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Qatar’s new $1bn fund to propel global tech growth

Fintech businesses have seen strong growth in the Mena e-payments sector Unsplash
The 'Fund of Funds' will focus on the fintech, edtech and healthcare sectors

State-backed Qatar Investment Authority (QIA) will launch the country’s first venture capital (VC) fund to invest more than $1 billion in international and regional VC funds.

The “Fund of Funds” seeks to attract international VC funds and entrepreneurs to the Gulf state and the wider Gulf Cooperation Council (GCC) region, focusing on the finance, education and healthcare sectors.

The fund will primarily invest indirectly through other VC funds. It will make targeted co-investments with the participating funds and will not invest in private equity, debt, or any other funds.

“There is currently no dedicated pool of capital in Qatar for companies that are past seed funding and are ready for Series A to C funding rounds,” said QIA chief executive officer Mansoor Ebrahim Al-Mahmoud. 

“Building a well-connected startup ecosystem network in Qatar is fundamental to diversifying the country’s economic base in the long term. 

“QIA is launching this programme to help ensure that innovative businesses can readily access capital and support from VC funds, enabling them to scale operations and expand market presence in Qatar, across the GCC, and ultimately onto the international stage,” he said.

Regional and emerging local fund managers will be part of the programme, as the initiative will accelerate the development of Qatar’s venture capital ecosystem.

Last August, Saudi Arabia’s Crown Prince Mohammed bin Salman launched a $200 million fund for early-stage investment in local and global high-tech companies as part of King Abdullah University of Science and Technology's strategy.

Three months later, Dubai Integrated Economic Zones Authority unveiled a VC fund worth $136 million designed to finance technology startups to support the economic objectives outlined in the Dubai Economic Agenda, D33, by promoting the growth of SMEs in various emerging sectors.

Total VC deals in the Middle East, North Africa and Turkey reached 517 in 2023, raising a combined $1.9 billion, down 40 percent from 875 deals worth an aggregate $4.8 billion in 2022, venture capital data provider PitchBook said.

Last year, 19 Mena VC funds closed, attracting $1.8 billion from investors, the second-highest annual amount raised, PitchBook estimated. However, it declined from the $6.3 billion raised across 37 funds that closed in 2022.

Issa Aghabi, founder and managing director at Access Bridge Ventures, a Dubai-based VC company that has invested $35 million in regional startups, told AGBI Mena VC investments will increase in 2024 compared with 2023, accelerating in the second half of this year as funds that were “on the sidelines” return.

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