Saudi VC fund to localise defence manufacturing

• Masna Ventures Fund I worth $100m
• First of its kind in the kingdom
• Localisation of sector reaches 25%

A new $100 million venture fund aimed at localising defence manufacturing in Saudi Arabia is pitching to attract the attention of investors from across the kingdom, the US and Europe.

The Masna Ventures Fund I, the first of its kind in Saudi Arabia, is focused on institutionalising private capital around the country’s defence manufacturing sector.

“What’s become clearer since launch is the speed and breadth of engagement across both capital providers and technology companies,” Lucien Zeigler, co-founder of the fund, told AGBI.

American entrepreneur Zeigler is CEO of Redsalt Defence and its US-Saudi joint venture SR Advanced Strategic Systems (SR2), while his business partner Nehal Farooqui is head of device services company Benson Technologies.

The kingdom plans to localise half of its defence manufacturing by 2030.

Speaking at the World Defense Show in Riyadh this week, Ahmad Al-Ohali, governor of the General Authority for Military Industries, said the country had achieved almost 25 percent localisation by the end of 2024 and was on track to meet the target by the end of the decade.

“There’s a clear recognition that Saudi Arabia is moving from procurement toward production, and investors want exposure to that transition through an institutional structure rather than through one-off transactions,” said Zeigler.

With a plan to back US and allied defence-tech companies to set up manufacturing operations in Saudi Arabia, the Masna fund will focus investments in unmanned aerial vehicles, aerospace, counter-drone technology, automated systems, AI-enabled defence systems and maritime.

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Saudi Arabia has long been an attractive but complex market for US defence startups and mid-sized companies, where scale, local infrastructure and a firm grasp of localisation and regulatory requirements have often been prerequisites for entry, Zeigler said.

“On the technology side, [the fund] supports companies looking for a credible pathway into Saudi manufacturing without having to build everything from scratch.”

Saudi Arabia allocated $78 billion to defence in 2024, making it the fifth largest country in the world and first in the Arab world in terms of military spending.