Qatar Investment Authority (QIA) will launch a $1 billion venture capital (VC) fund of funds for international and regional venture capital funds, the sovereign wealth fund announced on Monday.
According to QIA, the program aims to attract international VC funds and startups to Qatar and the Gulf Cooperation Council (GCC) region, with a particular focus on the fintech, edtech and healthcare sectors.
Similar to a typical fund of funds structure, QIA initiatives invest indirectly through other VC funds, but also through targeted co-investments with participating funds. Sovereign wealth funds are increasing the number of startups in Qatar and attracting VC funding as they seek to close the gap with more established ecosystems in neighboring countries such as Saudi Arabia and the United Arab Emirates (UAE). We would like to increase the availability of
According to online tracker Global SWF, Gulf sovereign wealth funds (SWFs) such as Abu Dhabi Investment Authority, ADQ, Mubadala, Saudi Arabia's Public Investment Fund and Qatar's QIA will generate more than $73 billion across different asset classes in 2022. invested.
These days, these funds aimed at reducing dependence on oil have increasingly poured money into high-tech startups in the GCC region in hopes of nurturing a growing venture capital industry. This strategy has met with some success. In 2023, Saudi startups alone raised $1.3 billion. Additionally, Magnit data revealed that only 45% of investors were from outside the MENA region. This signals the growing maturity of the local venture capital ecosystem, which received $2.6 billion in funding last year.
So far, Saudi Arabia has taken the lead in establishing dedicated funds for technology companies. Initiatives such as Jada, the Public Investment Fund's (PIF) $1 billion fund of funds and Saudi Venture Capital are active venture capital funds, including prominent companies such as China's MSA Capital and Endeavor Catalyst We are investing in However, unlike these initiatives, which also target private equity funds, QIA's Fund of Funds focuses exclusively on venture capital funds and is the first of its kind in the region.
“Currently, Qatar does not have a dedicated capital pool for companies that have completed seed funding and are ready for Series A to Series C funding rounds. Build a well-connected startup ecosystem network in Qatar This is the basis for diversifying the country's economic base in the long term,” QIA CEO Mansour Ebrahim Al-Mahmoud said in a statement. “QIA launched this program to make it easier for innovative companies to access funding and support from VC funds, expanding their business expansion and markets in Qatar, across the GCC, and ultimately into the international arena. This will enable us to expand our presence in
QIA requires fund managers seeking capital to demonstrate a strong track record and actively participate in the Gulf's VC and startup ecosystem. This will require establishing a business in Qatar, a senior level presence and an outline of plans for expansion across the GCC.
It will be particularly interesting to observe QIA's recent direction and alignment with individual investments. These wealth funds have traditionally supported overseas startups, particularly in the US and Asia, with minimal ties to the Gulf region. For example, QIA has invested in a variety of ventures including Builder.ai, Mukesh Ambani's Reliance Retail, Singapore's AI marketing platform Insider, African carrier Airtel Africa, and prominent Indian startups such as Swiggy and Flipkart. ing.