Nuwa Capital’s Sarah Abu Risheh On Why Funding Stages in The MENA Don’t Always Tell The Full Story
"What we really need is a vocabulary based on business milestones rather than legacy stage names. That would better reflect the maturity and growth we’re seeing in the region.”
Having co-founded Nuwa Capital in 2020, Sarah Abu Risheh is today a Partner at the UAE-based early-stage venture capital firm known for backing companies from pre-seed to Series A across three core areas: brand-led consumer companies, fintech infrastructure, and software with global potential. “We also lean into horizontal themes like artificial intelligence (AI)-native and AI-enabled models,” Abu Risheh adds. “We’re not entirely industry-agnostic—we prioritize business models aligned with regional macro trends—modernizing the private sector, unlocking capital, or shaping consumer culture—while always being guided by our fundamentals and complete conviction from the team over hype.”
According to Abu Risheh, as the startup ecosystem in the MENA has evolved, so have interpretations of investment rounds. “The lines between funding stages in the MENA have become increasingly blurred,” she tells Inc. Arabia. “A few years ago, early-stage rounds in the region were typically under US$1 million. Today, that’s shifted significantly—$1 million to $5 million rounds have become the norm, reflecting a more mature ecosystem and greater investor appetite. Founders are raising larger rounds earlier to extend runway, accelerate growth, and attract talent before competition catches up.”
These shifts have also shaped the way Nuwa Capital assesses startups. “In a pre-seed, we’re evaluating the strength of the founding team, clarity of the insight, and whether there’s a compelling wedge into the market,” Abu Risheh explains. “By Series A, we’re focused on traction—repeatable customer acquisition, early signs of unit economics, and a clear path to scale. In fast-moving verticals like AI, where product build times are compressed, we place a higher bar on defensibility, proprietary tech, and depth of the founding team’s domain knowledge.”
But even as Nuwa Capital applies criteria like these, Abu Risheh argues that the names attached to funding stages are losing relevance. “The traditional labels are increasingly disconnected from how rounds function these days,” she notes. “What’s typically called a seed round in the US might look more like a Series A in the MENA in terms of traction, team size, and round size. What we really need is a vocabulary based on business milestones rather than legacy stage names. That would better reflect the maturity and growth we’re seeing in the region.”
The implications go beyond semantics, though—blurred definitions can shape how founders pace their fundraising. “It’s not yet a widespread trend in the region for companies to jump rounds, but it could start to see more of it, especially as ambitions for initial public offerings (IPOs) rise and the funding landscape continues to globalize,” Abu Risheh notes. “We do see companies raise oversized rounds or skip traditional stages, especially those with strong fundamentals in high-growth sectors like fintech or AI. The upside is obvious: capital efficiency, extended runway, and greater speed to market. But the risk is that a company outpaces its organizational maturity, and it can’t grow into its valuation. Scaling before product-market fit or team cohesion can create structural cracks that are hard to fix later.”
When it comes to exit strategies, Abu Risheh notes that while mergers and acquisitions (M&A) remain the most common path for startups in the region, IPOs are starting to gain traction—particularly in Saudi Arabia. “Historically, most exits in the MENA—about 80 percent—have come through M&A,” she says. “IPOs were the exception, not the norm, largely due to underdeveloped capital markets and regulatory hurdles. But that’s changing fast, especially in Saudi Arabia. We’re now seeing a clear shift: more founders and investors are viewing IPOs as a viable exit path rather than a distant aspiration. Improved regulatory frameworks, growing institutional interest, and stronger company fundamentals are making IPOs more accessible. As a result, while M&A still dominates today, Saudi Arabia is leading the way in maturing the IPO landscape in the region—and we expect more startups to follow that path in the coming years.”
But even as the region’s funding landscape matures, Abu Risheh is quick to point out that the fundamentals of building a successful business in the region remain the same, no matter the label on a round, or the pathway to exit. “Build like you’ll never raise again, but structure like you will,” she says. “The best founders are laser-focused on operational efficiency and customer value, while keeping optionality alive for future rounds. That means setting clear internal milestones, tracking core metrics, and staying investor-ready—even when not actively fundraising. Also, stay close to your earliest believers. At Nuwa, we back our winners across multiple rounds, often preempting follow-ons. That kind of trust and alignment doesn’t just happen during a pitch—it’s built throughout the journey."
Fundraising Fumbles: Sarah Abu Risheh On What Not To Do When Chasing Capital
“One of the most common mistakes we see is misjudging timing—either going out too early without enough traction, or too late after burning cash without a plan. Another is focusing too much on storytelling, and not enough on metrics. We respect vision, but we invest on fundamentals. Founders also sometimes over-index on valuation, chasing the highest headline number rather than the best partner. Our advice? Fundraising is a means to an end—optimize for alignment and long-term support, not just capital.”
Pictured in the lead image is Sarah Abu Risheh, co-founder and Partner at Nuwa Capital. Courtesy of Nuwa Capital.
This article first appeared in the September 2025 issue of Inc. Arabia. To read the full issue online, click here.
