GCC Emerges as a New Strategic Anchor for Global Venture Capital

As venture capital funding slows in traditional markets such as the United States and Europe, attention is turning eastward toward the Gulf Cooperation Council (GCC). At the Future Investment Initiative (FII) in Riyadh, Saudi Arabia, a high-level panel titled “Is the GCC Becoming a New Strategic Anchor for the Global VC Ecosystem?” explored how the region is evolving from capital provider to innovation powerhouse.

Moderated by CNBC Arabia anchor Hussein Sayed, the discussion brought together some of the Gulf’s most influential venture and policy leaders: H.R.H. Prince Fahad bin Mansour AlSaud, president, Saudi G20 Startup20, G20YEA; chairman, Entrepreneurship Vision; Hussain Abdulla, partner at Golden Gate Ventures; Khaled AlKhattaf, CEO of the Saudi Investment Promotion Authority (SIPA); Dr. Bilal Baloch, partner at Shorooq Partners; and Noor Sweid, founder and managing partner of Global Ventures.

The panel examined the forces reshaping the global flow of venture capital, from sovereign wealth participation and regulatory reform to family office evolution and the creation of new exit markets. Notably, Prince Fahad bin Mansour Al Saud said that Riyadh has emerged as “the capital of capital—where founders raise funds and global investors meet LPs.”

Overall, the panel highlighted the Gulf’s development into one of the world’s dynamic innovation ecosystems worldwide.

1. Riyadh is redefining the starting point for global fundraising

Panelists described Riyadh as “the capital of capital,” with founders and funds alike now beginning their fundraising journeys in the Gulf rather than in Menlo Park or London. The FII conference itself has become a magnet for investors from every continent, reflecting the GCC’s transition from a passive capital source to an active global investment origin.

The region’s sovereign wealth funds—flush with liquidity from energy revenues—are now central conveners of venture deal flow.

2. Sovereign wealth and infrastructure have built the foundation for venture growth

Speakers emphasized that the Gulf’s massive infrastructure and industrial investments over the past decade have created fertile ground for a modern innovation economy. Governments are layering digital and AI-driven strategies onto established energy, logistics, and transportation platforms, using venture capital to accelerate diversification.

Public investment funds are not merely allocating money, they are architecting entire ecosystems designed to sustain innovation over decades.

3. Family offices are evolving into institutional-grade venture investors

The Gulf’s long-standing merchant culture is re-emerging in a new form. Family-owned conglomerates that once focused on trade and real estate are now allocating capital to venture vehicles, leveraging their appetite for risk and local market insight.

This generational shift from family-run enterprises to family-backed VCs is embedding entrepreneurship deeper into national economies and aligning private wealth with government diversification goals.

4. The next challenge: value creation and viable exits

While capital is abundant, speakers cautioned that investment alone is insufficient. The region must focus on building companies with sustainable value and governance practices that meet global standards.

Exit pathways remain the biggest gap: IPO liquidity is limited, and most successful exits today occur through mergers and acquisitions rather than public listings. Regulators across the GCC are responding with new capital-market frameworks, but panelists agreed that more regional investment banks, research & development Biotech accelerator hubs, and advisory firms are needed to mature the exit environment.

5. The GCC’s venture model may leapfrog the traditional playbook

Rather than replicating Silicon Valley’s high-risk, high-burn approach, Gulf investors are crafting a model that prizes sustainability, profitability, and long-term value creation. Discussions explored how tokenization and digital asset platforms could provide alternative liquidity routes for later-stage startups, allowing the region to leapfrog legacy equity-market structures.

With sovereign vision strategies such as Saudi Vision 2030 driving coordinated entrepreneurship policy, the GCC is building not just companies but new financial architectures.

Conclusion

With U.S. venture funding down more than 50% from its 2021 peak, the Gulf Cooperation Council is stepping into the global funding vacuum with patient capital, regulatory reform, and a strategic vision for innovation. Whether this momentum cements Riyadh, Dubai, and Doha as enduring anchors for global venture capital will depend on how effectively the region can translate abundant capital into scalable, sustainable value creation and credible exit markets.