Fuze, a digital assets infrastructure provider that is part of Abu Dhabi’s global tech ecosystem Hub71, has raised $14 million in seed funding as investors continue to bet on resilient sectors despite global economic headwinds.
The round was led by ADQ-backed investment company Further Ventures, along with participation by US-based venture capital fund and incubator Liberty City Ventures.
Fuze allows any bank, FinTech or traditional enterprise to offer regulated digital assets products to their customers through their native apps.
The funding will propel the start-up’s growth as it obtains regulatory licensing, adds hires in crucial roles, continues to expand its technological capabilities, and accelerates its geographic expansion across the region, according to a company statement on Wednesday.
“We are excited to build the future of regulated financial infrastructure and digital assets out of the UAE,” Fuze co-founder and chief executive Mohammed Yusuf said.
“Regulations have played a pivotal role in propelling the UAE into a central position within the global digital assets industry.”
Hub71, which is backed by the Abu Dhabi government and sovereign wealth fund Mubadala Investment Company, supports the growth and development of tech start-ups at all stages with incentives and access to investors, corporations, government entities and academic institutions.
Start-ups at the hub raised about Dh4.5 billion ($1.22 billion) in funding globally until the end of 2022, Ahmad Alwan, deputy chief executive of Hub71, told The National in March.
Hub71 more than doubled its start-up numbers to more than 200 last year, securing 41 deals with corporate partners worth Dh160 million, he said.
FinTech and e-commerce start-ups dominated venture capital financing in the Middle East and North Africa during the first half of this year, data platform Magnitt said in its H1 2023 MENA Venture Capital report.
Financing deals in both sectors propelled their weighting in the overall venture financing ecosystem, accounting for almost 80 per cent of the total funding in the region during the first six months of the year, the report found.
Fuze was founded last December and selected in June to join Hub71.
The start-up will benefit from the strategic capital and network of investors in the seed round, “acting as a catalyst for the business as it builds the digital asset infrastructure that will drive the future of finance”.
“We are building a suite of products that addresses the growing demand for regulated digital asset capabilities through trusted channels,” Mr Yusuf said.
The start-up’s solutions handle the complexities of blockchain and regulatory overheads for enterprises, enabling them to offer digital assets such as stablecoins, cryptocurrencies, central bank digital coins and tokenised assets.
A Further Ventures representative said the funding allocated to Fuze is an investment into digital assets.
“The team at Fuze is highly experienced and has a clear vision to develop a trusted, world-class digital assets proposition,” the representative said.
“Technology that enables a range of stakeholders is vital for the future of the financial ecosystem.”
Last September, Further Ventures launched a $200 million fund that will co-create and support business ventures.
The fund, anchored by Abu Dhabi holding company ADQ, will focus on building digital assets, FinTech and supply chain sector start-ups.
It is a “unique offering” out of Abu Dhabi for founders looking to build ventures in “frontier or regulated industries”, the company said at the time.
Beyond capital investment, the venture capital company has a dedicated team that provides legal and regulatory support, talent sourcing and recruitment, operations, and business development facilities.
It provides start-ups access to some of the largest organisations in the Mena region as well as venture builders globally, as part of Further’s extensive network.
Within the digital assets space, Further is targeting digital asset payment products, blockchain asset custody and security solutions, marketplaces and wallets among others.