Arab Angel Fund Closes $25 Million Fund To Help US Startups Enter And Grow In MENA Market The investment was raised from 65 private family offices and High Net Worth Individuals (HNWI) belonging to the GCC and larger MENA regions.

Arab Angel Fund has announced raising US$15 million for its flagship Arab Angel Fund I (AAF I) thereby closing its target of $25 million, and also being oversubscribed in the process. According to a statement, the investment was raised from 65 private family offices and High Net Worth Individuals (HNWI) belonging to the GCC and larger MENA regions. As a mandate, AAF invests in venture-backed early-stage technology startups in North America, and supports the entry and growth of these ventures in MENA and GCC, as part of their expansion plans.

Speaking about the specific avenues that AAF I is likely to look at going forward, General Partner and MD Omar Darwazah says that while the Fund is "sector agnostic and stage-focused," four key themes that have emerged in the last 12 months are connected healthcare, Software-as-a-Service (SaaS), fintech, and Direct-to-Consumer sectors. "On the short- to medium-term, I expect the Fund to deploy more capital along these investment themes. The team and I are encountering impressive early-stage companies in blockchain, applied artificial intelligence, robotics, healthcare and e-commerce," he says. "We will continue to invest in companies which we feel have disruptive capabilities to their respective industries and especially those which have commercial relevance in the MENA/GCC regions." Having said that, he says the AAF team will continue to be on the look out for emerging technologies, and deploy funds in those that have massive growth potential.

With the firm's partners and advisors comprising of former diplomats, international business executives, fund managers, and others from Egypt, Jordan, Lebanon, Morocco, Saudi Arabia, Kuwait, Turkey and the UAE, AAF is able to provide expertise and experience in a variety of sectors, and thus helps its portfolio companies enter emerging markets in the MENA region through joint ventures, IP licensing, and other modes. "The Fund is bridging Middle Eastern capital to the US venture ecosystem and imports the commercially viable and applicable technologies back to the region," Darwazah explains. "While the Fund does not invest in regional startups, the team and I believe that bringing the most cutting-edge and innovative technologies from Silicon Valley and North America in general will add significant value to the MENA/GCC tech ecosystem as well as the broader population," he adds.

In a statement on the fundraising, AAF General Partner and MD Kyle Hendrick said, "We are excited to report that our flagship fund was oversubscribed after receiving strong interest from individuals, family offices and HNWIs from across the region. The oversubscription is a testament to the growing demand from the region for early-stage venture investing in North America as well as an interest to diversify in to an asset class which invests in cutting edge technologies." Since its first close in September 2016, AAF I has already invested in close to 50 startups along with US-based VC firms and accelerators including New Enterprise Associates, Andreessen Horowitz, Y Combinator, GE Ventures, and Microsoft Ventures, among others. Darwazah says AAF helps these enterprises "localize their product and services," and assists them in navigating the nuances associated with the regional markets by connecting them with prominent HNWI's and family offices in the region.

With regard to the current fundraising round, Darwazah notes from his experience that family offices and HNWI's in the region are keen to diversify their investments in a higher risk-return product. "I believe the risk appetite for MENA / GCC investors has increased dramatically over the past several years as a result of lower and more volatile commodity prices. Today, it is more important than ever for these family offices and HNWI's to continue to diversify away from conventional asset classes such as equities, bonds and real estate and allocate a small portion of their liquidity in the early-stage venture asset class," Darwazah observes.

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