Saudi Defense Fund Steps Up Maritime Investment After Houthi Advance

Saudi Defense Fund Steps Up Maritime Investment After Houthi Advance

Saudi Arabia's first defence-focused venture capital fund, MASNA Ventures, is seeking to plough more money into local manufacturing of US and allied defence technology as conflict in the Gulf exposes the region's military gaps.

The fund, anchored by a prominent Saudi family office and sharia-compliant, has asked the Capital Markets Authority to raise its capacity to $150 million from $100 million, General Partner Lucien Zeigler told Reuters.

Committed capital so far includes only Saudi nationals, and the firm is weighing whether to bring in international capital, Zeigler said, declining to comment further on amounts or investors, citing regulations.

"This is a bet on Saudi sovereignty, and we want Saudis who believe in the sector sharing in the wins," he said.

The firm is speeding up collaboration with so-called Prime Original Equipment Manufacturers and startup unicorns "whose connected, autonomous platforms were designed for exactly what is happening in the Gulf and the Red Sea," Zeigler said.

He declined to name the companies, citing non-disclosure agreements. The Prime manufacturers term refers to major defence firms such as Lockheed Martin and Boeing.

MASNA's focus is on autonomous systems including unmanned aerial, surface and underwater vehicles.

"Maritime is absolutely a priority... we are actively accelerating that domain right now," Zeigler said.

Venture capital firms have invested $19.4 billion in defence tech globally this year, double last year's total, according to PitchBook. Saudi Arabia has recorded VC deals worth about $200 million in 2026, the data platform said.

Zeigler has spent most of the last 15 years working in the Kingdom with Saudi and US business, and in venture capital, defence, and investments. He previously headed Middle East and North Africa operations at Silicon Valley's Pilatus Venture Capital.

MASNA has partnered with SR2 Defence Systems, a local manufacturer that Zeigler co-founded, to develop advanced defence technology on Saudi soil.

The fund is targeting three operational joint ventures and six capital investments in 2026.

It has already backed a joint venture between SR2 and US drone maker Vector Defense that is "ramping up now," with MASNA leading a funding round that is three times oversubscribed, Zeigler said. The firm also plans to back another joint venture producing anti-drone systems built around "world-leading US hard-kill technology."

Drones have played a central role in the Houthi campaign in Yemen and the broader Gulf conflict involving Iran, the United States and their allies. Saudi Arabia was hit by strikes from Iran-backed groups in recent weeks that threatened its oil exports, while a new Houthi presence near the Bab el-Mandeb strait risks further disrupting Red Sea shipping routes.

"Right now, it is drones and aerial defence above all else," Zeigler said. "The events of this past week emphasize those needs."

(Reuters - Reporting by Nazih Osseiran; Editing by Andrew Cawthorne)