Qatar, along with the Gulf Cooperation Council (GCC), is planning to provide a massive boost to the startup ecosystem in the region. While foreign investments have been high in the Middle East, most of it has been directed to startups located in the UAE and Saudi Arabia. The Qatar Investment Authority (QIA) plans to change this scenario.
As per the QIA, the three particular sectors that are ripe for VC investments are fintech, healthcare, and edtech. But, indirect VC investments are not the only form of monetary support that they plan to provide. The additional funding will be provided directly by the QIA as a form of co-investment along with the VC funding. To this end, the organization has launched a new fund titled ‘Sovereign Wealth Fund’.
Tech is the Way Out for Oil Economies
The entire Middle East region wants to step out of the oil game as their only source of national funding. With tech startups taking centre stage, many have been able to acquire funds. The governments are also taking an active step and QIA is not the only one to step in. The Investment Authority of Abu Dhabi, the Public Investment Fund of Saudi Arabia, the ADQ, and many others along with the QIA had raised a total of $73 billion in 2022 to help reduce the reliance on oil.
In 2023, the venture capital ecosystem in the region became even stronger, with startups in Saudi Arabia having raised over $1.3 billion in investments. What’s even more interesting is that almost 50% of this funding was received from outside the MENA region, proving a global interest in the initiatives.
But, where the QIA’s latest funding move stands apart from these initiatives, is the fact that its funding is aimed purely at venture capitalists. While this is nothing new to the MENA region, it is a first for Qatar. The CEO of QIA stated that this funding aims to help the startups who have moved beyond the seed funding stage, and thereby diversify the economic base of the country.
A Warm Welcome for VCs
The QIA is now actively calling out to venture capitalists to take part in the funding process. Fund managers in the region have already expressed a need to raise capital via limited partners and sovereign wealth funds, and the QIA is making the path clear for them to do so.
Much of the sovereign wealth of MENA has been directed to startups across Asia and USA, the QIA plans to change this for the better. Their primary aim is to create a healthy VC ecosystem in the country, and their movements are making Qatar the next target in the region for VCs across the world.
