BY Venture Partners Closes $60M Fund III to Back AI-Native Startups

BY Venture Partners has closed its third fund at $60 million to back early-stage AI-native startups, pushing the UAE firm's reported assets under management, including co-investment vehicles, past $200 million.

The fund's anchor investor is Dubai Future District Fund. MultiLane, Transmed Capital, the Idriss Family Office and a mix of other institutional and private investors are also in the round. That's a heavyweight anchor by regional standards, and it signals where Dubai's sovereign-adjacent capital wants exposure right now: applied AI.

How the money gets deployed

Fund III will primarily write checks of up to $1 million per company, targeting the pre-seed to Series A stages. The thesis is narrow by design — startups using AI to reshape enterprise workflows. At $1 million per company, a $60 million fund carries meaningful reserve capacity beyond the 40 planned initial positions, which matters for founders thinking about follow-on support through later rounds.

Deployment isn't a future promise. It's already under way. The firm has made 15 investments toward a planned portfolio of 40 companies. Current holdings include PQ Shield, Cosyne, Isometric, Huspy and Invisible.

"The focus of this fund is to back AI-native companies with global ambitions," said Ghaith Yafi, Founding Partner at BY Venture Partners. He added that the firm wants to bring international AI companies into the Middle East while connecting them with the region's technology ecosystem.

What does this change for founders?

The practical question for regional and international founders alike: what does a cross-border Gulf fund with fresh capital actually offer? Two things, on the firm's own account. First, a $1 million early-stage check with anchor backing that suggests dry powder for follow-ons. Second, a bridge — BY Venture Partners positions itself as a conduit, pulling international AI companies into Dubai and helping MENA-based founders reach global markets.

The firm has been running this playbook for nearly a decade. Founded in 2015 by Ghaith Yafi, Abdallah Yafi, Rami Jisr and Sohrab Jahanbani, BY Venture Partners invests across more than 16 international markets. Around two-thirds of its capital goes outside MENA, primarily into North America and Europe. So this isn't a Gulf-only vehicle dressed up with global language — the allocation record says the majority of dollars already flow to Western markets.

Why Dubai Future District Fund backed it

Dubai Future District Fund Managing Director Nader Albastaki said the firm's cross-border model was central to the investment decision. He pointed to BY Venture Partners' dual role: bringing international companies into Dubai while helping regional founders access global markets.

For the anchor, the logic is straightforward. A fund that imports validated AI companies into the emirate while exporting local talent to global markets serves both sides of Dubai's tech-ambition equation.

The takeaway for practitioners: there's now a well-capitalized, institutionally anchored buyer in the pre-seed to Series A AI space with a proven cross-border mechanism. With 25 portfolio slots still open out of the planned 40, founders building AI-native enterprise tools have a concrete new route into both Gulf capital and the region's ecosystem.