Saudi’s first defense venture capital fund is here: MasnaVentures wants to raise USD 100 mn from US and Saudi investors to help defense tech companies localize manufacturing in the Kingdom, co-founder and general partner Lucien Zeigler tells EnterpriseAM.

What’s in the cards? The fund will target some 10 transactions spanning unmanned aerial vehicles, aerospace, counter-UAS, automated systems, AI-enabled defense systems, and maritime, Zeigler tells us.

The players: Masna is led by US entrepreneur Lucien Zeigler and Nehal Farooqui, both of whom have existing footprints in the US-Saudi defense corridor. Zeigler is CEO of Redsalt Defense and its US-Saudi JV SR Advanced Strategic Systems (SR2), while Farooqui heads device services firm Zension Technologies.

Why it matters

The fund signals a bigger role for the private sector in defense localization. “For many US defense startups and mid-sized companies, Saudi Arabia is clearly attractive, but historically difficult to enter without scale, local infrastructure, or deep familiarity with localization and regulatory requirements,” Zeigler said.

The pitch: New JVs or special purpose vehicles — bringing together Saudi manufacturing capabilities and advanced US systems — need “last-mile” capital at formation and early scale-up to meet demand on compressed timelines. “This is the core pipeline Masna Ventures is designed to support: structured, project-backed growth equity with a risk-return profile distinct from traditional venture or buyout strategies,” Zeigler tells us.

The goal? Shoring up confidence. “Having visibility into a potential source of institutional capital over time gives these companies greater confidence as they consider committing to the Saudi market,” Zeigler added.

What’s next?

Zeigler expects the first platforms to form by the end of the first quarter, with investment activity following as entities reach formation and readiness milestones. The exact timing will depend on regulatory approvals and final structuring.

If the model performs well, more vehicles could follow over time, he says. For now, the priority for Masna is to demonstrate that private-sector capital can be deployed efficiently into localized defense manufacturing at scale. “The [thesis] we’re addressing is structural, not short-term. […] The goal is to help build a durable private-sector investment base around defense and advanced manufacturing in Saudi Arabia. Fund I is the foundation for that.”

The context

It’s one of the first signs of activating the defense cooperation agreements signed during Crown Prince Mohammed Bin Salman’s visit to Washington in November last year, including a strategic defense agreement that facilitates US defense firms setting up shop in the Kingdom. Saudi was elevated to a non-Nato ally, which means we get financing and priority access for military equipment from the US.

“It’s hard to overstate how much the US-Saudi security relationship has shifted,” Zeigler said. This year’s World Defense Show — kicking off today — is set to reflect that shift as “the focus is moving decisively toward building real capability on the ground through the private sector,” he added.

DATA POINT- Saudi wants to localize 50% of defense manufacturing by 2030, and we’re already halfway there as of 2024-end.

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