Over the next three years, a new $60 million Bahrain venture capital (VC) fund will invest in 120 early-stage startups in the Middle East and North Africa (MENA) region as it seeks to tap into the coronavirus-fueled tech boom.
The fund, called Plus Venture Capital (+VC), will be led by Sharif El Badawi and Hasan Haider, who were previously managing partners in the MENA arm of venture capital company 500 Startups.
“Regional start-ups have a tremendous opportunity to raise capital as the economy recovers following the initial slump at the end of the first quarter,” Mr Haider said.
“From our experience of the previous two recessions, investment in technology start-ups will increase dramatically as the market moves towards pre-crisis levels,” he added.
+VC will have offices in Saudi Arabia, the UAE and Egypt, with its headquarters in Bahrain.
It will concentrate on start-ups in the tech-based seed stage that have launched and are gaining some traction. In addition to logistics, content and eCommerce, the company will concentrate on sectors like FinTech, HealthTech and EduTech.
+VC will work closely with limited partners, including prominent family offices, individuals with high net worth and institutional funds. A series of closing events will be initiated, with the first scheduled to come by the end of this year.
“The MENA startup scene, rather than being crushed by the pandemic, has bounced back with renewed vigor. +VC is closely monitoring the market and expects to start due diligence on several opportunities in the coming weeks. Initial investments will have an average cheque size of $200,000, with half of the capital reserved for follow-on rounds of up to $2 million for the most successful portfolio companies. This allocation may increase to 70 percent depending on the final fund size.”
Having seen many big deals, including the $3 billion acquisition of Careem by Uber last year and the local e-commerce site Souq by the US giant Amazon for $580 million in 2017, the MENA region is emerging as a crucial start-up ecosystem.
According to the Magnitt data platform, amid the pandemic-related challenges, MENA start-ups raised $659 million in funding in the first half of the year, up 35 percent compared to the previous year.
The UAE secured the largest share of the funds raised, which was attributed to many investment deals at a later stage, while Egypt stood first in terms of the number of deals, grabbing 25% of the total in the region.
“With our team having invested in many start-ups over the years, we can provide the right level of support to the founders that we invest in,” said Mr Badawi, who has worked with several tech firms since the mid-1990s in Silicon Valley, including Google, before moving to the region to focus on start-up investing.
“Our founders can expect deep support from experienced practitioners as well as access to a unique network of operators, mentors and investors,” said Mr Badawi.
Together, more than 200 transactions have been completed by Mr Badawi and Mr Haider, the statement said.