VentureSouq Debuts US$50 Million Fintech Fund To Boost Early-Stage MENA Startups
GCC-based venture capital firm VentureSouq has announced the launch of its US$50 million venture fund to focus on fintech early-stage entities across the MENA region and Pakistan.
By Pamella de Leon •
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GCC-based venture capital firm VentureSouq has announced the launch of its US$50 million venture fund to focus on fintech early-stage entities across the MENA region and Pakistan.
The fund will be used to invest in early-stage fintech and software-as-a-service companies. It will target key subsectors such as payments infrastructure, alternative credit, digital banking, proptech, insurtech and personal financial management.
Besides being the first sector-specific fintech fund in the MENA region, its timing is especially opportune, noted Sonia Gokhale, General Partner at VentureSouq. "Financial services is being disrupted globally, which is now starting to happen here too, and we wanted to be in a position to use our expertise from having invested in over 40 fintech [companies] globally to work with founders building the next great fintech companies here in MENA," said Gokhale. "It is still early days in MENA with respect to fintech, and we are very bullish on the long-term opportunity set."
The MENA region's fintech sector continues to gain traction, accelerated by consumers' positive adoption rates. According to a year-to-date report by consultancy firm Redseer, in the Middle East, one out of every four investment deals in 2021 was made in the fintech sector, which accounts for nearly 30% of all funding raised during the year- about $2.1 billion in 220 deals.
The MENA Fintech Fund I is backed by major regional investment entities, including Saudi Venture Capital Company (SVC) and the Jada Fund of Funds, Bahrain's Al Waha Fund of Funds, UAE's DisruptAD, ADQ's venture platform, and Mubadala Investment Company, alongside OFC, the Middle East investment arm of The Olayan Group.
Assembling the right limited partners (LP) for the fund was critical, added Gokhale. "Fintech investing requires sector expertise, but more importantly, the ability of fintech startups to become category winners here will be based in large part on their ability to scale across multiple markets in the MENA region," she said. "This can be challenging due to the localized nature of regulations and policy development. Recognizing this, we wanted to be tactical about our investor base, and bring on board LPs across the MENA region who can provide expertise and connectivity to our portfolio companies, and so far, this has had an extremely positive impact."
VentureSouq's fund has been actively deploying capital across startups in MENA and Pakistan, a list that includes regional buy-now-pay-later startup Tabby, KSA-based B2B marketplace Sary, and proptech platform Huspy. Its investments in the UAE include fintech startups Baraka, Flexxpay, NymCard, and Verity. In Pakistan, it had invested in Creditbook, PostEx, and Abhi Finance. In Egypt, the fund invested in transport platform Trella, gig economy financial platform Dayra, and ride-hailing app Yassir, plus a number of other entities that will be announced in the coming months. Stay tuned!
