BY Venture Partners Closes $60 Million AI Fund as New Venture Capital Reaches Gulf Founders

DUBAI — Dubai’s early-stage AI founders have a new source of capital. BY Venture Partners, a venture capital firm headquartered in Dubai, has closed its third fund at US$60 million to back AI-native startups. The fund brings the firm’s total assets under management to more than US$200 million, according to Entrepreneur Middle East.

The close came in a busy week for venture funds in the region. Two other funds announced closes or launches within days, each with an AI or technology focus and a link to the Gulf.

What Fund III Will Back

The fund is anchored by the Dubai Future District Fund (DFDF). Other backers include AI and high-speed data infrastructure company MultiLane, Transmed Capital and Saudi Arabia’s Idriss Family Office. Fund III will:

• Invest up to US$1 million per company, mostly from pre-seed to Series A.
• Back AI-native companies that reimagine enterprise workflows and are built to sell internationally from day one.
• Build a portfolio of 40 companies. It has made 15 investments so far, including PQShield, Cosyne, Isometric, Huspy and Invisible.

The firm invests in more than 16 markets, with about two-thirds of its capital deployed outside MENA, in North America and Europe. Tech.eu reports it has also opened a Lisbon office with two local investment hires.

“The focus of this fund is to back AI-native companies with global ambitions,” said Ghaith Yafi, Founding Partner, in comments reported by Entrepreneur Middle East. “We are particularly excited about the opportunity to attract some of the world’s most innovative AI companies into the Middle East and connect them with the region’s rapidly growing technology ecosystem.”

All four partners, Ghaith Yafi, Abdallah Yafi, Rami Jisr and Sohrab Jahanbani, built and exited companies before becoming investors. The firm says its first two funds produced four unicorns and backed companies including NymCard, Toters, Huspy, Onfido and Invisible Technologies.

Why Dubai’s Anchor Money Matters

Nader Albastaki, Managing Director of DFDF, explained why Dubai’s fund took the anchor position. “We committed to Fund III because BY’s model works in both directions,” he said. “It brings global AI-native companies into Dubai and takes founders from this region into international markets, and that exchange is what Dubai’s Economic Agenda D33 asks of us.”

In other words, Dubai’s public capital is backing a fund on the condition that it brings companies and founders to the city as well as returns.

Separately, Entrepreneur Middle East reports that BY Venture Partners has a mandate backed by Lebanon’s Ministry of Technology and AI to run the Lebanese Angel Investor Network. The firm will reinvest 50% of its carried interest into rebuilding Lebanon’s startup ecosystem.

The Other Funds This Week

• Phaze Ventures (Oman) launched two funds targeting more than US$75 million in total and has secured over US$40 million in commitments so far, according to Wamda. Fund II, anchored by ITHCA Group, Ominvest and Oman LNG Development Foundation, invests in AI and deeptech globally. A second fund, anchored by Future Fund Oman, focuses on Omani AI companies. Phaze has team members in Muscat, Dubai and Riyadh, and its first 10 investments include Arabic.AI and Sully.ai.
• DPI Venture Capital reached a final close of its Nclude Fund at over US$112 million, Wamda reports. Egypt is its core market, and 30% of the mandate can go elsewhere in Africa and the Middle East. It writes cheques of US$500,000 to US$10 million from seed to Series C, focused on fintech, financial inclusion and AI. Its portfolio includes UAE-based fintech FlapKap.

How Founders Should Read It

This is our editorial reading.

• The cheque size fits early-stage AI. Up to US$1 million at pre-seed to Series A suits a Dubai team with an enterprise AI product and a few paying customers.
• Build for global markets. BY puts most of its capital outside MENA. A Dubai startup that only sells locally is a weaker fit than one targeting customers in Europe or North America from the start.
• Enterprise workflows are the focus. The thesis is AI that changes how businesses operate, not consumer apps.
• Gulf funds are investing across borders. Phaze has team members in Dubai, and DPI’s fund backs companies expanding between Egypt and the Gulf. Founders building regional companies have more places to pitch than a year ago.
• Diligence goes both ways. Look at each firm’s portfolio and talk to its founders before you take the money. A fund’s stage, cheque size and follow-on capacity matter as much as its headline size.

Details come from Entrepreneur Middle East, Tech.eu and Wamda as of October 29, 2026. Unicorn counts and portfolio claims are as stated by the firms.