The Race for Regional VC Leadership in the Middle East

The Race for Regional VC Leadership in the Middle East 

There’s no dominant venture capital leader in the Middle East… yet.

That single fact represents both an enormous opportunity and an urgent call to action. Because someone is going to claim that title in the next five to ten years, and the city or country that moves fastest will reap benefits for generations.

“There’s not a dominant regional leader yet, although Dubai is in the pole position to be that leader,” says Adeo Ressi, CEO of Decile Group, which has helped launch nearly 1,000 venture funds globally in the last four years. Ressi is traveling to the UAE in February to speak at the Forbes Middle East Summit and meet with government officials about venture ecosystem development.

The question isn’t whether a regional leader will emerge. It’s who will claim the position, and how quickly.

The Israel Precedent

For a model of what’s possible, look no further than the region itself.

Israel, a country the size of New Jersey in a hostile environment, built a venture capital ecosystem so effective that in the 1990s, more Israeli companies went public on NASDAQ than companies from any city outside Silicon Valley. More than Boston. More than New York. More than entire countries.

“Why is Israel the regional leader?” Ressi asks. “They have a killer venture capital ecosystem and are pretty much neck and neck with the United States. Think about what a powerhouse this tiny little country in a hostile area has become. What does it have that neighbors don’t?”

The answer isn’t talent. Everyone has talented people. It isn’t entrepreneurs. Neighboring countries have excellent entrepreneurs. What Israel has is a thriving venture capital ecosystem, built through deliberate government policy over decades.

The Middle East’s other nations have the same raw ingredients. What they lack is the infrastructure to turn those ingredients into billion-dollar outcomes.

The Capital Ceiling

Ressi calls it the “capital ceiling”: the invisible barrier that kills promising companies in regions without developed venture capital.

“Entrepreneurs build these incredible companies that start to take off, and then they hit a concrete ceiling,” he says. “These rocketships smash into these walls of concrete only because there’s no capital to keep up with their growth. In an ecosystem like Silicon Valley, they’d be unicorns.”

The biggest gap in most countries isn’t founders, ideas, or local market opportunities. It’s capital to scale.

“Too much of the UAE’s money leaves for funds in Silicon Valley, instead of staying in the local venture capital ecosystem,” Ressi says. “Cities and countries that don’t fix that are going to fall further behind those that do.”

The Compounding Clock

The urgency is real because venture ecosystems compound over time. Regions with capital attract more talent, which creates more companies, which attracts more capital, which creates more successful exits, which creates more experienced investors.

Regions without that flywheel fall further behind each year.

“This is something that compounds value over time,” Ressi says. “You have to start now. Otherwise, in five years from now, when you start, you’re going to be five years behind. And it’s not like you start and tomorrow you get results. These things take five to ten years to reap results.”

The window for establishing regional dominance is narrowing. As artificial intelligence and robotics reshape the global economy, regions without their own innovation capacity will become dependent on foreign nations for critical technologies.

The Path to Leadership

For Dubai or any city seeking regional leadership, the playbook exists. Singapore used aggressive matching programs to become Asia’s venture capital hub almost overnight. Chile transformed Latin America’s startup landscape with similar incentives.

The key insight from both: governments shouldn’t try to be venture capitalists themselves. They should make it irresistible for the best venture capitalists to relocate.

“The government should not be the investor,” Ressi emphasizes. “Governments can put policies in place that incentivize things, or they can do matching where they invest alongside other investors. But they definitely should not be picking the companies.”

For the Middle East, the formula is clear:

1. Aggressive financial incentives to attract top-tier fund managers
2. Streamlined regulations that make fund formation fast and affordable
3. Light-touch requirements that don’t scare away sophisticated capital
4. A long-term commitment measured in years, not quarters

“There’s not a dominant regional leader yet,” Ressi repeats. “Dubai is in pole position.”

The race is on. And the city that moves fastest will shape the region’s economic future for decades to come.

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