Latest / IMI Podcasts / Iran War Fallout—The Gulf’s Plans to Attract Capital

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Iran War Fallout—The Gulf’s Plans to Attract Capital · IMI Podcasts

• 0:00
  SPEAKER_00: Golf venture funding fell 22% in the first half of 2026, and those deals were signed before Iranian missiles were launched at Gulf capitals.
• 0:11
  SPEAKER_00: You would expect an exodus.
• 0:13
  SPEAKER_00: Instead, the region's investors, founders, and business owners are repositioning in a way almost nobody predicted, and the data proves it.
• 0:21
  SPEAKER_00: We'll show you the numbers, the state machinery behind them, and the Caribbean island that could benefit from all of it.
• 0:29
  SPEAKER_00: Let's start with the numbers, because the two firms tracking the region can't agree on them.
• 0:35
  SPEAKER_00: Magnets, the Dubai-based tracker Bloomberg relies on, counts$1.35 billion raised across the Middle East and North Africa in the first half, and that's down 22% year on year, with the deal count collapsing 41% to just 214, the weakest half since 2022.
• 0:54
  SPEAKER_00: Wamda working with Digital Digest is gentler.
• 0:58
  SPEAKER_00: $1.7 billion across 242 rounds, an 18% fall year over year.
• 1:04
  SPEAKER_00: The gap comes down to methodology.
• 1:06
  SPEAKER_00: Whamda counts debt financing and defines a round loosely, while Magnet sticks closer to pure equity.
• 1:14
  SPEAKER_00: They disagree on the size of the drop, but not on its direction nor on what's left in the region.
• 1:21
  SPEAKER_00: The United Arab Emirates now draws two-thirds or more of all regional capital, and the money is clustered into a handful of very large rounds, while the middle of the market thins out.
• 1:32
  SPEAKER_00: Now, if you think a 22% drop means the war scared capital allocators off, the timeline may say otherwise.
• 1:41
  SPEAKER_00: A venture round typically takes six to nine months to move from handshake to close.
• 1:46
  SPEAKER_00: That means the first half money mostly records decisions made in 2025, before a regional war entered anyone's calculations.
• 1:56
  SPEAKER_00: As Magnus Philip Bahoshi put it, the numbers haven't caught up with the mood on the ground.
• 2:01
  SPEAKER_00: The signals that track current investor appetite look worse.
• 2:05
  SPEAKER_00: Early stage deal making has already fallen by more than half on the year.
• 2:09
  SPEAKER_00: Two rounds worth a combined$480 million propped up the first half figure, and the ten largest deals took 58% of all the capital.
• 2:19
  SPEAKER_00: Stripped those out, and the underlying picture weakens considerably.
• 2:24
  SPEAKER_00: Exits are tightening too.
• 2:25
  SPEAKER_00: Mergers and acquisitions fell 56% to just 16 total transactions, and foreign investors, who had recently been outspending local ones, roughly halved their share.
• 2:36
  SPEAKER_00: So the capital influx is slowing.
• 2:39
  SPEAKER_00: That's clear.
• 2:40
  SPEAKER_00: But money was never the fragile part.
• 2:42
  SPEAKER_00: We asked Jeremy Savory, founder of Dubai-based advisory firm Savory and Partners, what a war really breaks in a business hub.
• 2:51
  SPEAKER_00: And that's the tension at the heart of this story.
• 2:54
  SPEAKER_00: If trust is the casualty, why did almost nobody leave?
• 2:59
  SPEAKER_00: Part of the answer is that Gulf government spent years engineering the cost of leaving on purpose.
• 3:04
  SPEAKER_00: Take Hub 71, the Mubadala-backed program in Abu Dhabi.
• 3:09
  SPEAKER_00: It pays each admitted startup 250,000 dirhams in cash for equity and another 250,000 derhums in services, about 136,000 US dollars combined.
• 3:21
  SPEAKER_00: On top of subsidized housing and office space, its February intake drew nearly 2,500 applications for 27 places.
• 3:31
  SPEAKER_00: And for the first time, none of the companies selected were Emirati.
• 3:36
  SPEAKER_00: 100% were foreign.
• 3:38
  SPEAKER_00: When the strikes began days after that cohort arrived, none of them withdrew.
• 3:43
  SPEAKER_00: Doha has spent more on capital attraction.
• 3:46
  SPEAKER_00: Weeks before the first missiles, the Qatar Investment Authority tripled its fund of funds program to$3 billion, bringing 12 global fund managers to the city.
• 3:56
  SPEAKER_00: Among them, B Capital, co-founded by Facebook's Eduardo Severin.
• 4:01
  SPEAKER_00: A separate program, Startup Qatar, has fielded more than 7,700 applications and paid out$51 million to 45 companies, 11 of them since the fighting began.
• 4:14
  SPEAKER_00: Dubai and Riyadh have their own versions as well.
• 4:17
  SPEAKER_00: Dubai founders HQ graduated its first cohort in April, while Saudi Arabia channels entrepreneurs through incubators like the Garage toward state capital from Saudi Venture Capital and the Jada Fund of Funds.
• 4:32
  SPEAKER_00: And this goes well beyond the startup scene.
• 4:35
  SPEAKER_00: The same infrastructure, the subsidies, the syndicate's capital, the housing sends a signal to every business owner weighing the region.
• 4:44
  SPEAKER_00: The state wants you in the building and it's paying for the privilege.
• 4:48
  SPEAKER_00: But the capital typically comes with a major condition.
• 4:51
  SPEAKER_00: Nearly every one of these programs requires the founder or a principal to be physically resident.
• 4:57
  SPEAKER_00: Startup Qatar wants at least one founder on the ground.
• 5:00
  SPEAKER_00: Hub 71 expects the same.
• 5:03
  SPEAKER_00: When Golden Gate Ventures raised a$100 million regional fund from Qatari families, it moved a partner from Singapore to Doha to manage it.
• 5:12
  SPEAKER_00: In the Gulf, money rarely follows a business owner who stays abroad.
• 5:16
  SPEAKER_00: Residency policy has caught up with that demand.
• 5:19
  SPEAKER_00: Qatar moved to add a 10-year entrepreneur residency on top of its existing five-year permit.
• 5:25
  SPEAKER_00: And the UAE Golden Visa and Saudi Arabia's premium residency do the same job elsewhere, turning a relocation requirement into something an executive can build long-term relocation and plans around.
• 5:40
  SPEAKER_00: Savory, who arranges these moves professionally, says the funds are pricing something very specific, which raises an uncomfortable question.
• 5:49
  SPEAKER_00: If many investors are doubling down on the Gulf, why are residency and citizenship advisors having a record year?
• 5:57
  SPEAKER_00: Because the same people refusing to leave are building escape routes on paper.
• 6:02
  SPEAKER_00: Eleanor Ruda, co-founder and managing partner of Immigrant Invest, has watched the shift inside her own pipeline.
• 6:09
  SPEAKER_00: Since March, the share of UAE-based clients has roughly doubled, from about 7% earlier in the year to around 15%.
• 6:17
  SPEAKER_00: And among entrepreneurs alone, inquiries roughly tripled by April.
• 6:22
  SPEAKER_00: Interest from Qatar has more than quadrupled over the same stretch, with regional security coming up in over a third of those conversations.
• 6:31
  SPEAKER_00: About one in five CIDE clients now raised the same concern.
• 6:36
  SPEAKER_00: Where is that demand going?
• 6:38
  SPEAKER_00: To the destinations mobile wealth has always favoured.
• 6:42
  SPEAKER_00: She says golden visas in Portugal, Italy, and Greece, Spain's digital nomad visa and Caribbean citizenship, with Granada being the clear favorite.
• 6:52
  SPEAKER_00: But Ruda is emphatic that none of this is flight.
• 6:56
  SPEAKER_00: So exodus or influx?
• 6:58
  SPEAKER_00: The answer is both at once.
• 7:00
  SPEAKER_00: An influx of companies and capital into the Gulf and an exodus of risk onto paper.
• 7:06
  SPEAKER_00: One caveat before you draw conclusions.
• 7:09
  SPEAKER_00: The Gulf is a minor hub by global standards, with a relatively shallow talent pool and few public listings.
• 7:17
  SPEAKER_00: The optimists point out that only four cities produced a unicorn back in 2013 against more than 300 today, a growing share of them, Saudi and Emirati.
• 7:28
  SPEAKER_00: The skeptics counter that the first half resilients may simply be committed money working its way out of the system, dressed up as fresh demand.
• 7:36
  SPEAKER_00: The deals signed during the war months will surface in the third quarter figures, and those are due soon.
• 7:42
  SPEAKER_00: So it's clear that the Gulf's grip on mobile talent is being tested, but also from a direction we haven't mentioned in this video.
• 7:49
  SPEAKER_00: Turkey just introduced a 20-year exemption on foreign income, a policy aimed squarely at the same executives and founders Dubai has spent a decade courting.
• 7:59
  SPEAKER_00: We covered what that could mean for the flow of talent and capital out of the Gulf in the video on your screen now.
• 8:06
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