Venture capital firms in the Middle East and North Africa (MENA) continue to face challenges in identifying startups with sufficient market traction, differentiation, and commercial viability amid a crowded investment landscape, according to Hussein Attar, CEO of Tech Invest Com. Despite receiving thousands of pitches annually, investors frequently encounter proposals from founders who have yet to validate customer demand or fully understand their competitive environment.
Attar highlighted that many entrepreneurs approach investors without adequate preparation, often lacking evidence such as customer contracts, pilot projects, or minimum viable product testing that would demonstrate a genuine market need. "You have to prove to the market that what you’re building is actually much needed," he said.
The primary difficulty for investors is not attracting deal flow but discerning which ventures meet stringent investment criteria. Data from MAGNiTT shows that only 214 venture transactions were completed in the first half of 2026 across the MENA region, marking a 41 percent decline compared with the previous year and reaching the lowest half-year activity since at least 2022. Moreover, funding is becoming increasingly concentrated, with the ten largest deals accounting for 58 percent of the $1.35 billion invested during the period.
Attar pointed out that many promising founders are embedded within exclusive professional networks, making access to truly differentiated startups heavily reliant on relationships and introductions. This dynamic encourages investors to engage more actively with the entrepreneurial ecosystem by participating in industry events, workshops, and collaborative funding efforts. For later-stage investors like Tech Invest Com, partnerships with seed investors are crucial, as these early backers can provide insight into a company’s progress and unique attributes.
From a startup perspective, Attar stressed the importance of understanding the competitive landscape. While having similar products on the market is not inherently negative, founders must clearly articulate how their team, technology, or business model creates a sustainable advantage. He cautioned against the mindset of relying solely on funding as a means of survival, urging entrepreneurs to validate their concepts through tangible customer interest.
Artificial intelligence (AI) startups are subject to the same scrutiny, with investors requiring visible evidence of commercialization rather than technology for technology’s sake. Attar emphasized that AI should be demonstrated as a tool that enhances efficiency or addresses specific industry challenges. Given buyers’ hesitancy to adopt complex innovations, startups must package AI solutions in accessible, easy-to-integrate formats to lower barriers to adoption.
Tech Invest Com, which has been investing in regional technology companies since 2005 and entered venture capital in 2019, primarily targets MENA-based series A and B rounds, with typical investments ranging between $1 million and $3 million. The firm takes an active interest in business-to-business Software-as-a-Service (SaaS) startups, leveraging its shareholders’ industrial connections to facilitate commercial partnerships. While fintech remains a key focus, the firm also monitors insurance tech and proptech segments, emphasizing the need for clear differentiation.
Attar cited portfolio company Merit Incentives as an example of successfully navigating a crowded loyalty sector by building an extensive merchant network spanning 3,000 brands in 150 countries. The company’s ability to convert relationships into customers, particularly in Saudi Arabia, helped justify Tech Invest Com’s investment despite initial reservations.
Rather than prioritizing rapid growth or quick exits, Attar advocates for startups to emphasize profitability, brand strength, and market position. Both investors and founders should concentrate on commercial evidence, defendable technology, and ongoing value creation to build sustainable businesses.