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Far-right ideologue’s secret meetings with Alternative for Germany politicians and benefactors have caused uproar

For decades the political consensus in Germany, where the horrors of the Nazi past still weigh heavily, has held that extremist rightwing ideologies would never again become popular enough to succeed at the ballot box. 

Events over the past week, however, have thrown that into question. 

A meeting between senior figures in the far-right Alternative for Germany party — which has won the support of nearly one in four Germans, according to polls — and Martin Sellner, an Austrian extremist ideologue barred from the UK and the US on public safety grounds, have scandalised Germany’s political class and sent the country’s media into a tailspin. 

At the meeting first reported by the investigative news outlet Correctiv, AfD politicians and wealthy benefactors discussed mass deportations and other incendiary ideas with Sellner at an elegant lakeside villa, the Landhaus Adlon, in Berlin in November. Many see the meeting as a Rubicon: the AfD, they say, is radicalising, even as political support for it grows.

Alice Weidel, the AfD’s leader, has fired her closest adviser, who was in attendance. But that has not stopped the backlash. Rallies have been held all over Germany, with tens of thousands of people turning out in cities across the country to “march against fascism, old and new”. Calls to ban the AfD outright are now being made at the highest levels. 

Sellner is an unlikely threat to the German republic: a modish 35-year-old with a modest but ardent social media following, an enthusiasm for rap, a neo-Nazi past, and no actual political party, let alone jackbooted heavies, behind him.

He believes that societies are degraded by too much cultural mixing, and that unchecked multiculturalism is behind many of modern Europe’s problems.

Sellner’s signature proposal is “remigration”, which he says stands for forcibly removing immigrants who break the law or “refuse to integrate”, regardless of their citizenship status. Critics say it amounts to ethnic cleansing.

His oeuvre comprises niche political books, heavy with references to philosopher Martin Heidegger and lesser, more controversial idols of proto-fascist thought, such as Oswald Spengler and Carl Schmitt.

For those paying close attention, the young Austrian has for years been an unavoidable figure on the far-right activist scene in German-speaking Europe. And despite condemnation in the media, court-cases and government bans — he was barred from the UK in 2018 and the US in 2019 — his reach has only seemed to grow.

Natascha Strobl, a political scientist and longtime follower of the Austrian and the Identitarian activist movement for which he was once the spokesperson, said: “In one sense, Sellner and the Identitarians are an extreme fringe.”

But, she added, “Sellner has also been very successful. He understands well how to drive a media frenzy and how to get his ideas noticed.”

“The meeting [at Landhaus Adlon] was certainly not harmless,” Strobl said. “When you have someone like Sellner, openly networking with senior AfD politicians and managers and business people . . . that signifies something has changed.”

Sellner, who grew up in a comfortably middle-class household, fell into neo-Nazism as a teenager in the quiet town of Baden bei Wien, just outside the Austrian capital. His early beliefs were coloured significantly by Holocaust deniers in Austria and abroad.

At 17, Sellner was caught with a friend sticking a swastika on the local synagogue, along with the phrase “legalise it”. The two teens had been angered by the conviction of British historian David Irving for denying the existence of the Holocaust that year, according to a police record of their arrest.

At university, he studied philosophy and joined an extremist fraternity, Burschenschaft Olympia, which espoused more nuanced views and led him to distance himself from what he called the “youthful sin” of his crude Nazi sympathies.

Sellner and “new right” groups such as the Identitarians draw a distinction between their beliefs and neo-Nazism in claiming they make no judgments about the superiority of any race over another, though critics question their sincerity.

Sellner abandoned a law degree for what he considered his calling: politics. 

In 2012, he became a founding member of the Austrian Identitarian Movement, a new far-right nationalist group heavily influenced by France’s “Bloc Identitaire” and Italy’s neo-fascist movement “CasaPound”.

Like them, it sought to borrow from the techniques and actions of left-wing movements like Greenpeace. Sellner continues to cite Gene Sharp, the American political scientist whose theory of non-violent resistance underpins most modern liberal and leftwing protest groups, as one of his biggest political influences.

The Identitarians, under Sellner’s careful choreography, gained media time with stunts such as scaling the Brandenburg gate in Berlin in 2016 to unfurl a huge banner calling for “secure borders”, capitalising on growing anti-immigrant sentiment.

In 2019, he married Brittany Pettibone, a Californian alt-right YouTube influencer.

Sellner was revealed to have been the recipient of a €1,500 donation from the New Zealand white supremacist Brenton Tarrant, who went on a rampage in March of 2019, killing 51 people at two mosques in Christchurch. Austria’s government initiated court proceedings against the Identitarians, accelerating the dissipation of the movement. Even the country’s hard-right Freedom party (FPÖ) turned against him.

During the Covid-19 pandemic, Sellner branched out into anti-lockdown and anti-vaccine messaging that fed the FPÖ and AfD discourse.

As the two populist parties have themselves grown more radical amid a cost of living crisis and the lingering social effects of the pandemic, Sellner’s cachet has risen. At the Landhaus Adlon, he was the star turn — and so was his “remigration” concept.

He argues this idea is backed privately by many Austrians and Germans who cannot voice public support for it, given their countries’ history.

The AfD itself champions aggressive measures to reduce immigration and supports the expulsion of convicted criminals and people with no legal right to stay, but has sought to distance itself from Sellner’s position. Weidel claimed the meeting at the Landhaus Adlon had nothing to do with her.

But many already detect the growing influence of new right ideas on the party — and note how much of Sellner’s language and concepts seem to be seeping into the party’s programme.

For now, the German furore appears to have served him well.

Hours after Correctiv published its story, Sellner mocked the media for sensationalising a meeting which according to him was not secret at all. He has also used the buzz generated around his name to promote his works, including his book Remigration — a proposal. A jury of German linguists said remigration was the “non-word” of the year 2023, saying it was used as a euphemism by right-wing parties.

“One of Sellner’s main ideas is that in order to be able to do something, you have to make it sayable,” said Bernhard Weidinger, a senior researcher of rightwing movements at the Documentation Centre of Austrian Resistance, a historical research institute in Vienna.

“‘Remigration’ is an example of how Sellner has played an important role in modernising far-right discourse. It’s about getting these terms, these narratives, these framings across to a broader audience. Or getting them into the public consciousness.”

The Islamic republic’s direct strikes in Iraq, Syria and Pakistan in recent days suggest not a change of strategy but a change of tactics

The first sign that Iran felt the need to flex its muscles more directly after months of tension and hostility across the Middle East came when its naval forces last week dropped from a helicopter to seize an oil tanker off the coast of Oman.

Days later, it was the turn of the elite Revolutionary Guards to deliver a glimpse of their military capabilities. The guards lit up the night sky over Erbil in northern Iraq after launching a barrage of ballistic missiles at what Iran described as an Israeli “espionage centre”.

The Biden administration condemned the attack — which reportedly rattled the nearby US consulate — as “reckless”.

However, in Tehran, these actions were interpreted as part of the Islamic republic’s calculated response to Israel’s more than 100-day offensive in Gaza. The display of force was intended to send a warning message to the US, Israel and other regional powers, but conducted in a targeted manner, far from the front lines of the Israel-Hamas war.

“The series of attacks are definitely related to the war on Gaza and are Iran’s show of power as the sole and leading military power standing against Israel,” says Saeed Laylaz, an Iranian analyst.

The assaults were the first time Iran has directly unleashed its military since Hamas’s October 7 attack triggered the war with Israel, sending shockwaves across the Middle East.

From the outset, there were concerns in Israel, its western allies and among Arab states about how Iran and the myriad militant groups it backs might respond. Days after Hamas’s attack, US President Joe Biden warned Iran “to be careful”, before dispatching two carrier strike groups to the region as a deterrent.

In the months since, Iran’s leaders have chastised Israel and expressed support for Hamas, but have publicly stated their desire to avoid a regional conflict, and kept their forces out of the fray. The regime was content for its so-called Axis of Resistance, which includes militant groups in Lebanon, Syria, Iraq and Yemen, to lead the military response, launching missile, drone and rocket attacks against Israel, US forces in the region and global shipping.

Yet a series of hostile acts over the past three weeks, directed at Iranians as well as senior leaders of the republic’s proxies, appear to have compelled Iran to up the ante.

The first was an Israeli air strike in Syria that killed a senior Revolutionary Guards commander at the end of December. The following week, another Israeli strike killed Saleh al-Arouri, Hamas’s deputy political leader, in southern Beirut, a stronghold of Hizbollah, the Lebanese Shia militant movement that is Iran’s most powerful proxy.

On January 3, the next day, two suicide bombers killed almost 100 Iranians who had gathered in the southern city of Kerman to mark the anniversary of the US’s assassination of Qassem Soleimani, the republic’s most powerful commander. Sunni jihadist group Isis claimed responsibility for the attack, but only after Revolutionary Guards commanders suggested Israel was to blame.

Next, a US strike in Baghdad killed a senior commander of an Iranian-backed Iraqi militia, dealing another blow to the Axis of Resistance.

It was then that Iran began striking out directly. The guards described its attack on Erbil as a response to the “recent atrocities of the Zionist regime” as well as the killing of commanders of the guards and “resistance”.

Iran simultaneously launched missiles against Isis targets in Syria, in retaliation for the suicide bombings in Kerman. This week, it mounted a rare strike in Pakistan, targeting Jaish ul-Adl, another Sunni militant group. Islamabad responded with missile attacks against Pakistani separatists in Iran.

An Iranian official says Iran’s strikes do not represent a change in strategy but a change in tactics to make the US and Israel aware of the threat it could pose as long as the war in Gaza continues.

“Involving Pakistan and Erbil sends a message directly to the Israelis and the Americans, and the message is ‘don’t mess with Iran, and finish the war in Gaza’,” the official says. “Iran doesn’t want a direct war with Israel and the US. But we want to be seen and felt by the Americans — and show how nasty we could be.”

The strategy isn’t without risk, the official adds, but hardliners inside Iran believe the damage can be controlled. “From their perspective, a limited, calculated engagement could [also] give the message to Iran’s proxies that in hard times we are supporting them.”

Since its devastating 1980s war with Iraq, the Islamic regime has made proxies and asymmetrical warfare an integral part of its national security strategy, cognisant that it lacks the conventional weapons to match the US or Israel.

That network, which began with the birth of Hizbollah in the 1980s, has expanded over the past two decades as the 2003 US-led invasion of Iraq and the tumult triggered by the 2011 Arab uprisings reshaped the region’s dynamics.

United by an anti-US, anti-Israel ideology, the grouping has come to incorporate powerful Shia factions in Iraq; militias in Syria, where Iran intervened to back the Assad regime in that country’s civil conflict; Hamas; and Houthi rebels in Yemen, which have fought a nine-year war against an Arab coalition led by Saudi Arabia, Iran’s regional rival.

Each has responded militarily to Israel’s offensive in Gaza: Hizbollah has been locked in daily cross-border clashes with Israel; the Houthis have launched more than 30 attacks against merchant ships in the Red Sea, as well as drones and missiles at the Israeli port of Eilat; and Iraqi militants have fired more than 140 missiles and drones against US forces in Iraq and Syria.

Tehran publicly insists the militants are acting independently, but by opening multiple fronts, their actions have enabled Iranian leaders to project power and hostility to Israel, while distancing the republic itself from direct combat and reducing the risks of it being sucked into a broader conflict.

US officials, meanwhile, accuse the Iranians of being “deeply involved” in planning the Houthis’ assaults against shipping, saying they have provided drones and “tactical intelligence” to the group. Iran has long provided financial and military support to militants from Hizbollah and to Iraqi factions collectively grouped under the umbrella of the Popular Mobilisation Forces, or Hashd al-Shaabi.

“Iran is the head of the octopus and you see its tentacles all around from the Houthis to Hizbollah to Hamas,” Israeli Prime Minister Benjamin Netanyahu told reporters in Tel Aviv on Thursday.

Hamid-Reza Taraghi, a hardline Iranian politician, boasts that the post-October 7 hostilities have provided a “good military drill” for the axis.

“There is today more unity and co-ordination between the different groups of the Axis of Resistance and they help each other, putting their lives at risk to defend their co-fighters in different places,” he says. “The reason is they all follow one leader, Ayatollah [Ali] Khamenei.”

Iran’s President Ebrahim Raisi talks to a person injured in the Isis attack in Kerman. The jihadist group claimed responsibility for the attack, but only after Revolutionary Guards’ commanders blamed Israel © Iran’s Presidency/WANA/Handout/Reuters

Khamenei himself, Iran’s supreme leader, said this month the “resistance must keep its strength up and be ready, not falling for the enemy’s tricks, and, God willing, wherever possible, deliver a blow”.

Yet the groups within the axis are not homogenous, and each has their own national agenda. Hizbollah and the leaders of the Shia Iraqi factions have the strongest ties to Tehran. Hamas is a Sunni Islamist movement, while the Houthis, members of the Zaydi Shia sect, are less ideologically aligned with Iran than other groups. But their relationship with the republic has deepened after years fighting the Saudi-led coalition from their base in northern Yemen.

In recent months, the Houthis have been one of the most active members of the network, displaying their strategic value to Iran as they have severely disrupted global trade through the Red Sea and drawn the US and UK into combat. But the true extent of Iranian influence over the group is often debated.

Indeed, some in western capitals question how effectively Iran is navigating the crisis. “Iran hasn’t been the brilliant mastermind some perceive that is operating with a clear strategy, concrete objectives and clever manoeuvring,” says Ali Vaez, an Iran expert at Crisis Group. “A lot of its actions seem reactive, scrambling, short-sighted and impetuous.”

Contrary to what Iranian leaders say, he adds, the strikes against commanders in the guards, Hizbollah and the Iraqi militia have diminished Iran’s efforts to project regional deterrence through the axis, and put it “on the back foot”. His concern is that Tehran will turn to another avenue to up the stakes with the US — its nuclear programme.

Before the Israel-Hamas war broke out, there were tentative signs of movement in the west’s stand-off with Iran over its nuclear ambitions.

In September, the Biden administration and the republic agreed to a prisoner swap, which involved Washington unfreezing $6bn of Iran’s oil money. Alongside that deal, the parties discussed unwritten de-escalatory measures, including Tehran putting a cap on its aggressive nuclear expansion as it enriched uranium close to weapons grade. There had been signs that Iran was slowing the pace at which it was producing highly enriched uranium.

But the conflict dashed hopes of progress. Instead, a December report by the International Atomic Energy Agency said Tehran had increased its rate of production of uranium enriched up to 60 per cent purity — close to weapons grade — to levels reported in the first half of 2023. “I’m afraid Iran’s nuclear calculus could change, and in very problematic ways,” Vaez says.

The Iranian official says the increased enrichment was a message to the Biden administration after Washington informed Tehran that it would not discuss the nuclear issue until after the US election. “If America wants to wait, they should suffer the consequences, and the consequences are going to be increasing enrichment,” the official says.

A consequence neither side wants, however, is military escalation. The US and Iran are relying on back channels through states such as Qatar to try to prevent that outcome. Biden has also publicly stated he has sent warnings to Tehran, most recently cautioning it not to aid the Houthis.

Sanam Vakil, Middle East programme director at Chatham House, believes the regime will continue to be restrained because of its ultimate goal: self-preservation.

“Iran’s number one priority is Iran, and we should never forget that. Iran will not mobilise its own forces unless it is directly hit,” she says. “It isn’t this sort of mammoth, behemoth puppet master behind the scene, but actually also tactical and it has weaknesses — and the ability to be deterred.”

Instead, it will continue to rely on its proxy network to project power. “It has a forward defence strategy that it has put into place and has tried to push its perceived threats far away from its borders,” Vakil says. “But it’s important not to oversell Iran’s position in the region or its investments in the Axis of Resistance.”

A critical question, however, is whether the calculus in Tehran changes if a full-blown war erupts between Israel and Hizbollah — the proxy it has invested most heavily in, and which some see as indispensable to its patron.

“Hizbollah is not Hamas — Hizbollah is the Islamic Republic of Iran,” says the Iranian official.

Quantinuum locked up a fresh $300 million equity fundraise at a pre-money valuation of $5 billion.

The new funding was led by JPMorgan Chase, with additional participation from Mitsui & Co., Amgen and Honeywell, which remains the company’s majority shareholder.

The Broomfield, Colorado-based company was spun out of Honeywell in 2021 and merged with Cambridge Quantum Computing. Quantinuum says it has now raised approximately $625 million.

“Financial services has been identified as one of the first industries that will benefit from quantum technologies,” said Lori Beer, global chief information officer at JPMorgan Chase, in a release. “As such, we have been investing in quantum research and our team of experts … have made groundbreaking discoveries, partnering with quantum computing leaders like Quantinuum.”

Seeing the potential

Investors have started to push more cash into quantum technology and computing — a level of computation much faster and at a level superior to modern computers in that it can perform many calculations at the same time — as its long-held promise seems to be nearing reality.

Last year, funding to quantum computing startups hit nearly $1.2 billion — per Crunchbase data — including quantum computing and networking startup Photonic raising a $100 million round that included an investment from Microsoft just last November.

That number dwarfed the less than $800 million raised in 2022 — making quantum one of the few sectors to see an increase in venture funding in 2023.

While it’s too early to say venture funding will again increase in the sector this year, it is quite evident investors see the potential in both quantum technology and its ability to produce big financial returns.

The second full week of the new year proved to be pretty slow. Just one startup saw a big raise in the nine figures, and a handful saw $75 million — including a trio of biotech firms. Sledding has been tough for big rounds so far this year.

1. Quantinuum, $300M, quantum: Quantinuum locked up a fresh $300 million equity fundraise at a pre-money valuation of $5 billion, as investors are clearly excited about the possibilities of quantum computing. The new funding was led by JPMorgan Chase. The Broomfield, Colorado-based company was spun out of Honeywell in 2021 and merged with Cambridge Quantum Computing. Quantinuum says it has now raised approximately $625 million. Last year, funding to quantum computing startups hit nearly $1.2 billion, per Crunchbase data. That number dwarfed the less than $800 million raised in 2022 — making quantum one of the few sectors to see an increase in venture funding in 2023. While it’s too early to say venture funding will again increase in the sector this year, it is evident investors see the potential in both quantum technology and its ability to produce big financial returns.

2. (tied) Cleveland Diagnostics, $75M, biotech: There have not been a lot of big raises so far this year, but the few we have seen are usually related to biotech. Cleveland Diagnostics is the latest example, locking up a $75 million round led by Novo Holdings. The Cleveland-based biotech is developing diagnostic tests for the early detection of cancers and will use some of the new proceeds to grow the use of its novel IsoPSA prostate cancer test. Founded in 2013, the company has raised $111 million, per Crunchbase.

2. (tied) Comanche Biopharma, $75, biotech: Like we said, there’s been several big rounds in biotech. Concord, Massachusetts-based Comanche Biopharma locked up a $75 million Series B led by New Enterprise Associates. The startup is looking at therapies for preeclampsia, a serious pregnancy complication that affects approximately 10 million women globally each year, according to the company. The issue can lead to complications for both the mother and the baby, including multiorgan damage and seizures. Founded in 2020, the company has raised $111 million, per Crunchbase.

2. (tied) DailyPay, $75M, fintech: Waiting for payday can be a drag. New York-based DailyPay just raised a fresh $175 million so you don’t have to do that. The company partners with employers to allow employees to track, transfer, spend or save their pay as they earn it. The new round was made up of $100 million in an expanded credit facility and more than $75 million in equity financing led by Carrick Capital Partners. The round valued the company at $1.75 billion on a pre-money basis. Founded in 2015, the company has raised $1.2 billion, per Crunchbase.

2. (tied) Tr1X, $75M, biotech: We are not quite done with the big biotech raises yet. San Diego-based Tr1X popped out of stealth this week and announced a $75 million Series A led by The Column Group. The company is developing therapies for autoimmune and inflammatory diseases. Founded in 2018, this is the company’s first round with a disclosed amount, per Crunchbase.

6. Digital Onboarding, $58M, SaaS: Boston-based Digital Onboarding, a customer relations platform for financial services, closed a $58 million investment from Volition Capital. Founded in 2015, the company has raised nearly $63 million, per Crunchbase.

7. Forta, $55M, health care: San Francisco-based Forta, which uses AI to help with access to quality care, raised a $55 million Series A led by Insight Partners. Founded in 2021, this is the company’s first round with a disclosed amount, per Crunchbase.

8. Ratio Therapeutics, $50M, biotech: Boston-based Ratio Therapeutics, a pharmaceutical startup developing radiopharmaceuticals for the treatment and monitoring of cancers, closed a $50 million Series B from various investors including Bristol Myers Squibb. Founded in 2021, Ratio has raised more than $90 million, per the company.

9. SmartLabs, $48M, biotech: Boston-based SmartLabs, which provides laboratory infrastructure and resourcing as-a-service to companies, locked up a $48 million Series C from several investors including Conversion Venture Capital. Founded in 2015, the company has raised more than $400 million, per Crunchbase.

10. Noctrix Health, $40M, biotech: Pleasanton, California-based Noctrix Health, which has developed a wearable treatment to reduce symptoms of restless legs syndrome, closed a $40 million Series C led by Sectoral Asset Management. Founded in 2018, the company has raised $57 million, per Crunchbase.

The biggest deal of the week came from the Red Dragon.

Tech investors and founders were loud and proud about their Gulf money in 2023, after keeping it quiet in the wake of Jamal Khashoggi’s murder.

How do you know when a venture capitalist or founder is in Saudi Arabia looking to get a piece of the country’s piles of petro cash for their latest funds or startups?

A telltale sign is the procession of Mercedes-Benz cars and SUVs weaving through the streets of Riyadh from the city’s Four Seasons Hotel to grand royal meeting rooms where local sovereign wealth fund managers are waiting. Zafer Younis is often inside a vehicle in one of those caravans, accompanying guests from the West. Since 2019, his firm—Silicon Valley Venture and Innovation—has helped broker introductions for U.S. venture capitalists to wealthy investors in the Middle East, packing their days with dozens of pitch meetings in Riyadh, Dubai and Abu Dhabi.

Younis often has to remind his clients, whom he declined to identify on the record, that their Silicon Valley swagger might not translate well in the Middle East. “Humbleness is super important” in Middle Eastern culture, said Younis, who has even written a guide for venture capitalists that want to raise money in the region.

Currently, business is booming for Younis. The end of the era of cheap capital has led to one of the grimmest periods for fundraising on record for Western startups and VC firms at a time when a boom in artificial intelligence startups is prompting a voracious appetite for cash. That has prompted many founders and investors from the U.S. to go abroad with their proverbial hats in their hands, especially to regions where high oil prices have swelled the size of sovereign wealth funds. Over 90 investors have asked Younis for help organizing road shows with investors in the Middle East last year, a greater number than ever before.

Silicon Valley’s romance with the Middle East is back with a vengeance. For a time, the two seemed inseparable. In 2016, Uber scored a cool $3.5 billion from Saudi Arabia’s Public Investment Fund, one of the largest sovereign wealth funds in the world, while SoftBank raised $60 million of its $100 billion Vision Fund in 2017 from PIF and Mubadala Investment Co., one of the United Arab Emirates’ sovereign wealth funds. Tech leaders like BlackRock CEO Larry Fink and Virgin Group founder Richard Branson made pilgrimages to the Future Investment Initiative—a conference in Riyadh sometimes called “Davos in the Desert”—to rub elbows with the Saudi royal family.

But the open affair with Saudi money changed suddenly in 2018 with the grisly murder and dismemberment of Jamal Khashoggi, a dissident Saudi journalist who wrote for The Washington Post. Western intelligence services determined that Mohammed bin Salman, Saudi Arabia’s crown prince and prime minister, likely ordered the murder; he denied having done so but ultimately accepted responsibility for it.

The news upended the growing financial relationship between Silicon Valley and the Gulf: Western business leaders canceled their trips to that year’s FII, Branson called off talks for a $1 billion investment from Saudi Arabia in his space adventures, and several prominent tech leaders, including OpenAI’s Sam Altman, stepped down from the board of Neom, the futuristic city MBS—the initials often used to refer to Prince Mohammed—is building in northern Saudi Arabia.

Silicon Valley didn’t entirely stop taking Saudi Arabia’s money: Then-startups including WeWork and Slack happily accepted hundreds of millions of dollars from the Vision Fund, although the recipients didn’t advertise their connections to Saudi Arabia.

But last year, Silicon Valley stopped trying to keep its thirst for Middle Eastern money on the down low. Social Capital’s Chamath Palihapitiya was spotted in the region and suggested Dubai as a potential location for the All-In Summit, a tech conference put on by the “All-In” podcast he co-hosts. Altman was in the Gulf last year fundraising for a new AI chip startup. And Ben Horowitz—whose firm, Andreessen Horowitz, has raised money from Sanabil Investments—last March appeared at a version of the FII conference in Miami, where he lavished praise on Prince Mohammed in almost profuse terms.

“Saudi has a founder,” Horowitz said at the event. “You don’t call him a founder, you call him His Royal Highness.”

For their part, investors in the Persian Gulf are welcoming them back—with caveats. Middle Eastern investors are still eager to diversify their economies away from oil, but they say they’re done with tech firms treating them like piggy banks. Before they’re willing to write checks, many of them are pressuring venture capitalists and startups to put boots on the ground in the region or to localize their products to foster local tech ecosystems.

“Gone are the days of easy, dumb Gulf money,” said Fares Ghandour, a partner at Wamda Capital, a regional venture firm focused on investing in the Middle East and North Africa.

It’s not hard to see why they’re flexing their muscles. According to a new report from the financial data firm PitchBook and the National Venture Capital Association, startups raised $170.6 billion in 2023 from U.S. venture capitalists, down nearly 30% from $242.2 billion in 2022. Likewise, venture firms are raising less money from pension funds, university endowments and other limited partners: $67 billion in 2023, down around 61% from $173 billion in 2022, according to the same report.

In contrast, the Middle East’s megafunds gushed money last year, thanks in large part to sustained high oil prices. Saudi Arabia’s PIF, for example, was the lead state-owned investor, deploying $31.6 billion in 2023 across 49 deals, up nearly 33% from the prior year, according to a report from research firm Global SWF. Along with PIF, Abu Dhabi’s three sovereign wealth funds—Abu Dhabi Investment Authority, Mubadala and Abu Dhabi Development Holding Co.—and the Qatar Investment Authority also earned spots in the ranks of the top 10 most active dealmakers globally, according to the same report.

Much of the investing by those funds is in areas like mining, aircraft leasing and manufacturing. But one of the biggest Saudi deals was the nearly $5 billion acquisition last July of U.S. game maker Scopely by a games division of PIF.

It’s tougher to say how much money from the Middle East is going into U.S. venture funds. Venture firms are usually tight-lipped about who their LPs are, much less how much money they’re getting from each of them. And after the Khashoggi killing, they clammed up even more about whether and how many of their LPs were Middle Eastern.

It was noteworthy, therefore, when the venture arm of the PIF decided to break the status quo by releasing a list of nearly 40 U.S. VC funds it is a limited partner in, including Andreessen Horowitz, Coatue Management, Founders Fund, Dragoneer Investment Group and Greenoaks Capital Partners.

To human rights advocates, the acceptance of Saudi and UAE state funds back into the fold by tech startups and VC firms is disheartening. Both countries have aggressively cracked down on freedom of speech, arresting—and in Saudi Arabia’s case, sometimes killing—dissidents.

“Any investment coming from Saudi Arabia’s [PIF] is effectively a business deal with the murderer Mohammed bin Salman,” said Sarah Leah Whitson, the executive director of nonprofit Democracy for the Arab World Now. “But, you know, clearly American businesses are into it.”

A spokesperson for the Saudi embassy in Washington didn’t have a comment.

As one founder joked, the days of investors being ashamed of or reticent about taking Gulf money are over. “Once Marc Andreessen took their money—it’s fine,” the founder said.

Spokespeople for Andreessen Horowitz didn’t respond to requests for comment.

Tech leaders jetting to the Middle East for money are finding it’s not the same region many of them left back in 2018.

At that time, the tech scene in the countries of the Gulf Cooperation Council—an economic and political union consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE—was embryonic, with only a few firms writing checks to startups. Since then, the UAE and Saudi Arabia especially have significantly stepped up their efforts to strengthen their local tech ecosystems by creating more tech-focused investment funds, establishing more financial regulations and publishing increasingly aggressive goals for their tech economies.

In Saudi Arabia, two investment firms—Saudi Venture Capital Co. and Jada Fund of Funds—launched in 2018, while the Neom Investment Fund launched last year. Similarly, the UAE launched a $30 billion climate fund with BlackRock, Brookfield Asset Management and TPG late last year. And recently, the country passed a tax law that increases the number of business people who need to be audited,, a move meant to appeal to foreign investors, says Obediah Ayton, director of Dhabi Hold Co., an investment management firm in Abu Dhabi.

“Everybody in the country—for the first time ever in its history—is going to have to submit their books,” he said, saying it will drive sketchy businesspeople elsewhere. “It means that America is going to trust us more and Europe’s going to trust us more.”

In Saudi Arabia, local startups raised a record $1.38 billion in capital last year, up 33% from the $987 million they raised in 2022, according to estimates by financial analytics firm Magnitt. Some of that growth stemmed from funding deals for two Saudi-based fintechs that hit unicorn status last year, Tabby and Tamara.

With signs of life in the startup ecosystems of the Middle East, local sources of money are becoming more assertive about their roles in building them up. In some cases, that means sovereign wealth funds are beginning to cut out the intermediaries. As The Information has previously reported, funds from Qatar, Saudi Arabia and the UAE have told investors they have a new strategic mandate to make more investments directly into startups instead of backing Western VC funds, according to two investors who spoke to these Middle Eastern sovereign wealth funds.

In cases where sovereign wealth funds are still putting money into Western VC funds, those deals are increasingly coming with strings attached to ensure a bigger local impact. For example, Saudi Venture Capital on some deals will require venture firms to invest 1.2 times the amount of money SVC has committed to those firms in Saudi startups, according to two investors who spoke to the firms. The definition of what qualifies as a Saudi startup under SVC’s rules is a bit squishy, though, according to one of those investors: Startups that simply do business in Saudi Arabia can in some cases qualify.

It’s not an uncommon practice among state-controlled investors: Poland’s state fund, PFR Ventures, requires recipients of certain funds to put two times the amount fundraised into Polish companies.

How exactly then does a Western tech investor or founder get a leg up on others when raising money from Gulf investors?

“You have to be serious about deploying staff and your level of expertise” in the region, Ayton said bluntly.

For Kendrick Nguyen, CEO of New York–based private investing startup Republic, that has involved spending the last 12 months proving his dedication to the region. Nearly two months of that has consisted of visits to Doha, Riyadh and Abu Dhabi to build relationships with investors and other startups. This year, he plans to do even more traveling to the region.

Nguyen’s biggest show of commitment so far: Republic plans to establish an international headquarters in the Middle East in early 2024, which hasn’t been previously reported. It is currently choosing between Saudi Arabia and Abu Dhabi as the location for the office, Nguyen said. The company will also create a satellite office in the city it doesn’t select as its international headquarters, according to Nguyen.

Nguyen chooses his words carefully when describing his motivations for establishing a bricks-and-mortar presence in the region. The primary goal, he says, is to help Republic more effectively offer its services to the countries in the Gulf Cooperation Council. At the same time, he acknowledges the move will also likely help him build relationships with sovereign wealth funds in the Gulf.

“Setting up an office just to raise or eventually raise would be too artificial. But if paired with actual business or simply [wanting to have] real business relationships in the region, the office helps,” Nguyen said.

His is not the only startup setting up shop in the region. Revolut, a global neobank headquartered in London, has 100 engineers working in the UAE whom it relocated from Ukraine and Russia due to the war there. It's also hiring a team to work on launching its services in the region this year, a person with knowledge of the company’s plans said. The business, which enables cross-border money transfer, could take advantage of the Middle East’s development as a global hot spot for dealmakers and businesses.

One Western investment firm, 500 Global, has taken its commitment to the region to another level. The firm, which started in Silicon Valley, has been investing in the Middle East since 2011. And Khashoggi’s killing hardly spooked it from the region, unlike other Western investors: 500 Global opened an office in Riyadh in 2018, and a month after his death the firm partnered with the nonprofit Misk Foundation, founded by Prince Mohammed, to launch an accelerator aimed at startups in the Middle East and North Africa. In 2021, the firm’s chief operating officer and managing partner, Courtney Powell, went even further when she moved her entire family to Saudi Arabia.

Her relocation was inspired by 500 Global’s own economic research, which showed that Saudi Arabia is one of the fastest-growing economies outside the U.S. and China, she says. “I just viewed it as an incredible opportunity and really a once-in-a-lifetime opportunity to see a massive economy transform,” she added.

The move could have been complicated for Powell as a female investor in Saudi Arabia. While there has been progress on women’s rights in the country—the nation began allowing women to drive in 2018, for example—there is still a male guardianship system in place that requires a woman to get her guardian’s approval to marry. Prince Mohammed’s regime has also imprisoned prominent activists who advocated for increased women’s rights.

But Powell says she’s been comfortable working as a woman in Riyadh. “Over 30% of our portfolio in the Middle East is female founded or co-founded, which is higher than our portfolio within the U.S.,” she said. “I think the old perceptions of Saudi continue to change and you see that women and youth are really empowered here and entrepreneurship has massive support.”

Her firm has been rewarded for its loyalty. In early 2021, 500 Global co-launched a startup accelerator with Sanabil.

Still, not every tech investor believes it’s necessary to sign a local lease in Riyadh or Abu Dhabi to win the financial support of Gulf fund managers.

Some of them enlist intermediaries that help build their relationships in other ways. Several investors who do business in the Middle East say they’ve had conversations with one such intermediary who represents Andreessen Horowitz in the region. Other U.S. venture firms have relied on local representatives to escort portfolio companies, particularly later-stage startups, to sovereign wealth funds and family offices.

For the U.S. investors, it can help their startups score government contracts or get follow-on funding from investors in the Middle East. Meanwhile, the visits build trust between U.S. venture firms and Gulf investors by giving the latter direct access to star startups, one Arab investor said.

Along those lines, Arjun Sethi of Tribe Capital, a venture firm based in San Francisco, said he was not impressed with investors and founders who merely promise to open offices or hire teams in the Middle East, describing those as potentially hollow gestures. Sethi has long been public about his ties to the region, traveling regularly to visit his limited partners and portfolio companies in the Gulf once every two months, but Tribe does not have an office there.

Sethi says he sometimes runs into fund managers in the region, who tell him it’s a relief to see him in the flesh. “Trust is the currency that is earned and takes time for a lot of folks,” said Sethi. “You can’t just set up an office and say, ‘I’ve arrived and I’m going to be successful now.’”

While the memory of Khashoggi’s murder has faded for some, other political tensions have awakened criticism of Silicon Valley’s Middle East relationships.

On October 9, following Hamas’ massacre of about 1,200 people in Israel, venture capitalist Keith Rabois retweeted a post that inaccurately said Saudi Arabia would cease all negotiations to normalize relations with Israel. “This is why it is immoral to raise money from Saudi Arabia,” said Rabois, then a partner at Founders Fund.

Saudi officials subsequently clarified the efforts are on hold until Palestine and Israel can work out a two-state solution. Rabois’ comment was a bit awkward since Founders Fund was among the firms Sanabil listed on its website last year as recipients of its funding. Rabois recently left Founders Fund for Khosla Ventures.

The Israel-Hamas war also cast a spotlight on Qatar for tech investors. In late 2022, the country’s $475 billion sovereign wealth fund signaled that it wanted to be a bigger tech investor when it backed Elon Musk’s Twitter acquisition. In February, Qatar will host the first-ever Web Summit tech conference in the region, a glitzy affair expected to feature beachside afterparties and celebrity headliners like Formula E World Champion Jean-Éric Vergne. But after the war intensified in October, a number of scheduled attendees cut ties with the conference, with VC firms like Coatue Management canceling their speaking gigs.

Some investors and founders say they’re not comfortable doing business with Saudi Arabian funds, but they have no such qualms about taking capital from other countries in the region, such as the UAE.

Last May, Delian Asparouhov—co-founder of Varda Space Industries, a startup that manufactures pharmaceuticals in space—was about to leave for Dubai to meet with potential partners for the company. At the time, he told The Information he was appalled by Saudi Arabia’s abuses against its LGBTQ population.

“My position, if any, is that the UAE is an acceptable capital partner,” he said.

Some human rights advocates, like Whitson of Democracy for the Arab World Now, push back against that argument, saying there’s little difference in the human rights records of the UAE and Saudi Arabia. Freedom House, a nonprofit that grades countries around the world in terms of their repressiveness, assigned a score of 8 out of 100 to Saudi Arabia last year, 18 to the UAE and 25 to Qatar.

Powell of 500 Global says her firm believes supporting entrepreneurs abroad can lead to positive changes in their countries. “If you’re talking about wanting to see advancement in terms of an economy or society, we can think of no better way to do that than to invest in incredible founders who are going to create jobs and economic impact,” she said.

Sheridan Clayborne—co-founder of Lendtable, a San Francisco–based startup that gives people cash advances to help them receive 401(k) matches from their employers—had a similarly positive experience in Saudi Arabia. Last month, he visited the country on a trip that combined business with vacation, including a visit to the desert city of AlUla with a group that included members of Gulf royal families and regional institutional investors.

As he stargazed in the desert, an hour from the fast-growing city, Clayborne listened to his Arab companions talk about all of the infrastructure and projects that didn’t exist five years ago and all the futuristic plans for the coming decade.

“These are some of the people who are actually making those changes,” he remembered thinking. “There’s just such a big shift in the country—you get to hear how different this all could be in the next five years.”

Collapsed property empire’s development of Hamburg’s ‘Elbtower’ was once championed by Olaf Scholz

The Signa group’s flagship German development, a 245 metre-high tower in Hamburg championed by Chancellor Olaf Scholz, has gone bankrupt.

The city of Hamburg said on Friday that the company responsible for the “Elbtower” had informed it that it had been unable to secure rescue funding and could not meet its liabilities.

The project, owned by Signa Prime — one of the three main holding companies at the centre of the collapsed Signa group’s luxury property empire — had a gross development value of €1.4bn, documents seen by the Financial Times show.

Signa Prime’s shareholders and creditors are likely to get a fraction of that if anything, highlighting the extent to which the group’s complex, debt-fuelled business model ultimately hinged on over-optimistic valuations and a buoyant commercial property market to support them.

The city of Hamburg said it was considering exercising an option granted to it under the terms of the development to buy the property back at less than the value it had sold it to Signa for — €122mn.

“The city of Hamburg can now assert its right of repurchase, which is secured by the purchase agreement, as well as the assumption of all planning and construction contracts,” said city development senator Karen Pein.

The city is also speaking with private investors, who may still wish to step in to assume Signa’s responsibilities. Among them is logistics billionaire Klaus-Michael Kühne, already a prominent Signa investor.

The Elbtower, which is less than half-complete and sits on a prominent-inner city site on the Elbe river, was feted by Scholz during his tenure as mayor of Hamburg.

Scholz called the project, which was due to be completed in 2025, “a signal of Hamburg’s ambition”.

The chancellor has declined to comment on whether he had met Signa’s swashbuckling founder, Austrian billionaire René Benko, who has gone to ground since Signa’s collapse in the final weeks of 2023.

Shareholders and creditors who once flocked to Benko are still struggling to understand what claim on Signa’s assets they might have — a task complicated by the bewildering network of more than 1,000 corporate entities set up by the Austrian.

None of the group’s accounts are consolidated and the three principal Innsbruck-based holding companies at the centre of the group all have different administrators.

Work on the Elbtower halted more than three months ago when Signa abruptly stopped making wage payments to the tower’s construction company.