Afaq Capital, a Saudi investment firm licensed by the Capital Market Authority (CMA), has set a new benchmark in the region’s venture capital landscape. The company has successfully acquired an entire venture capital portfolio in a transaction structured and completed with Cotyledon for Management Consultancy.
This deal isn’t just a routine acquisition, it’s a first-of-its-kind transaction in the region involving both a full entry and a full exit of a VC portfolio. It marks a transformative moment for the GCC startup and investment ecosystem, laying the groundwork for what future liquidity events might look like.
A Milestone in MENA Venture Capital
Hassan Ikram, Founder and CEO of Cotyledon, emphasized the importance of this moment:
“This is the first such exit in the region and a clear demonstration that liquidity events in this sector are becoming realistic and achievable.”
His statement reflects the growing maturity of the regional VC market. Until now, exits, especially full ones, have been elusive, often limiting investor confidence and capital flow. This deal flips the script.
Why This Deal Matters
This milestone transaction sends a strong signal to both local and global investors. It shows that the regional ecosystem is not only growing but also delivering returns and offering viable exit paths.
- For international investors: This is proof that credible and structured exits are possible in the region.
- For local investors: It confirms that VC-backed startups can generate real, tangible returns.
- For entrepreneurs: It builds confidence that long-term commitment from VCs can pay off.
This deal demonstrates the growing liquidity potential in the Middle East and sets a clear precedent for future venture-backed investment cycles.
What It Means for the Ecosystem
The impact of this transaction goes beyond just two firms. It has the potential to unlock a ripple effect across the Saudi and broader regional markets by:
- Accelerating capital recycling – Allowing VCs to reinvest in new ventures faster
- Encouraging the launch of new funds – As confidence in returns increases
- Strengthening founder-investor alignment – Making outcomes more predictable and structured
- Fueling Saudi Arabia’s Vision 2030 goals – Supporting innovation, entrepreneurship, and private capital formation
Looking Ahead
Saudi Arabia has been positioning itself as a hub for innovation and private capital, and this deal is a big step forward. It shows that the country is not only cultivating startups, but also building the mechanisms for them to succeed financially.
Afaq Capital’s move reflects a broader evolution in the region’s financial markets. It also signals the arrival of a more mature and sophisticated investment ecosystem, one where exits are not just a hope, but a growing reality.