India-Headquartered Stride Ventures Forays Into The GCC With US$1 Million Venture Debt Investment In UAE-Based Maalexi The Stride Ventures team believe that there are quite a few traditional sectors in the GCC region that are not only ripe for technological innovation but also offer plenty of growth opportunities.
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Stride Ventures, an India-headquartered venture debt firm, has begun its international expansion plans with a US$1 million investment in Maalexi, a UAE-based agritech startup. The announcement marks Stride Ventures' first venture debt investment in the GCC, and is expected to set the tone for a larger commitment by the firm in the region.
Maalexi, a risk management platform that helps small food and agri-businesses directly access cross-border trade, was founded in 2021 by Dr. Azam Pasha and Rohit Majhi. The startup is also headquartered in the American city of Delaware, but it has offices in in both Dubai and Abu Dhabi in the UAE.
It offers many critical risk management tools, including digital contracts, artificial intelligence (AI)-enabled inspections, as well as blockchain-authenticated documentation- all of which enable small and medium enterprise (SME) agri-buyers to procure food supplies faster, cheaper, and safer from globally located SME agri-producers and exporters.
With the new millon-dollar funding, Maalexi will aim to continue innovating across the global cross-border food and agricultural produce trading market, through boosting its operational capabilities and distributions across the region. "This debt capital raise from Stride Ventures will significantly enhance our ability to acquire new users and scale our operations, further solidifying our position as a leading digital risk management platform for SMEs engaged in cross-border trade," said Dr. Pasha in a statement. "We will use these funds to deploy cutting-edge technology solutions that streamline the movement of goods through our local and international warehouses and carriers, effectively mitigating key risks in international trade. Furthermore, this capital infusion will serve as a strategic lever, helping us acquire additional debt capital to expand our operations, and bolster food security across the UAE and the broader GCC region."
According to Apoorva Sharma, Managing Partner at Stride Ventures, the investment has been a reflection of her firm's confidence in Maalexi's vision, and it "aligns seamlessly with Stride Ventures' globalization strategy." But Sharma notes that this move has also been, by extension, a reaffirmation of Stride Ventures' commitment to being a sector-agnostic global investor with a key focus on supporting high-growth startups and companies in emerging markets. "At Stride Ventures, our primary focus is on backing category leaders and empowering entrepreneurs beyond just capital support," Sharma says. "As we continue our growth journey, we aim to become truly global, funding not only Indian companies expanding internationally but also local startups that are innovative leaders or emerging industry flag bearers in their respective regions. We seek startups with a strong understanding of their business, product-market fit, and a focus on growth while maintaining prudence. By providing venture debt under an entrepreneur-first approach and our institutional framework, we protect the interests of founders and help startups bridge funding gaps, extend their runway, and accelerate growth. This support has a transformative impact on their ability to scale, attract further investments, and achieve key milestones."
In its mission to help drive innovation in emerging economies, however, Stride Ventures has set aside a considerable amount of its focus towards companies that use technology to improve traditional industries. And as it stands, Sharma says there are quite a few traditional sectors in the GCC region that are not only ripe for technological innovation but also offer plenty of growth opportunities. "Agritech, payments tech, and cleantech are prime examples of industries experiencing significant tailwinds, including heavy adoption interest from end-consumers, strong government support, peak investor interest, and an increasing need to become efficient and digital," she adds. "For instance, the smart agriculture industry is predicted to reach $25.4 billion by 2028, presenting opportunities to enhance productivity and sustainability in food production through precision farming, smart irrigation, and supply chain optimization. Payments tech is another area with immense potential, as the GCC financial cards and payments market is projected to grow at a compound annual growth rate (CAGR) of around 11.2% during the forecast period 2023-28. Fintech solutions that simplify cross-border transactions and enhance security are highly sought after, especially those leveraging AI and machine learning within regulatory confines. Cleantech, expected to exceed $600 billion globally by 2030, offers opportunities in renewable energy solutions, waste management technologies, and energy-efficient systems, aligning well with the region's sustainability goals."
How then would Sharma advise GCC-based entrepreneurs to tap into such areas of tech innovation? "With robust macroeconomic factors, including substantial investments in infrastructure, the region offers a considerable total addressable market (TAM) across various sectors," she says. "So, from an investor's perspective, I would say entrepreneurs should prioritize opportunities with large TAMs and ensure there is a validated proof of concept before scaling. Understanding the supply chain dynamics in the GCC is crucial, and aligning innovations with government initiatives can provide additional support and incentives. By targeting efficiency and digital transformation within these traditional sectors, entrepreneurs can meet growing consumer demand and drive significant growth, positioning themselves as leaders in the evolving market landscape."
As an ending note, Sharma also shares some words for entrepreneurs to heed when it comes specifically to raising funds in the current business climate. "Firstly, do not chase growth at any cost," Sharma notes. "It is essential to preserve equity funds and ensure a prolonged runway. Secondly, do not hesitate to take minor haircuts on desired valuations, especially in the early stages. Valuation flexibility can make a significant difference in securing necessary capital. Thirdly, couple equity rounds with venture debt to extend the runway and ensure less founder dilution. Raising funds when it's not urgently needed can help ensure smoother fundraising processes and better terms."
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