BY Venture Partners has closed a $60 million Fund III to back early-stage AI startups, with 15 investments already made toward a planned 40-company portfolio.
The fund's backers include regional institutions, corporate venture arms, and family offices. Notable participants include AI and high-speed data infrastructure company MultiLane, Transmed Capital, and Saudi Arabia's Idriss Family Office.
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Global Strategy for AI Startups
The firm's strategy goes beyond funding startups in the Middle East. BY Venture Partners invests across more than 16 international markets, with approximately two-thirds of its capital deployed outside MENA, particularly in North America and Europe.
Fund III aims to back companies building AI-powered enterprise solutions. These businesses have the potential to scale internationally from the outset.
The fund focuses on companies using AI to rethink enterprise workflows rather than simply adding AI features to existing products. The opportunity spans businesses that automate professional tasks, improve organizational efficiency, and create new ways to deliver services.
The Growth of the AI Market
The timing aligns with the Gulf's growing AI market. McKinsey's November 2025 survey found that 84% of surveyed organisations across the GCC used AI in at least one business function, up from 62% in 2023.
However, adoption does not automatically translate into business value. Only 31% of respondents said their organisations had scaled AI across the business or fully deployed it.
That gap creates a potential opening for AI-native companies developing practical solutions for enterprise customers. BY's focus is on identifying those businesses early and backing founders who can build products for international markets.
Portfolio and Co-investment Network
Fund III's investments include PQ Shield, Cosyne, Isometric, Huspy, and Invisible. These companies span different applications and business models.
The portfolio reflects BY Venture Partners' international investment approach. The firm backs companies across markets and connects them with capital, industry relationships, and potential customers in the region.
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Its co-investment network also includes established technology investors such as Andreessen Horowitz (a16z), 8VC, Y Combinator, Standard Capital, and Baidu Ventures.
For startups, these relationships create opportunities to access additional investors and markets as they grow. The practical value will depend on each company's needs and how effectively the firm supports its expansion.
Dubai and Regional Expansion
DFDF's anchor commitment reinforces Dubai's ambition to attract international technology companies. It also helps regional founders expand globally.
Nader Albastaki, DFDF's managing director, said the fund's two-way model was central to the investment decision. This involves bringing international AI companies into Dubai while helping regional founders reach overseas markets.
The approach aligns with Dubai's Economic Agenda D33. This initiative aims to strengthen the emirate's global economic position.
For BY Venture Partners, the strategy creates a role beyond writing investment cheques. The firm uses its international network to connect portfolio companies with regional investors and businesses.
Hands-on Support for Founders
Attracting AI companies to Dubai is only one part of the equation. The other is helping regional founders build businesses that can compete internationally rather than relying solely on local demand.
Four partners—Ghaith Yafi, Abdallah Yafi, Rami Jisr, and Sohrab Jahanbani—founded BY Venture Partners. They built and exited businesses before moving into investment. That operator background informs the firm's emphasis on hands-on support for founders.
The firm also commits to Lebanon's startup ecosystem. It manages the Lebanese Angel Investor Network (LAIN), which connects diaspora capital with early-stage Lebanese founders.
BY has committed to reinvesting 50% of its carried interest into rebuilding the Lebanese startup ecosystem. According to the firm, its first two funds have backed four companies that reached unicorn status.
With 15 investments already made, the next milestone is how BY Venture Partners deploys the remaining capital. The industry is watching to see how the firm supports its portfolio through growth.
Engagement
