Dubai's Arrow Capital sponsors $240m acquisition vehicle with US venture firm

Nasdaq-listed blank-cheque company is seeking technology companies that show 'inflection points in their growth trajectory'

The Dubai International Financial Centre Gate. Arrow Capital's headquarters is at the DIFC. Sarah Dea / The National

Dubai financial and investment advisory company Arrow Capital co-sponsored the listing of a $240 million special-purpose acquisition company, or Spac, to pursue merger opportunities in the technology sector.

The public float of Tribe Capital Growth Corp I, which listed on the Nasdaq stock exchange in New York last Thursday, was carried out in partnership with US venture capital firm Tribe Capital.

The Spac, or blank-cheque company, will give Arrow’s Middle East and South-East Asia investors greater access to opportunities in Silicon Valley companies and help them diversify their portfolios.

The blank-cheque company is seeking targets that show “inflection points in their growth trajectory”.

“The Spac, and our collaboration with Tribe, is a major milestone for our business and our investors,” said Arrow Capital founder and chief executive Rohit Nanani.

“In Tribe, we have a trusted partner right at the heart of Silicon Valley’s innovative technology ecosystem. We are very excited to be able to extend their expertise and insights to our network of investors in the region.”

Arrow Capital's headquarters is at the Dubai International Financial Centre and it has offices in Mauritius.

Spacs are listed companies without revenue-generating commercial operations. They are often formed to merge with private ventures seeking to go public.

The process is quicker and less costly than an initial public offering. A company that goes public by merging with a Spac also does not need to provide a prospectus.

Private ventures traditionally rely on venture capital or strategic investment for financing.

However, the growing popularity of Spacs has expanded their financing options.

The investment flows of blank-cheque companies, which first appeared in the 1990s, have grown 10-fold since 2019, with globally recognised investors such as SoftBank Group unveiling their own Spacs to invest in technology start-ups.

About 248 Spacs raised more than $83 billion last year alone, according to Bloomberg data. As of last Thursday, there were 210 blank-cheque company listings that had raised $68bn.

Listings through Spacs is becoming popular across the Middle East.

Last week, Anghami, Spotify's music-streaming rival in the Arab world, revealed plans to list on the Nasdaq after a merger with a blank-cheque company.

The successful completion of the deal with Vitas Media Acquisition Company will make Anghami the first technology company from the region to list in New York. The deal valued Anghami at $220m.

Saudi Arabia's Public Investment Fund-backed Lucid Motors also announced it will go public by merging with Churchill Capital IV Corporation Spac.

Arrow Capital said there were significant opportunities and economies of scale for technology investors in the Middle East.

Tribe co-founder Arjun Sethi said the Middle East had fast become an increasingly attractive marketplace.

“The region’s commitment to technology innovation, [the growing] community of entrepreneurs and infrastructure development have made it a hub for global trade and investment, and a valuable conduit into emerging markets.”