Banking & Finance

VC firm Shorooq focuses on AI, biotech and gaming

February 20, 2024, 11:43 AM

Shorooq partner Tamer Azer says the VC firm is excited about investing in a 'different generation' of companies in sectors such as gaming

Shorooq manages $350m
Completed 13 deals last year
Focus on four countries

Venture capital company Shorooq Partners will target companies specialising in sectors such as artificial intelligence, biotech and gaming, a senior executive told AGBI.

Shorooq is based in Abu Dhabi and manages about $350 million in assets and invests in startups in the Middle East and North Africa and beyond.

It is focused on on fintech and includes UAE-based wealth management platform Sarwa among its portfolio.

“There are also many companies emerging that are building new-to-market innovations – they’re building unique products in AI, biotech, life sciences and gaming, for example,” said Tamer Azer, a partner at Shorooq Partners.

“We’re seeing a different generation of companies and founders emerge. That’s something we’re very excited about.”

Shorooq analyses around 5,000 companies annually and invests in 12 to 15 each year. Despite a broader industry slowdown, it was the second most active VC firm in the Middle East and North Africa in 2023, completing 13 deals, according to a report by Wamda. Egypt’s Flat6Labs was top with 58 deals.

Excluding debt financing, startups in the Mena region raised a combined $2.25 billion in 2023, down 35 percent versus 2022, Wamda estimates.

“We saw an opportunity to continue to do what we do best, and we believe it will pay off for us,” said Azer. “We invested in fantastic companies and we are working very closely with them to help them scale across the region and beyond.”

Shorooq has invested more than 100 times in 65 companies including Abu Dhabi-based Pure Harvest Smart Farms and Saudi Arabia’s Tamara. The Riyadh-based buy-now-pay-later provider has raised $557 million in funding and reached a $1 billion valuation last December, according to PitchBook.

Shorooq's Tamer Azer — Shorooq’s Tamer Azer

The bulk of Shorooq’s investments are in four core markets: Saudi Arabia, the UAE, Egypt and Pakistan.

“We believe that building corridors between these countries can create tremendous added value for our portfolio companies,” said Azer.

Saudi Arabia and the UAE offer high average revenues per customer, while Pakistan and Egypt provide huge potential customer bases because of their nine-figure populations.

“If you build companies that leverage these four countries, then you can do really well,” said Azer.

Shorooq’s investors include regional sovereign funds such as Abu Dhabi duo ADQ and Mubadala, Dubai Future District Fund, and Saudi Arabian pair Jada and SVC, plus the Korean Venture Investment Corporation and regional family offices.

“Some of these (sovereign) entities have mandates to develop their domestic economies but they are still very much return-driven,” added Azer. “They are extremely sophisticated investors who understand how to drive local growth in the industry while being focused on returns.”