Investment activity in the Middle East region is continuing, although the focus of conversations is evolving. Periods of uncertainty rarely bring transactions to a stop, but they do make investors more selective and more attentive to how risk is managed in the documents.
Deals are moving but more slowly
Transactions are taking longer to close and due diligence exercises are becoming more detailed. Investors are focusing on liquidity, contractual exposure and the resilience of revenues. When pricing is difficult to fix, there is understandable reluctance to settle valuation too early on assumptions that may change within a short period. The question is less about whether a deal should proceed and more about whether the structure can absorb delay, underperformance or a revised pricing discussion without unsettling the transaction.
Interim structures gaining ground
In this environment, interim tools such as bridge financing and convertible instruments, including Simple Agreement for Future Equity (SAFE) notes and convertible loan notes, are attracting greater interest. These allow investors and founders to progress discussions while deferring valuation until there is clearer market visibility.
Term sheets under closer scrutiny
Term sheets are becoming more conditional. Material adverse change provisions, long-stop dates, termination rights and conditions precedent are receiving closer attention. It is increasingly common for valuation to be revisited mid-process, particularly where timelines extend or operating conditions shift.
Sharper due diligence
Due diligence is becoming more focused. Investors are concentrating on the factors that most directly influence value or enforcement risk, including liquidity, contractual exposure, governance and the reliability of financial information.
Balancing protection and commercial intent
The priority for investors is ensuring that the documents deal properly with pricing uncertainty, timing risk and protection rights while staying aligned with the commercial objective of the transaction. Flexibility in deal terms, careful calibration of risk allocation and thoughtful use of interim structures all play a part. Active portfolio management also remains important as investors continue to support existing assets alongside new opportunities.
A market that adapts quickly
Venture capital (VC) markets respond quickly to changing conditions. Opportunities continue to arise where pressure points are identified early, and structures are approached with clarity. With the right preparation and clear legal guidance, transactions can continue to move forward with confidence.