The Qatar Investment Authority (QIA) has announced the launch of a $1 billion venture capital fund of funds for international and regional venture capital funds on Monday.
The program aims to attract international VC funds and startups to Qatar and the wider Gulf Cooperation Council (GCC) region, focusing specifically on the fintech, edtech, and healthcare sectors.
Operating similarly to traditional fund-of-funds structures, QIA’s initiative will invest indirectly through other VC funds while also making targeted co-investments with participating funds. The sovereign wealth fund aims to increase the number of startups and improve the availability of VC funding in Qatar to compete with more established ecosystems in neighboring countries like Saudi Arabia and the United Arab Emirates (UAE).
In 2022, Gulf sovereign wealth funds (SWFs) collectively invested over $73 billion across various asset classes, as reported by Global SWF, an online tracker. These funds have been increasingly investing in tech startups in the GCC region to foster thriving venture capital industries and reduce reliance on oil. This approach has seen success, with Saudi Arabian startups alone raising $1.3 billion in 2023.
While Saudi Arabia has spearheaded initiatives like Jada and Saudi Venture Capital for tech firms, QIA’s fund of funds is solely focused on venture capital funds, distinguishing it as the first of its kind in the region.
QIA CEO Mansoor Ebrahim Al-Mahmoud stated that building a well-connected startup ecosystem network in Qatar is essential for long-term economic diversification. The program aims to provide innovative businesses access to capital and support from VC funds to scale operations and expand market presence regionally and internationally.
Fund managers seeking funds from QIA must demonstrate a strong track record and active participation in the Gulf’s VC and startup ecosystem, including establishing operations and outlining expansion plans across the GCC.
QIA’s strategy aligns with the interests expressed by fund managers and venture capitalists seeking capital from sovereign wealth funds in the Middle East. Wealth funds like QIA have historically invested in foreign startups, but with this new initiative, they aim to focus more on supporting the local venture capital ecosystem.
