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Qatar sees 341% surge in VC sports and fitness funding

People, Person, Sport Reuters/Noushad Thekkayil
People attend the annual Qatar National Sports Day on 14 February. Funding for sports and fitness startups in 2022 was $4.12m compared to around $1.2m in 2021
  • Sports and fitness startups received $4.12m in funding last year
  • Businesses optimistic that post-World Cup boom will persist
  • Qatari companies raised $26.6m in VC funding in 2022

Venture capital funding into Qatari sports and fitness startups nearly quadrupled last year as the country’s multibillion dollar hosting of the 2022 World Cup helped swell interest in related industries. 

In 2022, sports and fitness startups received 15 million riyals ($4.12 million) in funding – up from around 4.4 million riyals a year earlier – according to AGBI calculations based upon a report by Qatar Development Bank (QDB) and Magnitt. 

The aggregate deal value increase comes despite the number of sport and fitness-related deals falling to four last year from five in 2021. 

London-based Aser Ventures, which is an investor in English Premier League club Leeds United and broadcaster Eleven Sports, bought a “strategic” stake in Qatari sports software firm Sponix Tech in June 2022. The report estimates Aser paid around 15 million riyals. 

Qatari businesses seem optimistic that a post-World Cup boom will persist. The Future Output Index, which is compiled alongside the more widely read monthly Purchase Managers Index (PMI) hit a three-year high of 74.9 in January, its sixth straight monthly increase as sentiment improved across all surveyed sectors and was especially strong in manufacturing. 

Qatar’s PMI fell in January, although such a decline was expected following sustained increases ahead of the global soccer tournament. 

The Financial Services Future Activity Index hit a 41-month high in January, with this bullishness also reflected in Qatar’s growing venture capital industry. 

Qatari companies raised 97 million riyals in venture capital funding in 2022, up 35 percent versus a year earlier, according to the QDB report. The number of completed transactions rose 18 percent year-on-year to 45, ranking the country fourth in Middle East and North Africa in terms of deal volumes. 

“Innovation is the solution to Qatar and the region’s unique challenges,” Haya Al-Ghanim, programs director at the Qatar Research, Development, and Innovation (QRDI) Council, said in the QDB report. 

“Building a knowledge-based economy is critical to ensuring Qatar is a viable player in the highly competitive global innovation landscape, and venture investments are crucial in building that pathway.”

In terms of industry, 10 of last year’s investments were in fintech companies, seven in IT, five in healthcare, four in sports and fitness and three in ecommerce). 

The investor pool is also deepening, with 17 investors participating in last year’s deals, up 70 percent compared with 2021). 

From 2016 to 2022, Qatari companies received 432 million riyals in venture capital investments, spread across 196 transactions. In total, 159 startup obtained funding during the period. 

QDB remains the lead investor, with the government-run entity investing 253 million riyals from 2016 to 2022. Of this, 90 million riyals was invested directly in companies, 128 million riyals was committed to investment funds and 35 million riyals went to startup accelerators. 

QDB’s 44-million-riyal Series B investment in delivery app Snoonu was 2022’s largest venture capital deal and accounted for nearly half the annual total. 

In 2022, hundreds of researchers and faculty at Qatar University participated in several innovation and startup development schemes, some of which were run in partnership with QDB. 

Nearly 350 companies last year submitted proposals to QRDI’s Qatar Open Innovation programme, which aims to bring together government agencies and local and international innovators to create new technologies. 

Of these proposals, QRDI chose 25 to develop – 10 starting last year and 15 to begin in 2023. 

“The programme helps Qatar move from being a market that imports solutions to one where solutions are innovated, tested, and developed,” added QRDI’s Al-Ghanim.