. It’s a strong signal of how far Saudi game development has come — and the ambition it can carry globally.” 

Professional.me secures $3.1 million seed round

Professional.me, an Abu Dhabi-based recruitment platform, powered by artificial intelligence, raised $3.1 million in a seed funding round, backed by Raha Beach Ventures, bringing its total funding to $4.6 million.

The company previously raised $1.5 million in a pre-seed round, also led by Raha Beach Ventures. 

Through the funding, Professional.me aims to expand AI-powered hiring processes across Europe, Middle East and Africa. 

The funding is also expected to boost engineering, strengthen research partnerships, and scale the platform’s global reach amid growing demand for inclusive AI hiring.

“We’re not digitising resumes; we’re replacing them. Each company and professional gets their own micro-LLM that acts as a context-aware advocate, surfacing the best-fit matches automatically and meaningfully,” said Ryan Adams, founder and CEO of Professional.me. 

The company claims to have processed over 300,000 professional profiles, serving clients across Europe, the UK, and the MENA region, since its launch in October 2024. 

Hypeo Ai secures investment from Renew Capital 

Morocco-based influencer marketing firm Hypeo Ai has secured an undisclosed investment from Renew Capital. 

The funding is expected to help the firm strengthen its smart infrastructure for the Middle East and Africa.

The financial assistance will also allow the company to expand its platform features, onboard more creators and brands, and develop a B2C AI-powered coaching companion for wellness and lifestyle users.

Founded by Meriam Bessa, Oussama Sekkat, and Salah Eddine Mimouni, Hypeo Ai provides an AI-powered influencer marketing platform that connects brands, agencies, and creators across the MENA region and beyond, according to the company’s website. 

“Our region has no shortage of talent. What’s been missing is smart infrastructure. We’re building tools that allow brands and creators to meet faster, match better, and work smarter with the power of AI,” said Bessa.