Nuwa Capital, a venture capital firm based in Dubai and Riyadh, aims to close a $100 million fund by the end of this year as it looks to invest in the rapidly growing number of start-ups in the Middle East.
The firm completed the first close of its Nuwa Ventures Fund I after raising three quarters of its target despite coronavirus-induced challenges.
“The first close [was] much faster than anticipated ... our original plan was to close in up to two years, but it was reduced to half,” said managing partner Khaled Talhouni, who founded Nuwa Capital with Sarah Abu Risheh and Stephanie Prince.
“Things were delayed during the first three months until May ... as markets were closed and we were unable to meet potential start-ups and investors," he said.
"After that things picked up very fast as everybody’s emphasis was on technology and digital during the pandemic.”
Founded in February last year, Nuwa Capital’s launch coincided with the spread of the Covid-19 pandemic around the world.
The venture capital firm is among many looking to invest in start-ups tapping into a technology boom fuelled by the pandemic.
Start-ups in the Mena region attracted a record $1bn in funding last year, according to data platform Magnitt.
“We have been operating in this space for about a decade and continue to see new models emerge and further blur the lines between technology and non-technology,” said Ms Abu Risheh, one of the partners.
“We will be witnessing more pronounced changes across the regional ecosystem and seeing more start-ups reaching escape velocity.”
Nuwa is focused on the rapidly growing Mena region, Sub-Saharan Africa and countries such as Turkey and Pakistan. The company, whose anchor investor is Saudi Arabia-based Al Faisaliah Group, has 10 backers.
It has joined forces with large groups and family offices that are leaders in various industries such as health care, pharmaceutical and property, said Ms Abu Risheh.
The fund also launched the Nuwa Network, which connects founders, investors and operational experts, to help start-ups scale up and expand as they navigate market challenges.
Nuwa supports founders and companies it invests in through a network of operating partners.
It connects the fund’s investors and limited partners, particularly corporate investors, with potential start-ups.
“Although we expected a delay given the challenging economic climate and limited travel, we have been able to build the right partnerships and finalise our first close in under a year,” said partner Ms Prince.
“With a distinguished community of LPs [limited partners] ... we are able to scale up value creation and offer both strategic and operational support.”
Nuwa has already invested in regional companies such as Dubai-based online eyewear retailer Eyewa, FinTech start-up Flexxpay and Cairo-based furniture marketplace Homzmart.
It is set to announce further investments in the coming weeks.
“As a firm, we will be constantly raising funds ... our immediate focus is on raising the remaining 25 per cent. We also co-invest a lot and like to work with other investors,” said Mr Talhouni.