MUSCAT, Oman’s Phaze Ventures has secured more than $40 million in commitments for two artificial intelligence and deeptech funds targeting over $75 million, seeking to expand international technology investments and finance domestic startups in a regional market where the UAE attracts the overwhelming majority of AI venture capital.
Announced on October 28, the funds have already invested more than $10 million across 10 companies. The $40 million represents investor commitments rather than completed investments, while the $75 million-plus target remains subject to further fundraising. Phaze has not disclosed the amount allocated to either fund or the share reserved for Omani businesses.
Phaze Ventures Fund II is backed by ITHCA Group, a subsidiary of Oman Investment Authority, alongside Ominvest and Oman LNG Development Foundation. It will invest in early-stage AI and deeptech companies internationally. The separate Phaze Ventures Oman Fund, anchored by Future Fund Oman, will finance domestic businesses developing AI-enabled products and services.
The structure combines access to global technology companies with a dedicated financing channel for Omani startups, which face a considerably smaller domestic market and limited opportunities to raise growth capital.
The regional funding imbalance illustrates the challenge. AI and AI-enabled startups raised $678 million across the Middle East and North Africa during the first half of 2026, up 81% year-on-year, according to MAGNiTT. Yet the UAE captured 93% of that capital across 28 of the region’s 53 AI investment transactions.
Despite the increase in funding, the number of regional AI deals fell from 121 to 53, indicating that more capital was concentrated in fewer companies. AI businesses accounted for half of all MENA venture funding but only a quarter of transactions.
For Oman, establishing a domestic investment vehicle could help address limited access to specialist capital. However, the regional figures also demonstrate that raising money for technology funds does not automatically produce a competitive startup ecosystem.
Phaze’s earlier investments provide evidence that Omani-linked businesses can expand internationally. Automotive technology company Carzaty entered the UAE before being acquired by Mexico-based Kavak, creating an exit opportunity for its investors. The acquisition price and Phaze’s realised return were not disclosed.
Since its establishment in 2018, Phaze has invested nearly $10 million cumulatively in technology companies based in Oman or founded by Omanis, according to co-founder Abdullah Al Shaksy in written responses to Oman Observer. That historical figure is separate from the more than $10 million deployed through the newly announced funds.
The new portfolio includes Arabic.AI, a developer of Arabic-language enterprise AI backed by Saudi Arabia’s HUMAIN, and healthcare technology company Sully.ai. An NVIDIA case study cited by Phaze reported that Sully.ai reduced inference costs by 90% and improved response times by 65% in medical workflows, suggesting potential commercial savings for healthcare providers.
Phaze also backed Andromeda Surgical before the robotic-surgery developer raised $15 million in a Series A round led by Standard Capital. The financing demonstrates access to follow-on institutional capital, although the $15 million represents Andromeda’s fundraising rather than Phaze’s individual investment.
The domestic challenge extends beyond financing. Al Shaksy told Oman Observer that investors assess whether startups have differentiated products, credible markets and the ability to expand. Access to customers and international distribution can therefore be as important as raising capital.
The new Oman-focused fund could help local companies develop AI applications for healthcare, energy, logistics and financial services, while international portfolio investments may provide access to specialised expertise and commercial partnerships.
But overseas investments do not necessarily generate domestic employment, technology ownership or export revenue. Those benefits would depend on Omani companies securing paying customers, developing commercially viable products and expanding into larger regional markets.
Early-stage AI investments also carry significant risks, including high development costs, uncertain adoption, regulatory requirements and repeated fundraising that can dilute existing shareholders. Phaze has not disclosed the new funds’ portfolio valuations, realised returns or expected investment timetable.
The immediate milestones will be the funds’ final closing, disclosure of capital allocated to Omani startups, follow-on financing for portfolio companies and evidence of sustained customer revenue or profitable exits.
For Oman, Phaze’s expansion offers a route into an AI investment market increasingly concentrated in larger Gulf economies. Its economic success will depend on whether international investment exposure translates into profitable returns and domestic companies capable of competing beyond the sultanate.
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