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BY Venture Partners has opened a European office in Lisbon and closed a USD $60 million third fund, taking its total assets under management to more than USD $200 million.
The Dubai-based early-stage investor said Fund III will focus on AI-native start-ups from pre-seed to Series A, typically investing up to USD $1 million in companies targeting enterprise workflows and aiming to scale internationally.
The fund is anchored by the Dubai Future District Fund, with backing from regional institutional investors, corporate venture arms and family offices, including Multi Lane, Transmed Capital and the Idriss Family Office in Saudi Arabia.
BY Venture Partners invests across more than 16 markets and has deployed about two-thirds of its capital outside the Middle East and North Africa, mainly in North America and Europe. It has already made 15 investments from Fund III and plans to build a portfolio of about 40 companies.
Those investments include PQ Shield, Cosyne, Isometric, Huspy and Invisible. Earlier funds also backed European companies including Onfido, SalesApe and PQ Shield.
European push
The Lisbon office marks a formal expansion of BY Venture Partners' European presence as it looks to increase activity in Spain, the UK, France and Germany. It has also added two local investment hires in the city.
The move builds on the firm's existing investments in European technology companies, including identity verification company Onfido, cryptography business PQ Shield and property technology company Huspy.
"We are thrilled to officially announce Fund III and the launch of our European office in Lisbon, Portugal," said Ghaith Yafi, Founding Partner at BY Venture Partners.
"This fund will back AI-native companies with global ambitions. We are particularly excited to invest more across Europe, where hubs such as Madrid, London, Paris and Berlin are driving rapid advances in AI-native software. Our thesis is designed to generate strong, long-term returns for our partners, and we're incredibly excited about the opportunities ahead with this new fund," Yafi said.
One partner said the expansion reflects the view that Europe remains rich in technical talent, but can be a harder market for founders seeking access to international investors and customers.
"Europe is producing some of the world's most formidable technical talent, but European founders often face a barrier when bridging the gap to international capital and global commercial scale," said Sohrab Jahanbani, Partner at BY Venture Partners.
"Having backed category leaders like Onfido, PQ Shield and Huspy from our earlier funds, doubling down on Europe with our new Lisbon hub is a natural evolution. Our goal is to give ambitious European founders direct access to global networks, cross-border deployment opportunities and an operator-led team that knows how to build across international markets," Jahanbani said.
AI focus
BY Venture Partners is positioning the latest fund around what it describes as AI-native businesses, which it sees as distinct from software companies adding artificial intelligence features to existing products. The focus is on start-ups building products and operations around AI from the outset.
The firm's geographic strategy remains centred on the Middle East while keeping a broad international remit. That reflects a wider pattern among Gulf-based investors seeking greater exposure to European and North American technology companies while using the region as a capital base.
BY Venture Partners was founded by repeat entrepreneurs Ghaith Yafi, Abdallah Yafi, Rami Jisr and Sohrab Jahanbani, all of whom had built and sold businesses before moving into venture investing. The firm said this operating background is central to how it works with founders.
It also said its first two funds have produced four unicorns, along with a number of businesses now valued in the hundreds of millions of dollars. The firm added that it has already returned capital to limited partners from those earlier vehicles.
Abdallah Yafi said Lisbon and the wider Iberian market had become a stronger base for AI and deep-tech founders.
"Lisbon and the broader Iberian ecosystem have transformed from emerging regional hubs into serious launching pads for world-class AI and deep-tech innovation," said Abdallah Yafi of BY Venture Partners.
"By combining a local presence with BYVP's global reach across the Middle East and North America, we are uniquely positioned to give Iberian and European founders the capital, operational support and global commercial exposure needed to compete and win on the international stage," Yafi said.