July 16, 2024

Reportedly, Qatar has a $100 million fund for startups.

March 04, 2024
3Min Reads

Through its development bank, Qatar revealed its startup investment program during the most recent Web Summit. The program's goal is to draw in startup and growth-stage IT businesses looking to start up or grow in the nation.

As TechCrunch has learnt, a $100 million fund maintained by the Qatar Development Bank (QDB) supports the initiative, which goes by the name "Startup Qatar Investment Program."

According to a statement from QDB, the initiative will provide up to $500,000 in investment for early-stage firms wishing to get their foothold in Qatar and up to $5 million for growth-stage businesses hoping to take their operations further in the Middle Eastern nation. The development bank also emphasized that in addition to offering financial assistance, it will give portfolio firms access to markets and knowledge. The program targets entrepreneurs in more than fifteen areas, including marketplaces, healthtech, fintech, cleantech, agritech, B2B SaaS, proptech, AI & ML, and robotics, according to its website.

According to QDB CEO Mr. Abdulrahman bin Hesham Al Sowaidi, "QDB is intensifying its efforts to position Qatar as a major hub for startups across various industries, particularly the tech sector due to its strategic importance." Al Sowaidi stated, "With these efforts, we aim to foster innovation, accelerate technology adoption across all domains, and attract and retain talents in various fields to support our entrepreneurship ecosystem in an effort to contribute to a sustainable and business-friendly economy."

The startup program in Qatar is comparable to the strategies used by venture capital firms such as Alpha Wave Global, based in the United States, which oversees Alpha Wave Incubation, a $300 million early-stage fund supported by ADQ, one of Abu Dhabi's sovereign wealth funds. Similar venture funds across the Gulf Cooperation Council (GCC) require, in exchange for money and other commercial benefits, that businesses from outside the region set up a "second" headquarters or office in respective regions (which act as bases for extending operations across MENA and GCC).

Similar to most venture ecosystems, these venture capital firms in the Gulf are subject to numerous conditions that are mandated by restricted partners, mostly sovereign wealth funds. A $1 billion venture capital fund of funds devoted to global and regional venture capital funds was just unveiled by Qatar's sovereign wealth fund last week.

In order for Qatar to grow its digital ecosystem and compete with Saudi Arabia and the United Arab Emirates, it is imperative that it first launch its fund of funds and startup program. The data from emerging markets data tracker Magnitt makes clear how urgent the situation is: only 6% of agreements in the MENA area were completed by Qatar last year, and venture capital investment in its companies will total just 43 million Qatari riyals (~$11 million) in 2023. By contrast, the UAE leads the region in terms of deal volume, with Saudi Arabia accounting for 52% of deals in the region.

Having said that, the region benefits from more competitiveness. In contrast to the global average of 42%, the MENA area saw a 23% decrease in venture capital activity last year. In light of this, Qatar's increased venture capital activity, led by its development bank and sovereign wealth fund, presents a positive picture for the region as a whole, as local investors accounted for 55% of startup funding last year.


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