Through the lens of Aisha Rahman, Founding Partner, Meridian Ventures With insights from: Rizal Tan, Co-Founder & General Partner And: Ahmad Ismail, CFO, PayMalaysia (Portfolio Company)

By Year 5, we had deployed most of Fund II and were generating the track record that would define our institutional future. The question was no longer whether we could survive—it was whether we could scale.

Year 6: Fund I Harvest Mode and Fund III Preparation

Fund I Portfolio Status:

Company Total Investment Status Current Value Multiple

DataSync $400K Exited (failure) $32K 0.08x

PayMalaysia $650K Series B prep $6M 9.2x

CloudSEA $700K Acquisition talks $2.5M 3.6x

SecureKL $400K EXITED $550K 1.38x

LogiTech Asia $600K Growing $1.2M 2.0x

HealthTech MY $550K Growing $1.4M 2.5x

PropTech.asia $500K Profitable $900K 1.8x

AgriTech ASEAN $350K Exited (failure) $50K 0.14x

EduScale ID $500K Series A complete $1.8M 3.6x

FinFlow $650K Series A complete $3.2M 4.9x

Year 6 Fund I Metrics:

• Portfolio value: $17.5M (8 remaining companies)

• Total distributions: $632K

• TVPI: 2.8x

• DPI: 0.13x

• Net IRR: ~32%

CloudSEA Acquisition:

In June, Year 6, CloudSEA was acquired by a regional enterprise software company for $8M. Our proceeds: $2.2M on $700K invested (3.1x).

This was our second meaningful exit and dramatically improved our DPI story.

Fund I Post-CloudSEA:

• Total distributions: $2.85M

• DPI: 0.57x

• TVPI: 3.0x

Fund III: The Institutional Leap to $50 Million

Fund III represented our transition from emerging to established manager. At $50M, we could finally access the institutional capital that had been out of reach for our first two funds. But doing so, required next level fundraising strategy.

Fundraising Strategy Canvas: Meridian Ventures Fund III ($50M)

Fund Name: Meridian Ventures Fund III Completed by: Aisha Rahman & Rizal Tan Completed date: May 5th

Content Marketing (Your key message)

Our Fund III content strategy builds on five years of thought leadership. Aisha publishes monthly insights on South-East Asian venture trends via LinkedIn and our firm blog, reaching 15,000+ followers across the region. We co-author research with FoF’s on emerging manager performance in ASEAN markets. Rizal speaks regularly at AVCJ, SuperReturn Asia, and regional LP convenings. Our quarterly LP letters have become known for transparent, detailed portfolio analysis—several prospective LPs cited these as reasons for taking initial meetings. For Fund III, we’re producing a signature report on “The Next Wave: AI Opportunities Shaping the future” to position our revised thesis.

LP Construction (200 Names vs 3000 Names)

Fund III targets 20-25 LPs with an average commitment of $2-2.5M. Our construction starts with warm relationships: 12 re-up conversations with Fund I/II LPs (targeting 80% re-up rate), plus 8 qualified new institutional prospects. We’re not casting wide—we’re going deep on LPs where we have genuine fit.

Our primary list includes: IFC and ADB (DFI mandate alignment), 4 fund-of-funds with emerging manager programs (Sarona, Speedinvest, HarbourVest, Adams Street), 3 regional pension funds beginning SEA allocations, 2 American foundations with Asia impact mandates, and 3 corporate VCs seeking regional deal flow access. Secondary list adds 15 family offices across Singapore, Hong Kong, and the Gulf.

Sequencing (Game Plan)

Pre-marketing (Months 1-3): Soft conversations with Fund I/II LPs to gauge re-up appetite and gather reference feedback. Update all materials, refresh data room, finalize Fund III terms.

First Close Target (Months 4-8): Secure anchor commitments from Jelawang Capital ($6M target) and one DFI (IFC at $8M). These two anchors unlock the rest of the raise.

Second Close (Months 9-12): Convert fund-of-funds and re-ups. Target $35M cumulative.

Final Close (Months 13-16): Complete pension fund and foundation conversations. Close at $50M.

Extended Team (Who?)

We’re not raising alone. Our extended team includes: Jim, the ex-ADB (warm introductions to DFI network), our advisory board member from a major Malaysian family office (opens doors across Gulf family offices), Jelawang Capital’s LP relations team (co-hosting events where we’re featured), our Fund II co-anchor LP who now sits on two foundation boards (direct introductions), and a placement agent for European institutional LPs only (Eaton Partners, success-fee basis).

As always, Andrew Senduk and his army of AI agents supports by presenting our GTM value-add story to LPs evaluating our portfolio support capabilities. We also brought in people like Jen Braswell and Paola Ravacchioli to guide us into the world of institutional readiness.

The biggest difference, now we have a full capital formation team, full-time. That’s a game-changer.

Timeline (6 Weeks vs 4 Years)

Target: 14-16 months from launch to final close. We’re raising institutional, so we accept longer cycles. DFIs like IFC require 6-9 months from first meeting to IC approval. Pension funds need 4-6 months minimum. We’ve built relationships with target LPs over the past 2 years specifically to compress these timelines. Fund II closed in 14 months; we’re targeting similar pace for Fund III despite larger size because our LP relationships are now mature and our track record is proven.

Amplifying LPs (Value-Add LPs)

Three LPs serve as active amplifiers for Fund III:

Jelawang Capital: As anchor, they’re actively referring us to their LP network and co-hosting a webinar on SEA emerging managers where Meridian is featured.

Grace Choo  (IFC): Beyond their commitment, IFC’s involvement signals institutional validation. We’ll reference their due diligence process and commitment in all LP conversations.

Fund I HNWI (exited founder): Now a respected angel investor, he’s made personal introductions to three family offices in his network who are exploring VC allocations.

Geography (Focus)

Primary: Singapore, Kuala Lumpur, Hong Kong (in-person intensive). These three cities cover 70% of our target LP base.

Secondary: Dubai (6 trips planned for Gulf family offices and sovereign-adjacent capital), Washington DC (IFC HQ, 4 trips), San Francisco (2 American foundations, 5 trips).

Tertiary: European fund-of-funds handled primarily via placement agent with 3 Rizal trips to London/Amsterdam.

We’re not trying to cover the world. Geographic focus means deeper relationships in fewer places.

Incentives (Incentives to Close)

First Close Incentive: LPs committing by first close receive most-favored-nation status on any future side letter terms and priority co-investment allocation on the first three Fund III deals.

Anchor Incentive: Jelawang Capital’s $6M anchor commitment came with a seat on our Advisory Committee and quarterly strategic calls with GPs beyond standard LP updates.

No fee discounts. We learned from Fund I that fee discounts create LP management complexity and signal desperation. Our 2/20 terms are firm. Value-add comes through access and relationships, not economics.

Summary: Why Fund III Will Close

Fund III succeeds because we’ve built the infrastructure over four years:

1. Track Record: Fund I at 2.8x TVPI with 0.6x DPI; Fund II performing at 1.6x TVPI in Year 2

2. LP Relationships: 80%+ expected re-up rate from existing LPs

3. Institutional Readiness: IFC-grade reporting, ESG frameworks, governance already in place

4. Anchor Momentum: Jelawang and IFC commitments create herd effect for remaining LPs

5. Team Coverage: All 8 GP Fundraising Team roles systematically covered

6. Geographic Discipline: Focused presence in 3 primary cities, not scattered globally

We’re not hoping to raise $50M. We have a plan to raise $50M.

The Fund III LP roster showed our journey from emerging to institutional:

LP Type Commitment

IFC (International Finance Corporation) $8M

Jelawang Capital (top-up) $6M

Fund-of-Funds (top-ups x3) $10M

Employees Provident Fund (EPF / KWSP) $5M

Regional pension fund (1) $1M

American Foundations (2) $5M

Corporate VCs / Strategics (3) $8M

Fund I/II Re-ups $7M

TOTAL $50M

IFC: The Institutional Validation

When IFC committed $8M to Fund III, it represented the culmination of a eight-year relationship.

Grace’s guidance during Fund I and II had prepared us for IFC’s due diligence process—one of the most rigorous in the industry. When the IFC team reviewed our fund, they found:

•            ESG frameworks already in place

•            LP reporting that met institutional standards

•            A governance structure that could scale

•            A track record of transparent, disciplined decision-making

•            A clear investment thesis with demonstrated execution

“Meridian had done the hard work of institutionalization before they needed to,” an IFC investment officer noted during our closing celebration. “That’s rare for emerging managers. Most try to retrofit institutional practices after they want institutional capital. Meridian built the foundation first.”

Analyzing the LP outcome scenarios for EPF / KWSP

One particularly valuable preparation was the extended masterclass we did on the LP outcome scenarios. This actually happened in Lausanne, Switzerland, where we participated in IMD’s Venture Asset Management program. Here we met Jim and Heidi, from ZKB. We got to develop and then truly practice using the LP outcome canvas. Enrique pushed us hard on this. This was truly transformative.

We did not know it at the time, but just months later we would find ourselves in exactly the same position, when the investment team at EPF/KWSP started discussing their LP outcome analysis with us. Suddenly, we realized we could hold our ground and discuss, even negotiate with them on LP outcome models. Looking back, that was probably the moment it clicked, ‘now we are truly institutionally ready’.

Read the full LP outcome analysis from EPF/KWSP here.

The 20-Month Fundraising Cadence

Fund III closed in early Year 7, meaning we had raised three funds in seven years—a new fund approximately every 20 months.

This aggressive pace was only possible because of the fundraising infrastructure we’d built:

•            LP relationships maintained continuously (not just during fundraising windows)

•            Data room always updated and ready

•            Fundraising team roles clearly defined across our small team

•            AI and automation tools accelerating LP research and outreach

•            Process-driven approach to LP conversion

Year 7: The Firm Today

By the end of Year 7, Meridian Ventures managed $85M across three funds:

Fund Size Vintage Status

Fund I $10M Year 0 Harvesting

Fund II $25M Year 2 Value Creation

Fund III $50M Year 4 Deploying

Our team had grown from 2 founders to 8 people: 2 GPs, 1 Venture Partner (Andrew Senduk), 2 Principals, 2 Associates, and 1 Operations Manager, as well as a full team of AI agents.

We’d invested in 32 companies across South-East Asia. Four exits completed. One potential unicorn in the making (PayMalaysia, now valued at $60M+ and heading toward Series C).

We were no longer emerging managers. We were an established firm with institutional credibility, consistent returns, and a platform that would outlast any individual partner. Of course, with three funds, we now need to start generating exits and DPI back to our LPs. That’s the next step of the journey.

Key Recommendations for Emerging Fund Managers in South-East Asia

Having navigated the journey from concept to $85M under management, here are the recommendations we would give to emerging managers starting today in South-East Asia:

1. Start Smaller Than You Think

Our original target of $30M for Fund I would have been impossible to raise. $10M was achievable—barely. In emerging markets, fund size credibility must be earned gradually. A successfully deployed $10M fund opens doors that no amount of pitch materials can open for a $50M first fund.

2. Understand the Economics Brutally

A 2% management fee on a $10M fund is $200,000 per year. After fund administration, legal, office, and travel, you’ll be paying yourselves poverty wages. Plan for this. Either have personal runway, alternative income sources, or extremely understanding life partners. The economics only work at scale—which means Fund II and III are not optional; they’re survival requirements.

3. Invest in Fundraising Infrastructure Early

Use the GP Fundraising Team canvas to build systematic fundraising capability, even if you’re just two people. Define who covers each role. Use AI and automation tools aggressively. Define your LP personas. Nail your LP Value proposition. Maintain your LP CRM continuously. The difference between our Fund I scramble and Fund II execution was entirely about infrastructure.

4. Leverage Ecosystem Builders

Organizations like IFC, ADB, Cradle Fund, and Jelawang Capital exist to support ecosystem development. They want emerging managers to succeed. Engage with them early—not for capital, but for guidance, connections, and credibility. Our relationships with Grace Choo  at IFC and Craig and Ian at ADB were transformative years before they led to any investment.

5. Build Value Creation Capabilities

South-East Asian founders often need more support than capital. Andrew Senduk’s GTM expertise became a genuine differentiator for our fund. Think about what operational value you can genuinely provide, and build that capability deliberately. LPs increasingly want to see portfolio support, not just deal access.

6. Accept the LP Evolution Timeline

Fund I will likely be friends, family, HNWIs, and angels. Fund II will add some early institutional elements—fund-of-funds, emerging manager programs. Fund III is when major institutional capital becomes accessible. Don’t fight this progression; plan for it. Each fund stage prepares you for the next.

7. Maintain a Fundraising Cadence

Raising a new fund every 20-24 months sounds aggressive, but it’s actually survival strategy. It keeps LP relationships warm, demonstrates traction, and builds the AUM necessary for sustainable GP economics. Start thinking about Fund II long before Fund I even closes.

8. Be Transparent About Challenges

Our first write-off was painful to communicate to LPs. But our transparent handling of that failure—and our discipline in not throwing good money after bad—built credibility that paid dividends in Fund II and III. LPs expect some failures. What they’re watching for is how you handle them.

9. Invest in Education Continuously

The Fund Manager! Masterclass transformed our approach. Strategy Tools’ LP AI platform sharpened our pitching. Industry conferences, peer networks, and continuous learning aren’t luxuries—they’re requirements for staying competitive in a rapidly evolving industry.

10. Remember It’s a 15-Year Journey

The Fund Journey Map shows a 15-year cycle from idea to final distribution. We’re only at Year 7. The hardest part—converting paper gains to actual DPI—is still ahead. This is a career commitment, not a quick path to wealth. Make sure you’re in it for the right reasons and with the right partners.

Final Reflections

Rizal’s reflection:

“Six years ago, Aisha and I were two people in a converted shophouse, maxing out credit cards and wondering if anyone would ever trust us with institutional capital. Today, we manage $85M across three funds with IFC as an LP and genuine institutional credibility. Fund I’s emerging returns aren’t the highest in the industry, but they’re solid, repeatable, and built the foundation for everything that followed. The Fund Journey Map captures the phases, but what it can’t capture is the emotional journey—the anxiety of Year 0, the relief of first close, the devastation of our first write-off, the joy of our first major exit. This business is deeply human. That’s what makes it worth doing.”

Aisha’s reflection:

“If I could give one piece of advice to emerging managers starting today in South-East Asia, it would be this: the fund journey is a marathon, not a sprint. Every phase has its challenges and rewards. Year T-2 felt impossible; Year 4 felt like vindication; Year 6 feels like we’ve just begun. Through all of it, the constants were partnership stability, LP transparency, and founder-first investing. Those principles guided every decision. They’ll guide Fund IV and beyond.”

The fund journey continues.

Read Part I (years T-2 -1), I here, and Part II here.

About the Fund Journey Map and GP Fundraising Team Canvas

The Fund Journey Map by Strategy Tools visualizes the complete 15-year lifecycle of a venture capital fund, from early idea through final distribution. It captures the key decision points, risks, and milestones that define the GP experience. Based on work with 100’s of emerging fund managers, the Fund Journey Map is designed to help emerging managers successfully navigate the full fund journey.

The GP Fundraising Team canvas identifies the eight roles that drive successful LP fundraising, from LP Researcher through LP Process & DD Guide. Both tools are part of Strategy Tools’ Venture Capital Series.

Download the Fund Journey Map, GP Fundraising Team canvas, and explore our full suite of GP accelerators and venture capital programs  at strategytools.io

Ready to start your fund journey?

Join the Fund Manager! Masterclass to learn from experienced GPs, practice with our Fund Manager simulation, and build the skills needed to launch and manage successful venture capital funds. Learn more.

This article is part of the Venture Capital Series at Strategy Tools, helping fund managers, LPs, FoFs and ecosystem builders develop better venture capital ecosystems around the world.

About the Author:

Christian Rangen is a strategy advisor and business school faculty. He works with ambitious ecosystem developers, innovation agencies, venture funds, national fund-of-funds and governments on building better VC firms and VC ecosystems. He runs GP Accelerators and GP Masterclasses globally.

A huge thanks to Scott Newton Rick Rasmussen Efe (Braimah) Barber Winnie Odhiambo Jen Braswell Paola Ravacchioli Jim Pulcrano Enrique Alvarado Hablützel Marijn Wiersma Jessica Low Jessica Espinoza Marième Diop Sanjana Raheja Rumbi Makanga for inspiring this 3-part story

“Absolutely stunning”

“Possibly the most unique training I have taken part in. The highs and lows of being a start up founder squeezed into two days.

“Every founder should have this!”

Just wrapped up an incredible two-day workshop on Scaling and Exiting for Founders”

“If only I had attended something like this 20 years ago during my first venture… In just 16 hours, we covered what felt like a year’s worth of founder lessons thanks to Christian Rangen of Strategy Tools and the team”

“Two days. High-impact insights. High ROI on time invested”

“Helps founders focus on fundraising and its importance for success”

“Capital structure matter a lot more than we think about in our day-to-day”

These were just some of the feedback comments we received after a week in Dubai.

Our mission? Running five days of Scale Up MENA Masterclasses. 

In close collaborations with many of the largest ecosystem players, including Dubai Future District Fund , Dubai Technology Entrepreneur Campus – Dtec , DIFC , 1trepreneur and Ignyte , more than 150 people; founders, VCs, angels and ecosystem builders – all going throught the Founder’s journey.

What started as an idea, “Can we develop a fully regional MENA version of Scale Up!?” 12 months ago, is now a fully developed, fully proven advanced stage scale up program – and now completed seven programs with 250+ founders, investors and ecosystem builders. Next, we need to go from seven to 1.000 programs. Let’s go!

But here’s the uncomfortable question nobody asked: How are you actually going to turn that into cash?

Welcome to the MENA ecosystem’s most misunderstood trio: value creation, value realization, and exit. They’re not the same thing—and confusing them could cost you everything.

Value Creation: Building the Beast

Value creation is what you do every day as a founder. It’s growing revenue from $1M to $10M. It’s securing that killer partnership with a regional bank. It’s building proprietary IP that nobody else has. It’s expanding from Dubai to Riyadh to Cairo.

Every new customer, every product launch, every market you enter, every patent you file—that’s value creation. Your company’s equity value increases. Your IP portfolio expands. Your team strengthens. Your competitive moat widens.

MENA is crushing it here. Dubai saw 26% year-on-year growth in scale-ups. Founders are building extraordinary companies with innovative solutions for regional challenges. The value creation engine is firing on all cylinders.

But here's the problem: value creation alone doesn't pay anyone.

You can build a $500M company with incredible technology, dominant market share, and perfect unit economics. That’s phenomenal value creation. But if there’s no path to turn that value into cash? You’ve built a very expensive hobby.

Value Realization: The Forgotten Middle Step

This is where most MENA founders get lost.

Value realization isn’t the same as exit. It’s not a single event. It’s the mechanisms and paths you build to deliver liquidity back to investors and founders along the journey.

Think of value realization as your answer to: “How do we actually capture some of this value we’re creating?”

The Value Realization Toolkit includes:

Secondary Sales – Selling a portion of your shares to new investors or existing ones before exit. Smart MENA founders are negotiating secondary rights in Series B and C rounds, allowing them to take some chips off the table while the company continues scaling.

Partial Buyouts – Strategic investors or late-stage funds buying out a percentage of early investors’ positions. This creates liquidity for seed investors who’ve been in for 5+ years while you keep building.

Strategic Partnerships with Liquidity Components – When a regional bank or telecom takes a strategic stake and buys out some early angels in the process. You get the partnership and create early liquidity.

Dividend or Distribution Strategies – Rare in venture but increasingly discussed in MENA’s maturing ecosystem, especially for profitable scale-ups that don’t need to raise more capital.

Structured Secondaries with Growth Rounds – Setting up formal secondary processes alongside primary fundraising, where 20-30% of the round allows existing shareholders to sell.

The key insight? Value realization is something you plan and engineer—not something that magically happens at exit.

The MENA Reality: Great at Creating, Struggling at Realizing

Here’s what’s happening across the Middle East and North Africa right now:

Value Creation: World-Class Founders are building incredible companies. Valuations are climbing. Innovation is exploding. The region is creating value as fast as Silicon Valley and faster than Southeast Asia. Just check out Deal Room’s new data.

Value Realization: Immature Most founders don’t even know these mechanisms exist. Term sheets don’t include secondary provisions. Cap tables aren’t structured for partial liquidity. Investors sometimes actively resist value realization pre-exit.

Result? Founders and early employees with massive paper valuations and zero liquid wealth. Angel investors who’ve been in for 7+ years with no path to returns. Early VCs showing strong MOIC and TVPI on paper but weak DPI (actual cash back to LPs).

Exit: The Bottleneck Strategic acquirers are selective. IPO markets are developing but not mature. Cross-border M&A is complex. Every founder is waiting for “the exit” while the value they’ve created remains locked up.

This is the critical gap in the MENA ecosystem: Mastered value creation. Haven’t mastered value realization – yet.

Exit: One Path, Not the Only Path

An exit—acquisition, merger, or IPO—is the full transfer of ownership. It’s the grand finale. The moment when everyone who holds equity realizes value simultaneously.

When Careem sold to Uber for $3.1 billion, that was an exit. It delivered massive value realization in a single transaction. Former employees walked away with cash to start new ventures. Early investors returned capital to their LPs. The “Careem Mafia” was born.

But here’s what the smartest MENA founders understand: Exit is just one value realization mechanism—and it shouldn’t be the only one you plan for.

Why? Because exits are:

• Uncertain (deals fall through constantly)
• Slow (18-36 months from first conversation to close)
• Rare (only a tiny percentage of companies achieve meaningful exits)
• Binary (you either exit or you don’t—there’s no middle ground)

If exit is your only value realization strategy, you’re betting everything on a single unlikely event.

What Smart MENA Founders Do Differently

1. Build Value Realization into Your Cap Table from Day One

When you’re raising seed or Series A, negotiate secondary provisions. Build in the right for founders and early employees to take 10-20% liquidity in future rounds. Structure your ESOP for partial exercises. Don’t wait until Series C to start these conversations.

2. Create a Value Realization Roadmap Alongside Your Growth Plan

Use tools like the Outcome Canvas to map specific liquidity events:

• Year 3: First founder secondary (10% of equity)
• Year 5: Seed investor partial exit opportunity
• Year 6: Strategic secondary or growth equity with buyout component
• Year 7-8: Full exit transaction

You’re not choosing between value realization and exit—you’re building a systematic path that includes both.

3. Educate Your Investors on Progressive Liquidity

Many MENA investors still have an “all or nothing” mentality. Your job is to help them understand that progressive value realization:

• De-risks the journey for everyone
• Keeps founders motivated for the long haul
• Proves the model works before the final exit
• Creates local success stories that strengthen the ecosystem

4. Look at Maturing Markets as Your Template

In Singapore, Switzerland, and increasingly parts of Asia, value realization is systematic. Secondary markets function efficiently. Late-stage funds expect to provide some liquidity to early investors. Founders take partial liquidity at Series B+ as standard practice.

MENA needs to adopt these practices. The infrastructure is slowly emerging—growth funds offering secondaries, family offices providing liquidity solutions, regional exchanges developing. But founders need to demand these mechanisms, not just wait for them to appear.

5. Don’t Confuse Paper Gains with Real Outcomes

Your company hitting a $1B valuation is value creation. It’s impressive. It’s meaningful. But it’s not value realization until someone can convert equity into cash.

Stop celebrating valuations like they’re victories. Start celebrating liquidity events—even small ones—because those prove the model actually works.

The Path Forward for MENA

The region is at an inflection point. We’ve proven we can create extraordinary value. Now we need to mature the mechanisms for realizing that value.

This means:

• Investors being open to structured secondaries and partial liquidity
• Founders demanding value realization provisions in term sheets
• Ecosystem builders creating secondary market infrastructure
• Government entities supporting liquidity mechanisms through policy
• Accelerators and advisors teaching founders about value realization paths

The difference between a mature startup ecosystem and an immature one isn’t value creation—it’s value realization infrastructure.

The Bottom Line

Value Creation = Building the company (revenue, IP, market share, team)

Value Realization = The mechanisms you use to deliver liquidity (secondaries, partial sales, strategic buyouts, and yes—exits)

Exit = One major value realization event (M&A, IPO), but not the only one

Liquidity = The actual cash that results from value realization

Stop thinking “build the company, then exit.” Start thinking “build the company, create progressive liquidity along the journey, then exit.”

The founders who master all three? They’re the ones who don’t just create paper wealth—they create generational outcomes for themselves, their teams, and their investors.

And they’re the ones who stick around long enough to build MENA’s next generation of billion-dollar companies.

At Strategy Tools, we work with MENA startups, VCs, and ecosystem builders to develop systematic approaches to value creation, value realization pathways, and exit execution. The Scale Up MENA! masterclass helps founders understand these critical distinctions—and build companies designed for liquid outcomes from day one.

The question isn’t just “What’s your company worth?” It’s “When and how do you convert that value into cash?”

In November 2025, we will be running five Scale Up MENA! Masterclasses in Dubai. In December, we are back in Cairo, Egypt again. Want to join us? Get in touch. Chris@strategytools.io

Read more about the Scale Up MENA! Masterclass.

Thanks to Abdullah Mutawi , Scott Newton & Rick Rasmussen for inspiration for this post.

Leading up to the 2025 VC Fund Manager Masterclass in Mauritius, we explore the history and current ecosystem for venture financing in Mauritius. The country is already well-established as a financial services hub, with a thriving industry and large number of funds domiciled. Over a series of short articles we explore:

• How did Mauritius grow into a fund management hub?
• How is the venture industry performing today?
• What is the future of venture capital and the VC ecosystem in Mauritius and Africa?

Introduction

The financial services sector in Mauritius has a rich history dating back to the 17th century when the island was used as a regional payments and settlements hub by traders. Today, Mauritius stands as one of Africa’s most sophisticated international financial centers, boasting over a thousand funds, a collective AUM in excess of USD 80 billion, and a sizeable number of them from development finance institutions and sovereign wealth funds. This transformation from a sugar-dependent colony to a global fund administration hub represents one of the most remarkable economic evolution stories in the developing world.

Historical Foundations: The Early Years (1968-1990s)

When Mauritius gained independence in 1968, few observers anticipated its future as a financial services powerhouse. Nobel Prize winner James Meade prophesied in the early 1960s that Mauritius’s development prospects were poor, citing the island’s heavy dependence on sugar, vulnerability to terms of trade shocks, and potential ethnic tensions.

While the financial sector was already relatively well developed at independence, the robust economic performance over the last two decades strongly contributed to its further expansion. The Bank of Mauritius, established as the central bank, played a crucial role from the beginning. From the very beginning the BOM focused on creating the framework for a modern financial intermediation system that could allocate resources efficiently to fund development needs.

The foundation for modern financial services was laid early, with treasury bills issued by tender on a monthly basis starting in April 1969, and the central bank providing forward cover for foreign exchange risk as early as 1968/69, recognizing the economy’s openness and dependence on trade.

The Offshore Revolution: 1990s Transformation

The real transformation began in the early 1990s with strategic legislative changes that would reshape Mauritius into a global financial center. Following the economic liberalisation in India in 1991 and the creation of the Mauritius Offshore Business Activities Act (MOBAA) in Mauritius in 1992, there was a rise of activities in the Mauritius Offshore Sector.

The government implemented several key reforms that laid the groundwork for the fund administration industry:

• 1994: The Government abolished the foreign exchange control by suspending the Foreign Exchange Control Act in order to enable free repatriation of capital
• 1996: A deemed foreign tax credit was conceived as a simple and practical approach to the domestic fiscal treatment of foreign investment returns

These reforms created the enabling environment that would attract international fund managers and administrators to establish operations in Mauritius.

The New Millennium: Regulatory Sophistication (2000s-2010s)

In the 2000s, Mauritius embarked on a transformation period with the view of establishing a more stable and reputable financial centre. The most significant milestone came in 2001 with comprehensive regulatory reform.

In 2001, the MOBAA was repealed and replaced by the Financial Services Development Act. Subsequently, in the same year, the Financial Services Commission (FSC) was set up to replace MOBAA, to regulate and supervise all non-banking financial services.

The FSC’s establishment marked a turning point in the industry’s evolution. The vision of the FSC is “to be an internationally recognized Financial Supervisor committed to the sustained development of Mauritius as a sound and competitive Financial Services Centre”.

This period saw significant growth in the fund administration sector, with Mauritius positioning itself as a gateway for investments into Africa and Asia, leveraging its strategic location and favorable time zone.

Current Industry Landscape: A Global Hub

Today, Mauritius has emerged as a dominant player in the global fund administration industry. Mauritius is home to some of the most impactful and leading funds from around the world, with impressive statistics that underscore its significance:

• The Mauritius IFC also hosts reputable legal firms, professional services firms and renowned management companies, which collaboratively service nearly 1000 global funds and facilitate operations for over 15,000 companies in the Global Business sector
• The MIFC counts more than 450 private equity funds that are investing in Africa and nearly $40 billion investments in Africa were structured through Mauritius

Leadership Perspectives on Industry Evolution

Dr. Désiré Vencatachellum – FSC CEO on Future Vision

The industry’s future direction is being shaped by new leadership with a clear vision. Dr. Désiré Vencatachellum, the newly appointed CEO of the Financial Services Commission, brings over 30 years of experience in development finance. “Harnessing this strength will be key to advancing our financial ecosystem,” he said, referring to Mauritius’s tremendous potential and wealth of talents.

Dr. Vencatachellum emphasizes the strategic importance of Mauritius’s positioning: “We must shape the FSC that is not only relevant for today’s challenges but also resilient and forward-looking for 2030 and 2050”. He highlights the key role of Mauritius as a dynamic gateway between Africa and Asia.

PwC’s Sharvin Ballah on Market Opportunities

Sharvin Ballah, Partner at PwC Mauritius, provides insights into the sector’s growth potential. In absolute terms, the AWM expansion would be the fastest growing in the Middle East and Africa at a projected 6.9% CAGR. He emphasizes that Mauritius, as a prominent International Financial Centre (IFC), has demonstrated its capabilities to serve that purpose.

Ballah highlights the competitive advantages: Strategically positioned with an advantageous time zone between Africa and Asia, the Mauritian jurisdiction is highly regarded as a favourable business destination with a range of unique offerings for the AWM sector.

Tax and Regulatory Framework: Competitive Advantages

Mauritius offers one of the most attractive tax regimes for fund administration globally:

• There is no capital gains tax in Mauritius and no withholding tax on dividends and interest
• As a result, 80% of the foreign-source income derived by a Collective Investment Scheme (CIS), Closed-End Fund (CEF), CIS manager or CIS administrator are exempted from income tax
• Recent enhancements include the announcement to increase the partial exemption to 95% for Collective Investment Schemes (CIS) and Closed End Funds (CEF)

The regulatory framework is comprehensive and internationally compliant. Mauritius’s financial services sector upholds corporate governance and international regulations through the overarching Financial Services Act (FSA) and oversight by the well-established Financial Services Commission (FSC).

Innovation and Technology: Embracing Digital Transformation

The industry is embracing technological innovation to maintain its competitive edge. Automation and fintech innovations are shaping the future of admin services. Automation has led to increased efficiency in the calculation of NAVs, financial reporting, and compliance monitoring.

Mauritius has also moved to accommodate emerging asset classes. The FSC has recognised such digital assets as constituting asset-class for investment by sophisticated and expert investors, Professional CIS, Expert Funds and specialised CIS.

Challenges and Opportunities: Looking Ahead

Despite its success, the industry faces challenges from global regulatory changes. The new amendments to the double taxation agreement are likely to constrain the growth of Mauritius’ offshore sector. Critics note that the financial sector has not transformed beyond providing basic services like fund administration, unlike more diversified financial centers such as Singapore.

However, industry leaders remain optimistic about future prospects. Expectations and hopes are higher than ever before with the Global assets under management (AuM) targeted to rebound by 2027, with expected revenues of up to US$622.1 billion, of which 50% is forecast to be generated from private markets.

The African Connection: Strategic Positioning

Mauritius’s role as a gateway to Africa remains central to its value proposition. Besides its location and strong network, Mauritius offers excellent connectivity to conduct and facilitate business with the emerging African market.

The government has actively promoted this positioning through various initiatives, including the creation of a Mauritius Africa Fund (MAF) in 2013, a public entity with a budget of $11 M to assist Mauritian companies to invest in Africa.

Regulatory Excellence and International Recognition

Mauritius has achieved recognition for its regulatory standards. Globally, the island stands out as one of the very few countries which are compliant with all the 40 recommendations of the FATF, placing significant emphasis on anti-money laundering and counter-terrorist (AML/CFT) measures within a robust framework aligned with international norms and best practices.

Economic Impact and Future Strategy

The fund administration and management industry has become a cornerstone of Mauritius’s economy. It transformed itself from a country with a per capita income of US$260 in the 1960s to one with a per capita income of more than $10,000 in 2021.

In 2015, the Ministry of Financial Services, Good Governance and Institutional Reforms was created and the Government has since then embarked on a strategy to further graduate Mauritius as a full-fledged International Financial Centre.

Conclusion: A Sustained Success Story

The evolution of Mauritius’s fund administration and fund management industry represents a remarkable transformation story. From its origins as a colonial trading post to becoming noted as the gold standard for fund management and administration, Mauritius has demonstrated the power of strategic vision, regulatory excellence, and adaptive governance.

As Dr. Vencatachellum noted, Mauritius has tremendous potential and is home to a wealth of talents. With over USD 80 billion in assets under management and a regulatory framework that continues to evolve with global standards, Mauritius is well-positioned to maintain its leadership in the global fund administration industry.

The industry’s future success will depend on continued innovation, regulatory adaptability, and the ability to serve as an effective bridge between international capital and emerging market opportunities, particularly in Africa. As the sector looks toward 2030 and beyond, the foundations laid over five decades of strategic development provide a strong platform for continued growth and evolution.

Invitation: Upcoming Fund Manager Masterclass

We are thrilled to be hosting the first ever VC Fund Manager Masterclass in Mauritius October 28th – 30th. Read more and sign up today.

Sources and References

1. Mauritius International Financial Centre. “History.” Accessed July 2025. https://mauritiusifc.mu/our-ecosystem/history
2. Mauritius International Financial Centre. “Fund and Asset Management.” Accessed July 2025. https://mauritiusifc.mu/global-funds
3. Financial Services Commission, Mauritius. “About Us.” Accessed July 2025. https://mauritiusifc.mu/government-agencies-regulators/financial-services-commission
4. PwC Mauritius. “Asset and Wealth Management revolution: Central Hub in Mauritius.” https://www.pwc.com/mu/en/about-us/press-room/asset-and-wealth-management-revolution.html
5. AllAfrica. “Mauritius: Deputy Prime Minister Meets Newly Appointed CEO of Financial Services Commission.” July 24, 2025. https://allafrica.com/stories/202507240623.html
6. AFSIC. “The Role of Fund Administrators in Mauritius.” July 5, 2024. https://www.afsic.net/the-role-of-fund-administrators-in-mauritius/
7. U.S. Department of State. “2024 Investment Climate Statements: Mauritius.” January 4, 2025. https://www.state.gov/reports/2024-investment-climate-statements/mauritius
8. International Monetary Fund. “Mauritius: A Case Study.” Finance & Development, December 2001. https://www.imf.org/external/pubs/ft/fandd/2001/12/subraman.htm
9. DTOS Group. “Budget Highlights 2023-2024 ‘To Dare & To Care’.” June 15, 2023. https://www.dtos-mu.com/budget-highlights-2023-2024-to-dare-to-care/
10. The Conversation. “Mauritius’ next growth phase: a new plan is needed as the tax haven era fades.” November 14, 2024. https://theconversation.com/mauritius-next-growth-phase-a-new-plan-is-needed-as-the-tax-haven-era-fades-231008

Case study written for the upcoming launch of Scale Up MENA! (Aug 2025). Read part II: scaling up (Series A,B) and part III: Growth stage (Series C,D to exit)

What does the journey of a new fintech startup look like in MENA?

How does a founder team scale through all the challenges along the journey?

What are the key elements to get right as founders scale up?

(A three-part story on scaling a fintech in the Middle East, written as a part of the upcoming launch of Scale Up MENA, august 2025. Read Parts II and III of the journey for the founders at LEO bank

Part I: The Early Days (Start Up Phase, Seed)

“There is absolutely a market for new, innovative banking solutions in the region”, Malik said. Sitting at the Starbucks at the DIFC in Dubai, the four friends were deep in discussion about their new startup idea. The discussion had been simmering for nearly two years, but really picked up in the last four weeks.

Adnan and Liz were early Careem employees, and had seen the inside of a rocket ship in the region. They were eager to do the journey again, but this time as founders, not just early employees.

Maheen had led McKinsey’s banking practice in the region and new big banks were facing disruption. With an MBA from LBS, and a stint in venture capital with Passion Capital in London, she could traverse the worlds of startups, corporates and financing easily.

Malik was the visionary, the product builder. His experience as an early employee at Chime in the US, and more recently Tabby, in the region, had given him the confidence to dream bigger for what could become Leo Bank.

“We need to be clear about our journey, what’s ahead of us”, Adnan said. As a former mentor for MENA accelerators, he had seen more often than not, founders thinking too short-term, not understanding the full journey they were embarking upon and not setting themselves up for long-term success. “Let’s make sure we all align on the Founder’s Journey, and what’s ahead of us”, Adnan shared with the group again.

The Founder’s Journey (Rangen, 2023. Get it at www.strategytools.io)

As the friends were discussing, they also followed the news intently from NASDAQ, where fintech Chime’s IPO  was a huge success, shooting up nearly 40% on IPO day. Malik, regretfully had never gotten into the equity pool, in fact, one of the reasons he left relatively early. For Malik, personally, employee equity ownership was now a hard-earned lesson, as well as a key success factor in his thinking shaping Leo Bank.

Chime IPO, a driving motivation for Malik in launching LEO Bank.

Over more coffee, the friends sketched out the early outline of what would become Leo Bank. “A digital bank for the future”, Maheen called it. “Aimed at tech savy, high-end users”, Liz had said, “with multiple revenue streams”, after all, she was the natural Chief Revenue Officer (CRO) in the group.

The friends sketched out the early strategy, and leaned in. “Let’s do it!” , “Let’s build and scale!”, and they were off to the races.

Leo Bank Company Card

(In Scale Up MENA! participants select a case company card they would like to work on, with the task to scale the at case company from early idea to successful exit. Just like the four friends here)

Shaping Early Strategy

“I have identified nine strategic building blocks for us to win.” Maheed was the natural CEO of the group. With her consulting background and extensive venture experience from London, she could sketch out concepts and articulate early-stage, fast-moving, flexible startup strategies better than most. Her favorite class at LBS had been Luisa Alemany’s Entrepreneurship and Private Capital program, where Global Venture founder Noor Sweid had been the most inspiring guest speaker, sharing her journey to build Global Ventures.

The nine building blocks turned into nine strategic questions, questions Maheed would use as the team’s CEO to navigate the Founders’ Journey.

The nine building blocks to scale and win. Scale Up MENA!

Setting Up The Foundational Equity

“How will you structure and distribute our founder equity?”, the question asked by the Chairman of the Dubai Angel Network had struck a nerve. None of the team members had had a good answer. They poured over Carta’s Guide to Foundational Equity, and realized this was incredibly important as they laid the foundation for long-term success. 7-years founder vesting schedule , 18% ESOP sizing pool, advisor equity, first 10 hires equity, and first 250 hire equity structures were all discussed in detail. The experience of having been early employees at Careem ($3,1BN exit) and Chime ($18BN IPO market cap) had led all of them to understand the importance of getting the foundational equity right and using equity wisely to manage the growth ahead of them.

The Cap Table

The team landed on an opening cap table, with four equal co-founders, and all terms secured in the Founding Shareholder Agreement. Each founder put in $125.000 of personal savings (and two credit cards) to get Leo Bank launched. At $5 per share and 100.000 shares, they took their first step on the long cap table journey.

Initial cap table with four founders

Setting The Roles, Setting Expectations

“How do we build a high-performance team to scale?”, in the early days, the team carved out ample time to align on culture, leadership, roles and mutual expectations. They were clear on creating a high-performance culture, yet balance this with the lifestyle they wanted. Recognizing the 8-10 year journey, the marathon, ahead of them, they rejected the 9-9-7 schedule some of their Silicon Valley friends lived by. “We have to be smarter than that”, Liz had said over and over.

Customer Discovery

Identifying the problem-solution fit was a clear mission critical activity for the team early-on.

The team and the first two hires spent north of 50 hours per week, doing 350 customer interviews and 120 customer observations. Their goal: to clearly understand the gaps and weaknesses of today’s banking solutions, and iterate on early ideas for solutions. What was clear from the interviews and observations was clearly that today’s solutions were not sufficient for the banking of tomorrow. Ease of use, trust, convenience, UX, AI, simplicity and speed were all words that came out of the customer discovery process.

Based on the insights, the team developed 4 early ICP or Ideal Customer Profiles, for their beachhead target audience.

Charting A Long-Term Capital Strategy

“How will we finance the founder’s journey, with equity, grants, debt, investors (SAFE, CLA, equity), revenue, ARR and project financing?”. This was the question that Adnan and Maheen constantly focused on. Scaling will require $500M – $1BN to exit. We need to be long-term smart and craft a 8-10 year capital strategy.

The team was clear. We are not building ‘yet another fintech’. We are going to pour everything we got here to build, lead scale and exit, one of the leading fintechs of their generation. A once-in-a-lifetime-shot.

Adnan And Liz Were Both Clear: We Need To Outperform Careem. From Zero To $3,1BN Exit In Just Seven Years, That Was The Floor, Not The Ceiling Of Their Aspirations. Maheen, Of Course, Had Her Eyes Set On Leading A Listing, Possibly In Saudi Or London.

Regardless, they knew they needed a long-term plan for capital at scale.  Using his bag of tools, Adnan had presented the team with his plan for the Funding Roadmap, broken down by source of capital, quarter-by-quarter over the next three years. Using the Long-Term Founding Roadmap, he had then mapped out a high-level plan for the next 6-7 funding rounds. They team left that working session amazed by his strategic perspective on financing.

The Funding Roadmap and Long-Term Funding Roadmap, two key tools for any CFO

Developing The Product Roadmap

“How do we develop our product to level 5, global product leadership?”, Maheen had asked the team one day during the customer discovery process. Malik, with his CTO/CPO background was able to quickly sketch out his views on how to scale from early prototype (level 1) to global product leadership (level 5).

Scaling With AI

“How do we scale faster with AI, from level 1-5, AI Mastery?”, more novel and more challenging for the team was the question Liz brought to the table one day over working lunch at Alaya Dubai.

Liz had just come out of a morning event hosted by AWS and DFDF on using GenAI to scale GTM and sales organizations. “Tunc said we should seize the opportunity and make all MENA startups AI-first”, she said. The AWS ecosystem advisor had been an early champion for AI in the and was now showing multiple incredible success stories on how UAE-based startups had vastly increased their revenue velocity by using AI tools. “We have to build AI tools into our core DNA”, Liz shared with the team.

Raising The Pre-Seed

Based on the aggressive financing plan, the team knew they needed to move fast and secure financing before they ever actually started running low on cash. Adnan quickly built out the decks, financial model, budget, data room, strategy, and legal documents Leo Bank would need to move quickly on the fundraising. He chose SAFE as the instrument for the first two rounds.

(What Is A SAFE? SAFE Stands For Standard Agreement For Future Equity And Has Emerged As The Most Common Early-Stage Investment Instrument. Read More)

The team reached out to family members, and Liz’s younger brother jumped on a $200.000 SAFE, with a 3M cap. He requested to see the product roadmap, which was already in the dataroom. (Note, when doing a SAFE note, there are no changes to the company’s cap table. That only happens at the time of conversion)

First investor in, the younger brother 200.000 SAFE Note

Early Product Launch

“How is our early beach head users loving our product?”, Malik and his small team of engineers had spent 20+ hours a day to get the first iteration of the product ready to launch. Early users loved it, and the word was out, that Leo Bank was worth trying out.

Closing The Seed

Six weeks later, the team closed their second round. The seed round was yet another SAFE note, this time led by Dubai Angel Investor Network for a 500.000 SAFE at a 3M cap. Liz’s older brother also joined in. Together with a handful of friends he brought another 500.000 on the same SAFE terms. with a total of 1,2M secured in early-financing the team, Adnan’s focus now shifted to ‘who should lead our seed+, knowing that their revenue was not ready to go for a Series A just yet.

Seed investors, 500.000 SAFE note

Seed investors, 500.000 SAFE note

Setting Up The ESOP

“When do we set up the ESOP?”. It was Maheen that had brought it up first. It had been a key part of the foundational equity discussion, but never got executed. Recalling the earlier conversation, Maheen and Adnan decided to move forward with a rather large allocation to the Employee Stock Option Program at 18%.

But understanding how to use equity to attract top notch talent, secure advisors and build a strong culture of ownership for the first 250 employees and beyond, the ESOP was not just a program, it was a strategic weapon to use to outcompete the vast majority of fintech startups in the region. The team decided to always show the ESOP on the cap table, but labelling it unallocated, fully diluted for new investors and new staff to best understand it. Of course, the actual allocation would be coming later, most likely through a company-wide SPV, to simplify and streamline cap table management as the company grew.

Cap table, with ESOP, showing fully diluted cap table pre-conversion

Securing Early Strategic Advisors

“GTM, market expansion, VC connections or AI? What are the right types of advisors we should bring on board?” The question had been hotly debated after one of the DIFC meetups, where the team met a vast number of possible, future advisors.

Meeting and selecting your strategic advisors, who would be the right advisors for Leo’s founding team?

Locking In The Seed+

it took 24 meetings, but the one meeting that mattered was running into Omer  from Shorooq Partners. He asked to take the full round at 5M pre-money, for a 9,1% post. The team was also ready to open their network, to bring in three possible candidates to lead the Series A, already being shaped up for early next year.

Shorooq took the entire Seed+, at a 5M pre-money valuation

Running The Cap Table

So, with 2 rounds of SAFE notes, and now the equity round, it was time for Adnan and Maheen to update the cap table.

Cap table, with converted SAFE notes, pre-equity round.

With the ongoing seed+ with Shorooq, Leo Bank needs to first convert the pre-seed and seed SAFE notes. With a 3M cap, these investors are able to come in at a very attractive valuation, coming in at $25 per share.

Next, Omer and Shorooq Partners come in at a 5M post-money, equating $29 per share.

Cap table, post Seed+, getting ready for Series A

Looking at the cap table, the team realized, the early days of the company had cost them dearly in equity ownership. From 100% to now, a total of 53,2% ownership (fully diluted), the team had chosen to share ownership, both with early investors, angels and with a long-term, well crafted plan towards 250 staff.

Looking ahead, the questions were now,

– How to scale revenue?

– How to expand across the region?

– How to secure a strong Series A and Series B, with a value uplift that would not be to hard on the cap table.

Main question, was the team ready to scale?

Next…..

Part II: Scaling Up (Series A,B)

Closing the series A has been tough. “This is by far the hardest thing I have ever done”, Adnan was bone tired. Leading the process, investor meetings, DD and final negotiations had been hard. But, the round had been a huge success, a new strategic investor was onboard, and the focus was now 100% on hitting the key revenue milestones. $10M revenue, $50M revenue and $100M revenue. How long would that take? …. (Read Part II).

Part III: Growth Stage (Series C,D To Exit)

“What does your outcome canvas look like?” the question from the investment team at Oman Future fund had taken the founders aback. Outcome? Canvas? In exploring a lead candidate for  the Series C, it was clear that the conversations, the expectations and the strategic thinking was going to be a big step up from the conversations they had back at Series A. “Are you aiming to list in Riyadh, London or the US?” …. (Read Part III).

Scale Up Mena!

Scale Up MENA! From Idea to Exit is one of the world’s leading methods to accelerate a startup’s successful growth journey. The Scale Up MENA! Masterclass is designed to help founders understand how to lead through the founder’s journey, from idea to ultimate exit.

Handle early-strategy, product development, AI, SAFE notes, local accelerators, venture financing, market expansion, ARR growth, growth financing, market leadership and exit transaction – all based on real content from across the MENA region.

Launching August 2025. Learn more.

Case study written for the upcoming launch of Scale Up MENA! (Aug 2025). Read part I here and part III here.

Closing the series A has been tough. “This is by far the hardest thing I have ever done”, Adnan was bone tired. Leading the process, investor meetings, DD and final negotiations had been hard. But, the round had been a huge success, a new strategic investor was onboard, and the focus was now 100% on hitting the key revenue milestones. $10M revenue, $50M revenue and $100M revenue.

How long would that take?

Looking back, it was the workshop with DFDF that had laid the foundation for the Series A success. Navigating the Road to Series A was a series of workshops hosted by Dubai Future District Fund and AWS, delivered by Chris Rangen. That was one of the key perks of being located in Dubai. The ecosystem was strong, supportive and perfectly suited for fast-growing companies. Maheen and Adnan had both attended the workshop.

Initially, it was overwhelming. 5 phases, 43 unique steps to nail your Series A. It was a lot to take in, but wow!

Sure, Only 10% – 15% Of Companies Successful Make The Jump From Seed To Series A, But This Was A Tall Order Still.

The Funding Journey. 5 phases, 43 steps to nail your fundraising rounds

Adnan had taken three main points away from the workshop.

1.      Set your fundraising team

2.      Build your long investor list and investor CRM

3.      Aim for five competing term sheets

(See Funding Journey for all 43)

Those three points had become their focus.

For the fundraising team, they discussed with the team and agreed. “Maheen and I will take six months, and only, only focus on closing our series A”. The others had agreed with some hesitation. The team had grown to 21 people by now, there was a lot of young talent on the team, but leadership was still needed. “Liz will take over as co-CEO”, Maheen had decided.

Your Funding Team. A key success factors to land your Series A and beyond

The best thing they ever did on the fundraising team was assign two of the data analyst to a skunk project. Together with Maheen and Adnan, the two analysts made up the fundraising team. In just two weeks they built an impressive AI-engine, allowing them to gather 2.400 investor prospects for the A-round. Analyzing track records and strategic fit, the list was cut down to 800. Analyzing capital for follow-on rounds and exit track record, the list was further reduced to 68 names.

Out of these 42 initial meetings took place. The one meeting in Singapore had really stood out. “We will sell your assets to a NewCo in Singapore, do a recapitalization, get rid of your old investors and then inject 500M in growth capital”, the Managing Partner had said. The meeting ended quickly.

In the US, many of the initial meetings centered on use of AI, roadmap to US IPO or downside protection. “It really seems like 3X liquidation preference participating is the new normal here. The valuations may be higher than back home, but the terms are harsh and demanding. Let’s try to find a investor group in MENA we can work with”, Maheen had said as they were flying back from a series of meetings in New York.

Fortunately, via Shorooq’s network, they had found multiple options for the A-round in the region,

Sure, the conversations, due diligence and term sheet discussions had taken months, but ultimately, they were down to three solid term sheet; still not the five they were targeting but still ok. With 800.000 users the user growth was strong, but revenue was still lagging. They had aimed for 3M revenue before closing, but the reality was closer to $2,1M; still some ways to go. This lower-than-forecast revenue, also came back to bite during term sheet discussions.

Three competing sets of terms sheets at Series A

Venture Souq’s Fintech Fund was supportive, and really wanted to get a deal done. “With your metrics, we can do $1M $8M pre, and really help connect you for larger, full series A in about 6 months time”.

The team at BECO had been incredibly supportive and their whitepaper “Strategy in AI’s Shifting Sands: A Venture Framework for MENA Value Creation” had grown into a manifesto for the AI team at Leo. “We would love to work with you, but the metrics you have today does not justify anything above $25M post”, Abdulaziz had stated. Famous for their views on there are only two venture-return size companies born in MENA every year, BECO did not have full conviction on Leo’s return potential yet.

In the end, a structured syndicate come together, co-led by Michael at Golden Gate Ventures, Medea at Global Ventures and Monk Hill taking a minor role. The terms landed on:

-$30M pre-money

– $10M round size, 4M from GGV, $4M from GV and $1,5M from MH.

– Two advisors were assigned a small allocation in the same round.

– 1X liquidation preference participating

– Reset of vesting for the founder team

“The Region’s Banking Favorite Secures Strong Series A”, Read The Press Release When The News Were Released During GITEX.

Cap Table, Post-Series A

Leo Bank’s cap table, post Series A. founders at 40%, with 7,8% remaining in ESOP

Setting Up A Strategic Board

After closing the Series A, Omer had been clear on his recommendation. “We are going to set up a long-term, strategic board that can take us all the way”. The founders had not really seen the need. “We are doing fine”, Maheen had said.

But the investors were clear. A strong board will only help the team accelerate. It was agreed that the board would have two founder seats, Maheen and Adnan, two investor seats and one industry expert. James P. Gorman, former CEO of Stanley Morgan was elected Chairman of the Board after a three month search period.

Team Shake Up

The trouble had been brewing for a while. Maybe it was the stress from scaling from 800.000 users to 2,5M in just six months. Maybe it was just a consequence of having worked closely together for the past 3,5 years. Everyone had felt it, but no one had wanted to get into it.

Looking back, the fallout that followed was almost inevitable. “Listen, I have worked my butt off for years!”, Malik almost shouted. “No, you are not just leaving!”, Maheen replied. The stress, the lack of technical depth on the team, the demands of scaling towards a series B. The journey was not quite what Malik was expecting.

As the technical genius he had built the first generation of the platform, but the reality was that the first generation had just not been scalable. Maheen had spent months recruiting a technical team around him, only to realize that the tech stack they had built just was not very scalable. It had all come to head in one of the engineering team sessions. “So, you are telling me we have to rip out and replace our entire back end platform?”, Maheen had asked the Senior Platform Lead. He has just joined from Klarna, with previous CTO experience from two fintechs in London. The decision had been made. The entire platform was getting rebuilt, redesigned, restructured from scratch. That was the moment when Talik started drifting. He was no longer up to the task. His company had outgrown him. Probably, Maheen could have handled it then.

Weeks had gone by, when Malik broke the news. He had just accepted a role with Microsoft. He would be leaving within the week. He also announced, “I am taking my co-founder equity with me”. His departure from Leo Bank was quickly turning sour. Maheen felt a ting of panic. She had seen too many broken cap tables, with co-founders walking away with large equity positions, leaving the company uninvestable for upcoming rounds. “Foundational equity”, she thought. We have already covered this! She dug through the company files while calling her contact at Shorooq.

Sure enough, the initial foundational equity agreement the four had signed 3,5 years ago covered exactly this scenario. Any unvested shares, in the case of a founder leaving, would go back into the ESOP pool, to be allocated by the CEO. The vesting terms were even reset at Series A, with 7-year vesting and a 1-year cliff. The paperwork was all signed. Malik, it turned out, would be walking away with zero equity.

The next day, Maheen, Adnan sat down with Malik, back at their old Starbucks at the DIFC. “Listen, we don’t want to part ways on bad terms. You have worked hard, we all have, the last 3,5 years. Yet, we have a long, long way to go. We need to manage our cap table for long-term success”, Maheen had said. It took a few days, but in the end, the team agreed on a 1% equity post to Malik, and retain him as a senior advisor for the next 36 months. “Imagine, where would we have been if we did not have the foundational equity paperwork in place”, Adnan said as they closed the deal and parted way with Malik.

Cap Table – Updated Post-Malik’s Departure

Cap table, updated post one of the founders leaving. Thanks to good paperwork, the most of the equity went back into the ESOP.

Market Expansion: Where Do We Ramp Up Next?

“Which of the next markets should we expand into, and how soon?”, that was the question Liz  had focused on the last six months.

Ever since they closed the Series A, the mantra was growth, growth and growth. But, more than just growth, her team had managed to build an incredible AI powered tech stack, turning her 25 people team into a 24/7 growth army. “With the new stack, we are automatic processes that would have taken us 3X as many people and months to complete. We have, maybe, the most native AI-GTM stack, by any startup in MENA”. Alex, her head of AI infrastructure had been a find!

She had poached him from OpenAI during one of the OpenAI ecosystem events. He was, it turned out, an AI engineering genius. The team used AWS SageMaker as the core. On the customer facing side, tools like Segment, 6sense, Clay Brand24, Jasper.ai, WhatsApp Business API, Phantombuster, Voiceflow, Madkudu Clearbit, Synthesia and Revenue.io were built into a 24/7 growth engine. “This thing is getting smarter by the minute”, Alex had said during one of their working sessions. Alex had recruited a deeptech team from AWS, Salesforce, OpenAI and Anthropic to build out a new kind of automation ecosystem for Leo.

Using this system, Leo was now able to expand flawlessly across MENA. The system even recognized different regulations in different markets and instantly adapted the platform in line with these regulations. The same had started happening by segments, were people were increasingly seeing a highly, highly personalized version of the platform, from first prospecting touchpoint all the way through daily usage.

Revenue Growth

“How do we build a successful ARR engine to get us to 100M revenue and beyond?”, that was one of the nine questions Maheen had drawn up when they started. Liz, together with Alex and the deeptech team had built just that.

On The MENA Startup Show, Liz had called this “Our beautiful, hyper scaling engine”. Well, the engine had allowed Leo to blitz scale, from 800.000 users to 2,5M users, and now rapidly approaching 5,5M users, in just 12 months. Revenue was starting to pick up, and the finance team was forecasting a robust 35M revenue for the year, looking at $75M next year.

“This is what blitscaling feels like”, Maheen had said during an all-hands meeting.

Leo Bank’s three remaining founders on stage for the monthly all hands meeting. As the company grew to 85, then 120, then again 200+ employees, leadership and culture become a far bigger challenge than the team was ready for

Momentum Going Into Series B

“We need to think about our Series B as stepping stones into the world of large capital allocators”, James had said during a board meeting. Maheen knew he was right.

Thanks to the investor CRM and AI automation they had built for the Series A, and the work the Investor Relations team had been doing, sending monthly updates, taking regular check in calls, hosting investor roundtables in different cities and regularly taking deep dive sessions with the target prospects, the round came together in record time. Sure, they now had 4.800 names in the investor CRM, but there was only a handful that that would really like to work with.

In the end, the team had two competing term sheets, from Wamda Capital and MEVP. Both of them solid investors that could structure rounds from late seed to Series B.

Two competing term sheets from two great Super Investors, Wamda Capital and MEVP. In Scale Up MENA, you will meet and navigate 100’s of competing investors and term sheets. Are you able to unpack the terms here?

Cap Table Post Series B

Cap table, post series B. Now with new investors, two team SPVs, two advisors, the cap table is starting to get interesting.

The Series B deal was a big step up in valuation, taking the company from $40M last post in the Series A, to $300M pre-money for the B.  Wamda showed high conviction with a $40M investment, and Golden Gate Ventures, Global Ventures and Monk Hill all followed on with 500.000 each, as per the term sheet requiring three participating co-investors. Management also issued Team SPV #2, with 4.000 shares to the team, who was now quickly growing towards 85 people across four offices. The strike price was set at a 100, instantly giving the staff a 12x multiple on their investment. Of course, the shares were only available on a 7-year vesting schedule with a 1-year cliff, virtually locking in talent to stay with Leo Bank.

Now, The Stage Was Set For The Next Growth Phase. Could The Team Take Leo Bank Past Tabby’s Explosive Growth?

Could they hit 15M users and $500M revenue?

Was there a $1BN, a $3BN valuation on the horizon?

Could they find the growth hacks to scale past Careem’s $3,1BN exit?

Read Next…

Part III: Growth Stage (Series C,D To Exit)

“What does your outcome canvas look like?”, the question from the investment team at Oman Future fund had taken the founders aback. Outcome? Canvas? In exploring a lead candidate for  the Series C, it was clear that the conversations, the expectations and the strategic thinking was going to be a big step up from the conversations they had back at Series A. “Are you aiming to list in Riyadh, London or the US?” …. (read part III here ).

Part I: The Early Days (Start Up Phase, Seed)

“There is absolutely a market for new, innovative banking solutions in the region”, Malik said. Sitting at the Starbucks at the DIFC in Dubai, the four friends were deep in discussion about their new startup idea. The discussion had been simmering for nearly two years, but really picked up in the last four weeks…. (read full part I here)

Scale Up Mena!

In Scale Up MENA! you and your team members step into the shoes of a founder team in MENA. You select amongst 30+ case companies. Your task: scale your new case company from an early idea to a successful exit, while also competing with 3 to 20+ other teams, all trying to outcompete and outrace you. Along the way, manage the nine building blocks Maheen identified early on, raise multiple rounds of financing, accelerate revenue velocity, scale with AI tools and try to outcompete the likes of Careem and Tabby. Are you up for it? Are you ready to Scale Up In MENA!?

Globally, more than 3.500 founders, investors and ecosystem builders have mastered cap tables, growth strategy and exits with Scale Up! Now, for the first time, we are ready to launch a 100% MENA version.

Scale Up MENA! From Idea to Exit is one of the world’s leading methods to accelerate a startup’s successful growth journey. The Scale Up MENA! Masterclass is designed to help founders understand how to lead through the founder’s journey, from idea to ultimate exit.

Handle early-strategy, product development, AI, SAFE notes, local accelerators, venture financing, market expansion, ARR growth, growth financing, market leadership and exit transaction – all based on real content from across the MENA region.

Launching August 2025. Learn more.

A three-part story on scaling a fintech in the Middle East, written as a part of the upcoming launch of Scale Up MENA, august 2025. Read part I: the early days (start up, seed): and part II: scaling up (Series A,B)

“What Does Your Outcome Canvas Look Like?”, The Question From The Investment Team At Future Fund Oman Had Taken The Founders Aback. Outcome? Canvas?

In exploring a lead candidate for the Series D, it was clear that the conversations, the expectations and the strategic thinking was going to be a big step up from the conversations they had back at Series A. “Are you aiming to list in Riyadh, London or the US?”.

“Do you have the exit paths ready in your data room?”, the associate had asked over and over again. The truth was, they did not. Not yet.

Series C Led By PIF

Six months earlier.

“Another unicorn minted in MENA”, read the LinkedIn posts, as Leo Bank hit the coveted $1BN valuation mark.

The Series C had come together pretty quickly as well. Public Investment Fund had gotten introduced via the team at Wamda Capital. There was a clear strategic match, and PIF was incredibly supportive on backing a strong growth story.

PIF had proposed a $100M round or a mega $500M round, for 25% ownership. The $500M was simply too much capital, and the board decided to go for the $100M for 10%. There were some demanding terms, and it took a few weeks to negotiate out some of the most challenging terms, but they got it done.

Cap Table Post Series C, With PIF

Cap table post Series C, PIF’s team also corrected the new reality for Malik’s PPs, at $50,- effective

Market Expansion, Market Expansion

The new capital from PIF had been used for market expansion, both to strengthen the position across MENA as well as launching in key, new markets like Singapore, India and Pakistan. “Rest is not an option, we need to grow, grow, grow”, was the new mantra across the growth teams.

Dealing With Massive Scaling Challenges

“Being a seed company is easy, trying to scale is a whole different game”, Liz was getting worn down. Leading the new market expansion, she was the one spearheading all market- and revenue work.

Her role as CRO had taken on a whole new level of complexity. Managing 590 people, she realized she no longer could work the way she and her teams had so far. New structures, processes and procedures were needed, and needed fast. “At this pace, I am going to run into a brick wall”, she had shared with Adnan and Maheen during one of their 5 am morning runs.

Closing Series D With Future Fund Oman

The first introduction to Future Fund Oman had come through their board member from PIF, Omar. Having worked in multiple family offices and now in a senior investment role at PIF, he was deeply connected across the region. Future Fund Oman, was in Omar’s view, the perfect growth-stage investor for Leo Bank.

Over a series of meetings, Adnan and the team came to understand the methodology and investment process Future Fund Oman applied. The Outcome Canvas, or Outcome scenario analysis, or just sensitivity analysis, this was a must-have for the 12-person investment team at Future Fund Oman.

It took longer than expected, but finally both sides arrived at an Outcome assessment they could buy into. A mere 3% chance of achieving the Outperform scenario, it was a tall order for Adnan and the team to scale to become a top performing investment for FFO.

Future Fund Oman, in the end, signed onto the investment papers to lead both Series E and Series D, granted the company was able to hit the revenue milestones in the growth plan. “Of course, we’ll hit them”, Liz said as she put her team to work.

Outcome Canvas, for Leo Bank. In Scale Up MENA! Masterclasses participants learn to apply the Outcome Canvas and start working on crafting a strategy and narrative around investor returns.

Future Fund Oman was eager to do a $200M round at $2BN, then roll into another $200M @3BN, once the commercial milestones were hit.

Cap Table Post Series D With FFO

Cap table post Series D, PIF and FFO both with 9,1%, while Wamda still has the highest equity post at 9,6%.

Cap table post Series D with FFO coming in for the first round.

Cap Table Post Series E With FFO

With the Series E financing, taking the Leo Bank to $3,2BN post-money valuation, the increase in valuation and return multiple were really starting to kick in. While still completely unrealized gains, the early investors were looking at a 350X return – and still sizeable ownership in

“Leo has the potential to become one of the region’s breakout winners”, members of  the Dubai Angel Investor Network discussed in their annual investor summit.

Cap table post Series D with FFO taking the second round, for a total investment of $400M.

Post Series E, Future Fund Oman increase their stake to 14,8%, becoming the leading investor in Leo Bank.

Rebranding, Product Expansion

“It’s time to launch the next version of Leo”. The product team had worked on this for nearly nine months. The next version of the product roadmap was an ambitious step up. “So, so much more than just a bank. We are becoming the digital backbone for 100M people in MENA”, Basil, the new Chief Product Officer had stated. With backgrounds from Twitter and WhatsApp, he had seen what it took to develop scalable digital products that people loved.

“Also, with the new product launch, we are doing a rebrand. From now on, it will simply be Leo”, Maheen and Liz announced at the monthly all-hands meeting. Growing, with over 4.000 team members, the all hands were now more digital than ever, but also a key part of maintaining the team culture and cohesion as they grew at breakneck pace.

Exit Paths

“How do we create liquidity and exits for investors and founders?”, the question had been circulating in the finance team for some months now. It was the angels from DAN who had first brought it up. One of them, Sanjana Raheja had been an exceptionally active angel. As an active member of the ecosystem, Sanjana, or just San, had been coaching the team for months now. “I’d like to see some more non-obvious exit pathways that come in”, She had asked.

Using the GP Exit Paths, from Strategy Tools, San had provided the investment team with a simple, visual structure to start mapping out more exit paths. “Not all exits are exits”, San kept saying. “We need to think about investor liquidity throughout the founder’s journey, not just as a possible big bang in 5-10 years time”. San was a trusted advisor to both startups, scale ups and emerging fund managers, known for her depth and reflective thinking about creating new paths to liquidity in the region.

Under San’s guidance, and working with Michael at Golden Gate Ventures, the investment team developed the GP Exit Paths, taking the view of GGV. GGV was coming towards the end of their fund lifetime, and access to disciplined liquidity was becoming a thing.

GP Exit Paths, San and Michael worked with the finance team to map out possible paths to liquidity, seen through the lens of GGV

Thanks to San and Michael’s guidance, the finance team managed to get a clear understanding of what an investor like GGV was looking to achieve, and realizing that paths to liquidity was something they had to create, not just wait for.

Tackling Growth Pains, Leadership And Culture Issues

“I had not idea this would take so much of my attention”, Maheen was speaking with her performance coach. She had built Leo into a strong regional brand, with 4.500 employees, and millions of delighted users. But the cracks were starting to show.

Of the top 200 leaders in the company, few had ever scaled a company like this, this fast. Maheen had grown accustomed to focusing externally. “Strategic partnerships, investors, media; that’s been my focus. Now I am realizing my leadership bench is not what I hoped it would be. I am going to spend more time internally, developing the people and culture to carry us forward”, she said.

it was the regular monthly check-ins with Tiffany and Nader that had gotten her to think about the depth of leadership on the team. DFDF had a portfolio-support program, aimed at supporting the fastest growing, high potential companies across their direct and fund portfolios. With over 145 investments, only 5-6 founders got the Scale Coach support from Nader and Tiffany.

Earlier in her work, she had benefitted from the team at Misk Foundation. Now, as the company was working into the Series F, one of the few to ever happen in the region, strong leadership, rapid talent development and focus on culture across 24+ offices would be required. “You have built a rocket ship, but can you steer it?”, Nader had asked over a late dinner at 24th St. World Street Food

Series F – Led By Mubadala

“Mubadala is probably one of the most influential investors in the region. It will be a big win for us”. The board discussion had centered on the recently received term sheet from Mubadala Capital.

High-level terms sheet from one of the most sought after investors in the region. Used for training purposes in Scale Up MENA!

Mubadala Capital was proposing a multi-tier structure with the following highlights:

–          Direct equity $25M @2,5X mark up from last post-money valuation

–          Venture debt $20M, with 15% interest

–          Secondaries purchase of 10% equity from existing shareholders, with 25% discount

All told, the deal would value Leo at $7,5BN pre-money, and it would give Mubadala a 10,3% ownership post, making them the second largest shareholder after Future Fund Oman.

Interestingly, a key part of the transaction was how Mubadala structed the equity.

$25M would come in a direct investment. But $562M would be used to buy out shares from earlier investors, at a 25% discount, if they could find any takers for it. “Wow, that is both a challenge for us and a great opportunity for our investors to take some money of the table”, Adnan had said. “This is exactly the kind of opportunity I want to be able to present to our investors”, Maheen had said.

The Mubadala Secondaries Transaction

It took a few weeks to structure the transaction, but everyone had been supportive and wanted to help make it happen. “This is just too good to be true”, Liz’s older brother had blurted out when he realized the offer. He and his friends would be able to sell 6.000 shares, continue to hold on to 14.333 shares, and with the sale alone, they would cash out $90M.

Sure, he had expected, or rather hoped for a payout when they first invested in Leo, but nothing, nothing like this.

This deal also allowed for some of the very earliest employees, the ones that had been with Leo since the first year, to cash out some earnings. A total $22M went to stakeholders in the SPV.

“What Mubadala is doing here is superb. The ecosystem really needs more paths to liquidity”, Adnan said to his finance team  went they were structuring the secondaries.

Nine entities, including many early employees came together to meet the 10% secondaries requirements in Series F.

Cap Table Post Series F With Mubadala

With the combined direct and secondary transaction, for a total investment of $587M, Mubadala was coming in as the second largest shareholder, after Future Fund Oman. New in this round was the issue of another 8.000 shares in a new Team SPV, and a dedicated 1,1% equity incentive for the full management team.

Cap table post Series F. Notice the wide range of return multiples in the last column. Your entry price really matters.

With the updated cap table, Future Fund Oman and Mubadala would be the two largest shareholders, with 15% and 10,3%, respectively. The two investors had invested close to $1BN in direct, and secondary transactions.

Wamda Capital and PIF each held around 8% – 9%, but with very different entry prices, at 1.198 per share and 3.156 per share, respectively.

Collectively, the three remaining founders held exactly 20%, and another 0,8% as participants in the newly set up Management SPV.

In Conversations With Mubadala, The Investment Team Commended Them, “You’ve Really Managed To Structure A Clean And Balanced Cap Table. We Don’t See That Too Often. Well Done.”

Taking On Venture Debt At Scale

“We should really explore venture debt”, the finance team had been looking at more non-dilutive ways to finance the growth.

Oman Venture Financing Company had increasingly become the issuer of choice. In a series of meetings in Oman, the OVFC had emerged as a strategic partner that understood how to aggressively fund market expansion.

“We want to see more high-growth cases emerging out of the region, with the potential to go global”, the Investment Director had said during their discussions. The term sheet came together in a few weeks, where OVFC was willing to finance up to 8X ARR; but recommended capping the debt at 2X ARR. Ultimately, the finance team agreed to a low ARR ratio, with a debt of 600M. At 12%, it was an expensive solution, but the board agreed to the proposition, rather for doing a Series E. The terms were demanding, but the finance team had worked on multiple risk scenarios and were comfortable taking on the debt on said terms.

Venture debt should always be a part of your capital stack, just make sure to read the fine print and map out risks, scenarios and notably, worst case scenarios. Not sure the finance team did it well enough here. What do you think?

Negotiating On Incoming Acquisition Offers

Following the investment from Mubadala, it seemed like the entire world came knocking.

Over a period of 3 months, the board received no less than 8 initial acquisition offers. “Things have really changed for us”, Liz said in one of the pre-board meeting discussions. “Yes, but we are not selling, and not selling at any kind of low-end pricing”, Adnan had been clear on that. After all, he and the IR team had promised early investors outlier returns, and he felt a strong, personal desire to deliver on his promise.

Attractive exit options discussed at the board meeting

Yet, the board took the acquisition offers seriously, recognizing their fiduciary duty to shareholders. For the Q1 board meeting, four offers were looked at serious.

Microsoft was willing to acquire Leo for a 2,2X last valuation, which would take the company to a $16,6BN valuation. But, the deal was paid in Microsoft shares with a 2-year lock up. Nobody really felt good about that option.

Aramco, interestingly enough, was looking to invest into fintech as part of their wider diversification strategy. 2X last post would take the company past $15BN in exit value. Paid all cash, this was a very interesting deal for shareholder. “We are not looking to sell to an energy conglomerate”, Maheen was not interested in going down that route.

Gulf Capital had put in a very interesting proposition, at 1.5X last post, coming in at $11,3BN, but the term sheet revealed a massive debt for the company, effectively taking on more debt than the company could service under its current model. “We just can not recommend this”, Zara, head of risk management had stated.

Finally, First Abu Dhabi Bank had spent months meeting with the team, talking to customers, and probably done the most extensive due diligence by any of the potential acquirers. The M&A team positioned the acquisition as a strong merger amongst equals, looking at Leo as the platform the digital expansion for the Bank.

The team was enticed, and at 2.6X last post, the deal would come in at $19BN.  At a $47BN market cap, the deal would be a massive, strategic move by FADB. “Are we really ready to work with a big, established bank, or do we want to chart our own future?”, that was the question the board had discussed

Ultimately, The Board Had Turned Down All Four Aacquisition Offers.

“Give us a few months, let us show you what we can do”, Maheen had said. “My team is accelerating our revenue growth. Our journey is still just beginning”, Liz had followed on with. The board had agreed. “Let’s see where we go from here”, Maryam, Future Fund Oman’s board representative had agreed.

Charting A Strategic Path: Going Public On Tadawul

“Yes, yes, I know, we could choose to go for a Nasdaq listing”. The discussion had been going on for a couple of weeks already. As chairman of the board, James had helped the team really ask some fundamental questions around the path for the next stage of growth.

“You have really sound fundamentals, we can virtually guarantee a successful IPO in New York”, one of the investment banking teams had pitched.

They were right. By now Leo had amassed 16M users, forecasting to hit 40M users in 24 months. The trajectory was insane. Revenue, and notably the recurring part of the revenue mix was following a similar chart, taking Leo to $1.1BN revenue this year, and a target of $2.1BN revenue next year.

In Scale Up MENA! the IPO is one of the most valuable cards a team can get their hands on, but beware, it is complicated…..

“I know we could probably get a higher valuation in New York”, Maheen said. She had been flying between New York, Singapore, London and home non-stop for the past 8 weeks.

“But there is something deeper here. We are a product of the ecosystem. We would never have been here without the vast, extensive help and support we got along the founder’s journey. From the coaching sessions with DFDF, the workshops at Hub71, the angel connections at DAN and the mentors we got from the DIFC meetups. We are a product of the ecosystem, and I would like to make sure we are now finally in a position to give back to that ecosystem”, Liz had fully agreed, while parts of the board was still contemplating a NY IPO.

The board had run an investment bank beauty contest, inviting eight banks to pitch for the IPO process. The shortlist had come down to Goldman Sachs and a strong, local team in MENA, led by Emirates NBD Capital.

“Listen, when we set out to build Leo, we aspired to outperform Careem. We have achieved that. Now, we have the chance of really stepping it up one step further. Talabat was a marquee IPO for the region. We could choose to work with the same team, the team that listed Talabat. We could aim big and try to secure an IPO that would exceed Talabat”, Adnan had grown increasingly impressed with the local team, led by Emirates NBD Capital.

Ultimately, The Board Decision Was Clear. Leo Would Go For A Local LPO, Led By A Total Of 9 Investment Banks, Under The Guidance Of Emirates NDB Capital.

Listing Advisor: Emirates NBD Capital PSC acted as Listing Advisor

Joint Global Coordinators: Emirates NBD Capital PSC, J.P. Morgan Securities PLC, and Morgan Stanley & Co International PLC as joint global coordinators and joint bookrunners

Joint Bookrunners: Abu Dhabi Commercial Bank PJSC, Barclays Bank PLC, EFG-Hermes UAE Limited, First Abu Dhabi Bank PJSC, Goldman Sachs Bank Europe SE, ING Bank N.V., and UniCredit Bank GmbH as joint bookrunners

Legal Advisor: Linklaters

“This is exactly the same team that Talabat used, I have high expectations here”, Maheen had concluded with the board as the company and its line up of advisors started preparing to take Leo public.

Understanding Ultimate Ownership And The Impact On The Ecosystem

During one of their flights to Abu Dhabi, Adnan and Maheen had sketched out something interesting. It was a chart of the ultimate shareholders, owners, investors in Leo. “Our cap table is pretty easy, with 22 entities listed. But I’ve been thinking. In total we now have more than 4000 employees in our SPV’s, we have 24 angel investors from DAN, we have five VC funds, each with 20 – 250 limited partners behind them. By my account, we have more than 5000 people as direct or indirect owners in Leo, and that is not counting our larger funds”, he said.

“Imagine the impact on the region, on the ecosystem, when we go public. It has been a long, 7-year journey already, but this could have a massive impact on the ecosystem, and create a lot of wealth for the people that believed in us early, not to mention the early employees that have been with us since the early days.” , Adnan said as the plane was starting to descend on Abu Dhabi.

IPO Readiness

“Ok, there are still some requirements to sort through”. The team from Linklaters had prepared the legal brief for the team and board.

“30% free float and one-year lock up is easy. The challenge is how we choose to restructure the cap table, and ultimate ownership to meet the requirement of 200 unique shareholders at the time of listing”, the Managing Partner at Linklaters said. The legal team had worked on finalizing the paperwork alongside the Issuer team in Riyadh.

The Decision Had Been Made. Leo Was Going Public On Tadawul.

Roadshow And Valuation Multiples

In the roadshow materials, there was one key slide that had stood out.

How does Leo stack up vs. global peers?

At $2,1BN revenue and a $13,5 target IPO value, Leo got a 6.4X valuation-to-revenue multiple. Post IPO, with new equity in, Leo would be looking at a 9,3X multiple. “Leo will be one of the fastest growing fintechs to go public, and compared to Chime, Adyen and Revolut, there is still massive upside for new investors”, the team from Emirates Capital and Morgan Stanley had repeated in investor meetings.

That Slide Had Sealed The Decision For Most Cornerstone Investors In The LPO.

IPO Celebration

The founders during the IPO, the third biggest IPO ever in MENA

“Wow, what a day. Do you guys remember the first sketches we made back at the Starbucks at DIFC?”, Liz was euphoric. “It truly has been a journey”, Adnan smiled. They had grown the team to 5.000+ people, scaled to 35M users and well over two billion in revenue.

“But, remember, we are just getting started”, Maheen followed up.

The Team From Emirates Capital Had Been Clear. “Some People Call It An Exit. It Is Not. Going From A Privately Held Company To Becoming A Public Company Is Not An Exit. It Is A Transition. It’s A Step On Your Founder’s Journey.”

The decision had been made to raise $6BN in new equity at the IPO. The listing had been massively oversubscribed, indicating a strong demand for new tech companies in the region. PIF and Mubadala had been exceptionally helpful on the roadshow, often joining the management team on the road.

Based on market feedback, the valuation was set at $13,5BN at listing, outperforming the $10BN Talabat listing a few years earlier. “The biggest tech IPO this year”, Forbes Middle East plastered on the front page. Financial Times called Maheen “the rocket ship CEO, guiding the biggest listing in years”.

The $6BN raise at a $13,5BN valuation also passed the requirements of a 30% free float in the market.

“We are proud to give the public a chance to invest in Leo today. Since our launch we have tried to build and scale the bank of the future for the MENA region. At today’s IPO shows strong interest in the stock, but we are only just getting started. The best parts is still ahead of us”, Maheen said on CNN Market Watch with Becky Anderson.

CAP TABLE AT IPO

Based on Saudi Arabian listing requirements, a total of 30,7% of Leo’s shares were made available in a free float, or IPO pool. This would allow the company to raise $6BN and becoming the third largest IPOs ever in the Middle East, just behind Aramco and DEWA.

Cap table at IPO, raising $6BN, meeting the 30% free float requirement and setting the company up for the next growth phase. IPO is just one step on the journey.

“At A 1.240x Return, This Has Been One Of The Most Amazing Founder Journeys Ever, In Mena”, Having Backed Leo Since The Early Days, Shorooq Partners Were Delighted To Announce The Outcome For Their Limited Partners On An Update Call On The Same Day As The LPO. It Was A Huge Win For Their Fund.

“We are delighted to back the next generation of fund managers in the region, and the team at Shorooq has shown what is possible when we develop strong, outperforming GP teams in the region. We are not surprised to see, but wish to congratulate the entire team with this big win”, DFDF’s Mahmoud Ward said in a statement to the Wall Street Journal. DFDF stood to take home a 14x net DPI on the back of an excellent portfolio in Shorooq Fund IV.

Shorooq Partners, Golden Gate Ventures and Global Ventures, Monk Hill all secured a coveted Dragon in backing Leo. A Dragon, or a single deal, that ends up returning the whole fund, is about 4X as rare as securing a unicorn. For fund managers, it marks the entry into the global top league of VC investors.

One of the big winners in the IPO had been Wamda Capital. With their record $40M investment, at $300M valuation, many had said they were crazy, investing at far too high a valuation. “Many said the deal would never, ever return back much”, Wamda’s Managing Partner said on a podcast with MAGNiTT. “but, hey, we saw the potential, we believed in the team and we believe in the rapidly maturing ecosystem. Our $40M investment returned us 30X, for a total valuation of $1,2BN”.

“Dude, That’s The Stuff That Legends Are Made Of”, Philip Had Said On The Podcast.

PIF returned back 11X, but decided to stay on as a long-term investor, also taking a minor post at IPO, to indicate further backing of Leo. Looking back, Mubadala’s decision to do the $530M secondary was a genius stroke, as the investment secured a 2,4X return. Not bad for a late-stage deal.

Employees, now counting 5.000+, all made out very well with the Special purpose vehicles. After the IPO, 3,2% was owned by employees and management, with another 2,6% available to secure future talent in the ESOP.

“We are immensely proud to see homegrown talent choose to launch, scale and list in the region. This talented group could have chosen to build anywhere, but they choose MENA, and what a journey they have had. We are proud to be early backers and we are delighted to see the ripple effect of this success story in the region”, speaking at the annual MEVCA Investor Summit, Dubai Angel Network Chairman was delighted.

Dan Had Made More Than $611M, Off Of Their $500.000 Investment At Pre-seed. “we Got A 1.222X Return On The $500.000 We Invested. This Stands As One Of The Best Angel Investor Deals Ever, Fully On Par With The First Angel Investors Into Google And Ebay Back In The Days. Now, We Hope To See Many More Deals Like This, As The Leo Mafia Start Launching The Next Generation Of Start Ups Here. We Stand Ready To Invest.

Of course, the three remaining founders, Liz, Adnan and Maheen, each hit an equity valuation of $907M at IPO. With various management incentive programs, combined with strong upside potential in the stock, most analysts predicted this could rise to $1,5BN within the next 2 years, minting three new billionaires in the region. Lock-up and market expectations would mean this would not get liquidated to cash anytime soon, but generational wealth was being created in the MENA ecosystem.

Speaking as the opening keynote speaker at Dubai FinTech Summit, Maheen shared her thoughts on the future of Leo. “This truly was the result of the ecosystem coming together, maturing. When we started, we knew little beyond raising a few SAFE notes and a seed round. We got extensive help and support, coaching and mentoring. We secured great talent, we build a world-class board. But, in sum, we owe our success to the entire MENA ecosystem. We are truly coming of age, all of us. Looking ahead I believe the best is clearly yet to come”.

The End. For Now.

Make sure you also read part I: the early days (start up, seed): and part II: scaling up (Series A,B).

Did You Enjoy Leo’s Journey?

What did we get right? What is clearly wrong? Where would you have liked the team to go differently? Let us know in the comments.

Scale Up MENA! Launching In August 2025

In Scale Up MENA! you and your team members step into the shoes of a founder team in MENA, just like Liz, Maheen, Adnan and Malik.

You select amongst 30+ case companies. Your task: scale your new case company from an early idea to a successful exit, while also competing with 3 to 20+ other teams, all trying to outcompete and outrace you. Along the way, manage the nine building blocks Maheen identified early on, raise multiple rounds of financing, accelerate revenue velocity, scale with AI tools and try to outcompete the likes of Careem, Tabby and Talabat.

Along The Way, You Learn How To Read Term Sheets, Structure Investment Rounds, Develop Your Growth Strategy, Build Paths To Liquidity, Speak In Investor Outcome Terms And Complete An Exit Transaction – All Core Skills You Need To Scale Your Real-life Start Up

Globally, more than 3.500 founders, investors and ecosystem builders have mastered cap tables, growth strategy and exits with Scale Up! Now, for the first time, we are ready to launch a 100% MENA version.

Scale Up Mena! From Idea To Exit Is One Of The World’s Leading Methods To Accelerate A Startup’s Successful Growth Journey. The Scale Up Mena! Masterclass Is Designed To Help Founders Understand How To Lead Through The Founder’s Journey, From Idea To Ultimate Exit.

Handle early-strategy, product development, AI, SAFE notes, local accelerators, venture financing, market expansion, ARR growth, growth financing, market leadership and exit transaction – all based on real content from across the MENA region.

Launching August 2025. Learn more.