Qatar’s Sovereign Wealth Fund Launches a New Venture Capital Fund

Qatar’s sovereign wealth fund, the Qatar Investment Authority (QIA), recently announced the launch of a $1 billion venture capital fund of funds. This initiative aims to draw international VC funds and startups to Qatar and the wider Gulf Cooperation Council (GCC) region. The fund will focus on sectors like fintech, edtech, and healthcare.

QIA’s fund will invest indirectly through other VC funds and make targeted co-investments with participating funds. The goal is to increase the number of startups and enhance VC funding availability in Qatar, narrowing the gap with neighboring countries like Saudi Arabia and the United Arab Emirates.

Gulf sovereign wealth funds have been actively investing in tech startups in the GCC region to reduce reliance on oil and foster thriving venture capital industries. In 2023, Saudi Arabian startups alone raised $1.3 billion. Local venture capital ecosystems are maturing, with only 45% of investors coming from outside the MENA region last year.

QIA’s fund is unique in the region as it exclusively focuses on venture capital funds, unlike other initiatives that target private equity funds as well. The fund aims to provide capital for companies beyond seed funding, supporting Series A to Series C funding rounds.

QIA CEO Mansoor Ebrahim Al-Mahmoud emphasized the importance of diversifying Qatar’s economy and ensuring innovative businesses have access to capital and support from VC funds. Fund managers seeking funds from QIA must demonstrate a strong track record and actively participate in the Gulf’s VC and startup ecosystem.

This directive aligns with the demands of fund managers and venture capitalists who seek capital from limited partners in the Middle East. QIA has previously invested in ventures like Builder.ai, Reliance Retail, Insider, Airtel Africa, Swiggy, and Flipkart.

QIA’s new venture capital fund is a significant step in developing Qatar’s startup ecosystem and promoting economic diversification. It will be interesting to see how this fund aligns with the individual investments of sovereign wealth funds that have historically backed foreign startups with minimal connections to the Gulf region.