The CTO Show Brief: Issue 142

Author

Mehmet Gonullu
October 26, 2025

Welcome to Issue 142 of The CTO Show Brief!

The venture capital landscape is splitting in two: while global markets race to industrialize AI infrastructure, the MEA region is executing a diversified growth playbook — from AI-driven restaurant systems to electric mobility networks. Over $500M flowed into MEA startups this week, with UAE and Saudi Arabia cementing their roles as innovation anchors. Meanwhile, biotech’s resurgence is emerging as AI’s counterweight, as Big Pharma M&A and late-stage rounds renew confidence in hard science. The real question for investors: are we watching parallel innovation tracks—or the convergence of AI and life sciences into the next defining platform?

Whether you’re one of our 2,791 subscribers or a first-time reader—grab your coffee, and let’s dive into what’s shaping tech and venture this week!

 

 

MEA Tech & VC Roundup

The Middle East and Africa ecosystem deployed over $500 million across diverse verticals this period, demonstrating maturity beyond the typical fintech and e-commerce narratives that have dominated previous cycles.

Healthcare & Insurance Innovation

The insurtech and healthtech categories attracted significant institutional capital, signaling investor confidence in digitizing traditionally analog sectors. SehaTech (Egypt) closed $1.1 million in seed funding led by Ingressive Capital, bringing total funding to $2 million, with its AI-powered platform targeting health insurance administration inefficiencies and fraud detection across the region. TachyHealth (UAE) secured $5 million in Series A led by Saudi insurer Tawuniya, deploying AI-powered solutions to enhance operational efficiency and patient experiences through data-driven collaboration between hospitals and insurers. The thesis here is clear: low insurance penetration rates in emerging markets create greenfield opportunities for technology-first players who can solve trust and efficiency problems simultaneously.

Industrial AI & Automation

Gulf markets are aggressively deploying capital into AI applications for traditional industries. 1001 AI, dual-headquartered in London and Dubai, raised $9 million in seed funding from CIV, General Catalyst, and Lux Capital to build an AI-native operating system targeting aviation, logistics, construction, and oil & gas—inefficiencies that cost the Gulf region over $10 billion annually. TabSense (Saudi Arabia) attracted $5 million from Jasoor Ventures to launch the first AI Agentic Point of Sale system for multi-branch restaurants, currently serving over 1,000 clients across Saudi Arabia and Jordan. These deals reflect a sophisticated understanding that AI's highest ROI in the region comes from automating capital-intensive, labor-dependent operations rather than chasing consumer applications.

Enterprise & Workforce Infrastructure

The B2B infrastructure layer is maturing rapidly. Cercli (UAE) raised $12 million in Series A led by Picus Capital, achieving 10x revenue growth while processing over $100 million in payroll across 50 countries with its AI-native workforce management platform. The company is attacking the $5.8 billion MENA HR market with a direct challenge to legacy systems. KLIQ (Saudi Arabia) closed $2.25 million in seed funding from Sanabil Venture Studio to scale its AI-powered influencer marketing platform, offering intelligent creator discovery and automated contracting. This signals that the MEA market is ready for vertical SaaS that solves complex coordination problems.

Proptech & Urban Infrastructure

Real estate digitization is attracting both traditional development finance and strategic venture capital. Yakeey (Morocco) secured up to $7 million in Series A from the International Finance Corporation (IFC), operating as a digital marketplace that creates transparency in property transactions involving buyers, sellers, notaries, and banks. Arsann (Saudi Arabia) raised $26.7 million from Merak Capital to expand its IoT-enabled smart parking network across 270+ sites managing 10 million+ vehicles, directly supporting Vision 2030 Giga projects. The investment thesis combines technology with tangible infrastructure assets—a hybrid model that appeals to both venture and infrastructure funds.

Financial Inclusion at Scale

Nigeria's Moniepoint secured over $200 million in Series C led by Development Partners International's African Development Fund, with participation from LeapFrog Investments, Lightrock, Google's Africa Investment Fund, Visa, and IFC. As Nigeria's top payments platform serving over 10 million customers and processing $250 billion in annual payments annually, it has achieved unicorn-scale profitability—a critical milestone that validates the unit economics of serving MSMEs in frontier markets. This is the type of foundational infrastructure play that creates network effects and sustainable moats.

Mobility & Climate Tech

Spiro raised $100 million—the largest round for two-wheel electric transport in Africa—led by The Fund for Export Development in Africa. The company plans to scale to 100,000+ electric motorcycles by 2025 and expand its 1,200+ battery-swapping stations across Uganda, Kenya, and Nigeria. This addresses both the capital constraint (drivers can't afford electric vehicles) and infrastructure constraint (no charging network) simultaneously through a subscription model that shifts from CapEx to OpEx.

Emerging Verticals & Early-Stage Bets

Madica deployed up to $200,000 each in Tunisia's Anavid (AI-powered shoplifting detection via retail cameras) and Morocco's Hypeo AI (SaaS tool for automating influencer marketing), demonstrating continued appetite for seed-stage AI applications in North Africa. Astra Nova raised $48.3 million backed by Outlier Ventures and Gulf investors to expand creator platforms like TokenPlay AI and NovaToon Web3 webtoon, positioning the company in the AI-powered Web3 entertainment convergence.

Strategic Venture Studios & Ecosystem Building

Crescent Enterprises (UAE) announced a $68 million investment to scale CE-Creates, its sector-agnostic venture-building platform that combines patient capital with operational expertise—effectively institutionalizing the venture studio model at scale. Rwanda secured $17.5 million from the Bill & Melinda Gates Foundation to establish the Rwanda AI Scaling Hub under the Centre for the Fourth Industrial Revolution, becoming Africa's first regional AI hub with focus on health, agriculture, and education applications.

Key Takeaway: MEA is executing a pragmatic, infrastructure-first strategy that prioritizes B2B applications and foundational platforms over consumer plays—a marked departure from the consumer-focused playbooks that defined previous emerging market cycles.

Global Tech & VC Pulse

Global markets are experiencing a fascinating dual narrative: the industrial AI infrastructure buildout continues to absorb historic levels of capital, while biotech is emerging as the primary counter-cyclical safe haven for venture funds seeking defensible, non-speculative returns.

The Biotech Resurgence: M&A as Market Validation

Big Pharma is aggressively acquiring innovation through M&A, signaling renewed confidence in the sector's fundamentals. Bristol Myers Squibb's proposed $14.6 billion acquisition of Karuna Therapeutics and Johnson & Johnson's $13.1 billion deal for Intra-Cellular Therapies represent the largest biotech acquisitions in years. This activity is supported by consistent late-stage venture capital: Kailera Therapeutics closed a massive $600 million Series B for obesity treatments, while Electra Therapeutics secured $183 million in Series C for rare disease therapies. The sector's appeal is straightforward—progress driven by fundamental science, structured by clear FDA regulatory milestones, and validated by proven acquisition exits rather than speculative public market IPOs.

AI-Life Sciences Convergence: The Ultimate Application Layer

The intersection of AI and biotech is creating some of the most defensible companies in the current market. OpenEvidence, developing an AI tool for physicians at a reported $6 billion valuation, demonstrates that AI-enabled health tech represents one of the most compelling application layers being built today. Major enterprise software players like Salesforce are highlighting how agentic AI systems will redefine the entire life sciences value chain—from drug discovery to clinical trial management. This convergence offers VCs a rare opportunity: combining the capital efficiency of software with the defensible moats of hard science and regulatory approval pathways.

The Great Re-Platforming of Big Tech

Persistent layoffs at major technology companies are symptoms of a strategic pivot, not weakness. Tech giants are shedding talent and shuttering projects in mature businesses—legacy cloud services, consumer hardware, ad tech platforms—to fund the existential race in AI infrastructure and platform control. This "Great Re-Platforming" creates two significant market effects: First, it releases a pool of highly skilled engineers, product managers, and sales leaders into the startup ecosystem, providing early-stage companies access to talent previously locked within incumbents. Second, it creates market gaps in niche verticals that Big Tech is abandoning in pursuit of AI dominance—creating attack surfaces for focused startups.

The Infrastructure-Platform-Application Stack War

The current funding environment reflects a clear hierarchy of capital allocation. Massive capital is flowing into physical infrastructure—data centers, compute resources, energy systems—as the necessary precondition for the platform war over the AI user interface. The eventual winner of that interface war will control the primary distribution channel for the coming wave of agentic AI. This creates a winner-take-most dynamic where early platform leaders accumulate compounding advantages through data network effects and developer ecosystem lock-in.

GTM Operator's Take

1. Compute Access is Now a Strategic Weapon, Not an Operational Expense

For founders building AI-native products, securing long-term, cost-effective compute access must be prioritized at the same level as fundraising itself. The current shortage isn't temporary—it's structural. Tactical moves: Negotiate multi-year contracts with cloud providers at fixed rates before prices adjust to demand. Build inference cost into your unit economics from day one, not as an afterthought. Consider geographic arbitrage by deploying inference workloads in regions with excess capacity (UAE and Saudi data centers are aggressively pricing to attract AI workloads). For enterprise sales, build "inference cost pass-through" clauses into contracts to protect margins as usage scales.

2. The App Store Distribution Model is Dead—Build for AI Agents as Your Primary Distribution Channel

The paradigm shift is already happening: users will increasingly access services through AI agents rather than direct app downloads. Go-to-market strategy must adapt now. Immediate action items: Publish robust, well-documented APIs with clear pricing and authentication that AI agents can programmatically access. Optimize for LLM discoverability by creating structured data endpoints that agents can interpret without human configuration. Partner with emerging AI platforms (not just OpenAI—think Anthropic, Cohere, Perplexity) to become a preferred tool in their agent ecosystems. The critical question for your next board meeting: "If a user never opens our app but uses our service through an AI agent, do we have the infrastructure to capture and monetize that interaction?"

3. Capital Efficiency is No Longer Optional—It's Table Stakes

For non-AI companies, the bar for venture capital has reset to 2012 levels. Investors are demanding near-term paths to profitability and defensible moats that can't be commoditized by an LLM. Practical implementation: If you're burning more than $100K monthly and don't have clear line-of-sight to breakeven within 18 months, restructure now before the fundraising conversation starts. Cut features, not headcount—preserve talent while eliminating product bloat. Build "default alive" scenarios into your financial model where revenue growth covers burn without additional funding. For enterprise SaaS founders, this means prioritizing expansion revenue from existing customers over new logo acquisition, as the latter has become prohibitively expensive in the current market.

Key Takeaway: Success in the current market requires operators to simultaneously master three transitions: treating compute as a strategic asset, building for AI agent distribution channels, and achieving capital efficiency while the funding bar remains elevated. The winners will be operators who adapt their GTM playbooks to these structural shifts within 90 days, not 18 months.

 🎙️Episodes Recap:

In this episode of The CTO Show with Mehmet, host Mehmet Gonullu sits down with Pete Steege ⭕️, Founder of B2B Clarity and author of Radical Clarity. Pete helps “accidental CEOs” — technical experts who suddenly find themselves leading companies — move from chaos to focus by simplifying what matters most.

In this episode of The CTO Show with Mehmet, we sit down with Mark Vange , founder of Autom8ly and former CTO at Electronic Arts, to explore what he calls “cooperative AI.” Mark shares how decades of experience in gaming, enterprise software, and automation shaped his belief that the true power of AI lies not in replacing humans but in partnering with them.

In this episode, Mehmet Gonullu sits down with Carina Negreanu , CTO of Robin AI, to explore how artificial intelligence is reshaping the legal industry. From her roots in physics and machine learning to leading one of the most innovative legal tech companies, Carina shares how Robin AI is using AI to simplify contracts, enhance trust, and improve lawyer productivity. 

 

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📖 From Nowhere to Next

Every week I share startup lessons and stories through The CTO Show Brief. But if you want to go deeper, my book From Nowhere to Next brings together the experiences and insights that shaped my own journey.

Thanks for reading — and for being part of this growing, global-minded network.

 — Mehmet