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Abu Dhabi venture capital firm Shorooq Partners has launched a $150 million fund to support early-stage start-ups operating in the Middle East, North Africa and Pakistan region.
Bedaya Fund II will mainly focus on backing start-ups that are active in FinTech, software, platform verticals and digital assets, the company said on Wednesday.
“We have always been early movers, be that [in] robo-advisory, crowdfunding, SME [small and medium enterprise] lending, open banking, card issuer processing [or others],” said Shane Shin, a founding partner at Shorooq Partners.
“We believe Web 3.0 models like DeFi [decentralised finance], NFT [non-fungible tokens], metaverse are going to be the key players in the next iteration of online business.”
Financial institutions and family offices across the region are backing Bedaya Fund II and include DisruptAD, Abu Dhabi holding company ADQ’s venture platform, Dubai Future District Fund and Bupa Insurance, among others, according to the company.
There has been an increasing focus on start-up funding in the Middle East and North Africa region.
Venture capital funding to Mena start-ups surged to $2.6 billion in 2021, start-up data platform Magnitt reported. The region’s most active markets – the UAE, Saudi Arabia and Egypt – each had a deal worth more than $100m.
Overall, the GCC registered a 112 per cent annual increase in venture capital transactions, with total investments of more than $1.7bn across 281 deals, the majority of which were early-stage investments; angel, seed, and Series A, according to data from Dubai investment bank Shuaa Capital.
Founded in 2017, Shorooq Partners has made more than 80 investments in 50 companies that currently have a gross equity value of $1.5bn, it said. The companies, which have created more than 5,000 jobs, include Pure Harvest Smart Farms, Trukker, Capiter, Lean Technologies, Sarwa, Lendo, NymCard, Breadfast, Airlift, Mozn and Aumet.
Shorooq Partners is backed by seven sovereign wealth funds and has a presence in six countries. Last year, it announced the first Middle East-focused venture debt fund series, Nahda Fund, to invest in regional start-ups.
In 2020, the Abu Dhabi Investment Office, which oversees the foreign direct investment and private sector development in the emirate, invested $5m in the Bedaya fund operated by Shorooq Partners to help develop the start-up ecosystem in the emirate.