Abu Dhabi Investment Office expands scope of Ventures Fund

Fund to participate in Series B financing rounds, invest in established regional and global funds and partner with global accelerators

Abu Dhabi Investment Office is investment in AgTech companies is expected to create hundreds of high-skilled jobs over the next three years. Victor Besa / The National.

Abu Dhabi Investment Office will widen the scope of its Ventures Fund to include more innovation-focused companies as part of government efforts to attract high-skilled talent and investment to the emirate.

The Ventures Fund will now participate in late Series B financing rounds and higher, invest in established regional and global funds and partner with global accelerators, state-run Adio said in a statement on Wednesday. The Series B investment amount is defined by the start-up itself and varies from one company to another. The idea is to pursue opportunities to support not only young start-ups, but also later-stage companies with plans to expand.

"After consultation with the private sector, we realised that in order to accomplish our goal to expand innovation in Abu Dhabi, we needed to be more flexible and offer investment in different levels," Tariq Bin Hendi, director general of Adio, told The National. "There's a very healthy pipeline of transactions in the short-term."

Adio's Dh535 million Ventures Fund was opened in May 2019 as an initiative under the government's three-year, Dh50 billion Ghadan 21 programme aimed at stimulating the emirate's economy. Adio has already invested over Dh60m in several start-ups and a fund manager through its Ventures Fund. The government entity invested in technology firms Securrency, Trukker, Sarwa, YACOB and Okadoc — all of which are either based in Abu Dhabi or are expanding into the emirate. Now it is broadening its scope beyond start-ups and new fund managers.

To support later-stage companies, Adio's fund will expand to include investments in Series B rounds and higher, assess opportunities to act as a lead investor and create customised incentive packages to back their growth.

The Venture Fund will now also invest as a "limited partner" through established global funds that are investing in innovation-focused companies in the Middle East and North Africa region and through partnerships with global accelerators.

"You have large investment platforms in the Mena region with substantial portfolios … we’re saying come to Abu Dhabi and we will invest with you in those companies and help them establish in Abu Dhabi."

Asked whether the fund's expansion will include an increase in its Dh535 investment size, Mr Bin Hendi said: "We look at it from a holistic approach and assess demand, we haven't put a limit on the size of the Ventures Fund, right now we are focused on deploying capital and expanding based on demand."

Ventures Fund is currently still assessing new deals in the pipeline, which could be finalised by the second quarter, Mr Bin Hendi said, declining to disclose details.

"We have a pipeline of firms that applied to programme, and we're in late stages of agreeing terms them," he said. "Some are start-ups, some are existing businesses that want to come to Abu Dhabi."

The Fund's focus on innovative companies also spans the fields of Artificial Intelligence, robotics and advanced technology as it tries to attract high-tech firms to the emirate.

"We want to make sure Abu Dhabi is recognised as a testing-ground for technology," Mr Bin Hendi said. "We are as interested in small disruptive start-ups as we are in Fortune 500 companies."

Ventures Fund has seen a "lot of success" with start-ups who need support and interest from the bigger companies, though talks take longer with the latter, he said.

Departments across Abu Dhabi government have collaborated to unify their message to the private sector about the opportunities and incentives available in the emirate, according to the state official.

"Engagement between the public and private sector has improved dramatically," he said.