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Navigating the AI Revolution: Strategic Investments in MENA

by THEFUTURE.TEAM

June 24, 2025

Emergence of AI as a Boardroom Priority

In recent years, artificial intelligence has transcended buzzword status to become a strategic focus for investors and startups across the Middle East and North Africa. With AI venture funding reaching $224 million in 2024—a 66% year-over-year increase that now accounts for 12% of all VC dollars—the region is witnessing a dramatic shift in how technology is leveraged for growth.

Early-Stage Trends And Investment Challenges

Muhammad Zeeshan Hassan, Chief Investment Officer at Wa’ed Ventures, notes that before ChatGPT captured public attention, the regional landscape was fragmented. Today, nearly one in three startups in the investment pipeline identifies as an AI company. Although this surge in interest bodes well for fundraising potential, it also poses a challenge for investors striving to discern genuinely innovative ventures from those riding the hype wave.

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Despite this promising momentum, the MENA region still faces a scarcity of later-stage AI companies. The majority of deals—93% between 2022 and 2024—occur at the seed stage due to limited funding capacity. As investors have expressed, while there is a clear appetite for established AI models, capital constraints force a focus on early-stage opportunities, particularly in sectors like fintech where differentiation is key in a saturated market.

Bridging The Technical Knowledge Gap

A notable challenge in the region is the technical illiteracy among many venture capitalists. Unlike investors in Silicon Valley, who often have deep technical expertise or entrepreneurial experience, many MENA funds maintain a generalist approach. This mismatch in evaluating AI innovations can lead to missed opportunities and suboptimal capital deployment. To counter this, Wa’ed Ventures, backed by Aramco, has assembled a panel of global AI experts, ensuring that investments are guided by a robust technical understanding.

Localizing Innovation For Long-Term Impact

The strategic launch of a $100 million AI fund by Wa’ed in 2023 underscores the importance of localizing core technological capabilities within Saudi Arabia. Investments in companies such as chipmaker Rebellions, the compute platform aiXplain, and regional innovators like Elevatus and Intella demonstrate a commitment to building sustainable infrastructure far beyond mere application. As Hassan articulates, the focus is on foundational enablers—compute power, chip technology, and agentic platforms—that will drive enduring value in the region.

A Cautious But Visionary Outlook

While the current landscape is marked by robust enthusiasm, industry leaders remain pragmatic. Founders are urged to align valuation expectations realistically, especially in an environment distinct from Silicon Valley’s high-octane ecosystem. Encouragingly, regional policymakers have shown positive engagement, and initiatives like Saudi Arabia’s Vision 2030, along with partnerships involving global chipmakers such as NVIDIA and AMD, signal a forward-looking commitment to overcoming talent and infrastructure challenges.

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Shein Targets $25 Billion Valuation In Hong Kong IPO As Growth Slows

by News Editor

August 17, 2026

Shein is reportedly targeting a valuation of around $25 billion in its planned Hong Kong IPO, a sharp decline from the nearly $100 billion valuation the online fashion retailer achieved in a 2022 fundraising round.

Two people familiar with the plans said the company was likely to target about $25 billion, while another source put the expected range at $25 billion to $28 billion based on the proposed price band.

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IPO Valuation Falls Sharply

Shein plans to sell up to 8% of its shares in the offering, according to a person familiar with the plans. At a $25 billion valuation, that would translate into an IPO of as much as $2 billion.

The latest target is also below the $30 billion to $40 billion valuation the company was seeking earlier this month as it began meeting with potential investors.

Founded in China in 2012 and now headquartered in Singapore, Shein sells low-cost clothing to consumers in about 160 countries. The company is expected to launch its long-awaited Hong Kong IPO later this week.

Trade Restrictions Weigh On Growth

Shein’s valuation has come under pressure as major markets tighten rules affecting low-cost e-commerce shipments. The European Union, for example, has moved to impose additional fees on cheap parcels from platforms such as Shein and Temu. EU Tightens Rules On Low-Cost E-Commerce Parcels

In the U.S., the removal of an import duty exemption for small packages has also affected the company. Shein reported a $99 million quarterly loss in the first quarter of 2026 as sales growth slowed, while a one-time accounting charge further weighed on its results. Shein Reports First-Quarter Loss Ahead Of IPO

Investors Question Shein’s Growth Prospects

The steep reduction in valuation reflects growing concerns over slower growth, higher trade costs, regulatory pressure and stronger competition across global e-commerce.

Some investors who reviewed Shein’s recent financial statements or attended IPO presentations told Reuters they were skeptical that the company could return to the growth rates that supported its $98.2 billion valuation in 2022. Shein’s Slowing Growth Tests Investor Appetite

A lower IPO valuation could also affect Shein’s existing investors. Under the terms of its IPO filing, the company may have to issue additional shares to certain pre-IPO investors if its valuation falls below agreed thresholds.