The Dubai-based early-stage investor has made Lisbon its first European base, and plans to back AI-native start-ups in hubs such as Madrid, London, Paris and Berlin.

Image: BY Venture Partners press photo, via Tech.eu.

BY Venture Partners, an early-stage venture capital firm headquartered in Dubai, has closed its third fund at $60 million (about €53.5 million) and opened its first European office in Lisbon. Fund III takes the firm's assets under management to more than $200 million.

The fund is anchored by the Dubai Future District Fund (DFDF), with participation from regional institutional investors, corporate venture arms and family offices including Multi Lane, Transmed Capital and the Idriss Family Office of Saudi Arabia, according to the firm's announcement.

AI-native, global from day one

Fund III will mainly write cheques of up to $1 million from pre-seed to Series A. It targets AI-native companies that "reimagine enterprise workflows" and aim to scale internationally from the start. The firm distinguishes these from software businesses that add AI features to existing products. It has already made 15 investments from the fund, out of a planned portfolio of about 40, including post-quantum cryptography company PQShield, Cosyne, Isometric, Huspy and Invisible.

BY Venture Partners says it invests in more than 16 markets and has deployed about two-thirds of its capital outside the Middle East and North Africa, mainly in North America and Europe. Earlier funds backed European companies including identity verification firm Onfido and SalesApe.

"We are particularly excited to invest more across Europe, where hubs such as Madrid, London, Paris and Berlin are driving rapid advances in AI-native software," said founding partner Ghaith Yafi.

A Lisbon hub with local hires

The Lisbon office opens with two local investment hires. It will support the firm's activity in Spain, the UK, France and Germany. Portuguese business daily Jornal Económico describes it as the firm's European headquarters, and Forbes Spain reports that it will act as a base for southern Europe, with Spain a priority market.

"Europe is producing some of the world's most formidable technical talent, but European founders often face a barrier when bridging the gap to international capital and global commercial scale," said partner Sohrab Jahanbani. He added: "Our goal is to give ambitious European founders direct access to global networks, cross-border deployment opportunities, and an operator-led team that knows how to build across international markets."

The firm was founded by repeat entrepreneurs Ghaith Yafi, Abdallah Yafi, Rami Jisr and Sohrab Jahanbani, who all built and sold businesses before turning to investing. BY says its first two funds produced four unicorns.

Why it matters

Gulf capital is becoming a steady presence at the earliest stages of European tech, not only in large growth rounds. A Dubai-anchored fund putting a team on the ground in Lisbon adds another source of pre-seed and seed money for AI start-ups in southern Europe, a region that has historically had less local venture capital than London, Paris or Berlin. It also points to Lisbon's growing pull as a base for international investors. At up to $1 million per company, though, BY is a seed-stage partner, not a source of scale-up capital.

Sources

• BY Venture Partners announcement, 29 October 2026, as reported by Tech.eu
• IT Brief UK / CFOtech, 30 October 2026
• Jornal Económico (Portugal) and Forbes España, October 2026