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Dubai-based BY Venture Partners closed its third fund at USD 60 mn to back early-stage AI startups, bringing its assets under management to above USD 200 mn, according to a press release. The Dubai Future District Fund anchored the fund, with MultiLane, Transmed Capital, the Idriss Family Office, and other institutional and private investors also taking part.
The fund will mostly invest up to USD 1 mn per startup, from pre-seed to Series A, in AI-native companies building tools for enterprise workflows. It has already made 15 of a planned 40 investments, including PQ Shield, Cosyne, and Isometric, as well as Huspy and Invisible, which BY also backed through its earlier funds.
BACKGROUND- Most of BY Venture Partners’ capital goes abroad. BY invests across more than 16 markets and has deployed about two-thirds of its capital outside MENA, mainly in North America and Europe. It has now landed a mandate to run the Lebanese Angel Investor Network, which links Lebanese founders with diaspora investors, and has committed to reinvest half of its carried interest in Lebanon’s startup ecosystem, according to the statement.
IN CONTEXT- Regional investors have accounted for a larger share of regional investments this year as foreign capital takes more of a backseat amid regional tensions. MENA-based investors supplied 58% of capital deployed in 9M 2026, up from 50% a year earlier and marking a three-year high for the share. Meanwhile, foreign investors’ share declined to 42%, with US-based investor deployment falling to 9% from 15%.
The fund also targets a tier that has historically been underfunded: Series A. MENA’s early-stage transaction count fell 45% y-o-y in the first nine months of 2026, even as mega-rounds hit a record USD 813 mn in 3Q. In the UAE, the number of Series A rounds also halved in 1H, as foreign investors write smaller checks and startups struggle to find lead investors to lead their fundraising.
The caveat: AI companies took around 60% of what was raised by Series A startups in 1H. The fund adds capital where it’s scarcest, but in the sector that needs it least.
