Saudi Arabia-based investment management and financial advisory company, Watheeq Financial Services, is launching a venture capital (VC) fund worth $26.7 million that will invest in property technology startups in the kingdom and the wider region.
The Watheeq PropTech VC fund is a closed-ended venture capital fund and Shariah-compliant. The Saudi Arabia Capital Market Authority-licensed fund is expected to reach its initial close in the third quarter of this year.
“We are investing in rapidly-growing startups potential market leaders who are disrupting the traditional real estate markets and stimulating eco-friendly lifestyles. Venture capitalists are jumping into PropTech and we are thrilled to be pioneering this transformation from Saudi Arabia to the region,” Khaled Zaidan, managing partner of the fund and head of alternative investments at Watheeq, said.
As the coronavirus pandemic forced companies including those in the real estate sector, to digitize their operations to ensure business continuity, investors have increasingly invested in PropTech.
Last month, Aldar Properties, Abu Dhabi’s biggest property developer stated that it is partnering with the US venture capital firm Fifth Wall to invest in a fund focused on supporting PropTech startups in Europe. The Abu Dhabi company also launched an accelerator in May to support PropTech firms in the region.
The Watheeq PropTech VC fund will pick companies that are using technology to solve issues in the real estate sector while adhering to Shariah-compliant investment standards. It will help bridge the gap between the Middle East and North Africa (MENA) markets and the rest of the world by opening up new market opportunities. At least 50 percent of the portfolio companies chosen by the fund for investment operate in Saudi Arabia.
Smart cities, smart buildings, real estate analytics, blockchain and online viewing technology are some of the focus areas for PropTech companies that are looking to disrupt the traditional market through digital solutions for the entire real estate value chain.
Apart from the pandemic, climate concerns and a rapid rise in population have all contributed to accelerating technology adoption in the real estate and construction sectors and their related industries.