Badr Jafar, chief executive of Crescent Enterprises, which has invested in various sectors such as FinTech, EnergyTech, FoodTech and Enterprise SaaS. Courtesy Crescent Enterprises
Badr Jafar, chief executive of Crescent Enterprises, which has invested in various sectors such as FinTech, EnergyTech, FoodTech and Enterprise SaaS. Courtesy Crescent Enterprises
Badr Jafar, chief executive of Crescent Enterprises, which has invested in various sectors such as FinTech, EnergyTech, FoodTech and Enterprise SaaS. Courtesy Crescent Enterprises
Badr Jafar, chief executive of Crescent Enterprises, which has invested in various sectors such as FinTech, EnergyTech, FoodTech and Enterprise SaaS. Courtesy Crescent Enterprises

Technology

Sharjah’s Crescent Enterprises plans to invest Dh1bn in start-ups by 2022

The company's venture capital arm has invested more than Dh500m in 32 companies and funds across Mena, the US, India and South-East Asia since 2017

Alkesh Sharma
Alkesh Sharma

May 09, 2021

  • English
  • Arabic

CE-Ventures, the venture capital arm of Sharjah-based conglomerate Crescent Enterprises, plans to invest Dh1 billion ($272 million) in start-ups by 2022.

The company has invested more than Dh500m in 32 start-ups and VC funds across the Middle East and North Africa region, the US, India and South-East Asia since its inception in 2017.

“Our commitment to double down on new funds available for venture investment is testament to our conviction in the major social and economic impact of certain high-growth, tech-enabled businesses,” Badr Jafar, chief executive of Crescent Enterprises, said.

“We will strive to continue to partner with brilliant entrepreneurs across the Mena region and elsewhere … especially where we can leverage our operational experience and global market presence to help them scale and thrive, creating jobs and opportunities.”

CE-Ventures has invested in various sectors such as FinTech, EnergyTech, FoodTech and Enterprise SaaS (software-as-a-service) companies. Over the past few months, it has amassed stakes in companies including Tarabut Gateway, Hippo Insurance, China Union Pay, Nerdwallet and Turtlemint.

Venture capital investments are growing as companies tap into post-pandemic opportunities. Globally, VC investments in the first quarter of this year grew 94 per cent annually to $125bn , according to Crunchbase data.

Unlike institutional VC vehicles that raise external funds to make investments, CE-Ventures works as a partner with start-ups and invests its own capital across various stages of growth with a focus on early- to growth-stage companies, the company said.

It also helps global companies to expand into the Mena region and local start-ups to venture into overseas markets. Investee companies under CE-Ventures have so far raised more than Dh3.6bn of follow-on funding from top-tier venture funds globally.

“Despite the pandemic and ensuing economic slowdown, investee companies under CE-Ventures have continued to thrive,” Tushar Singhvi, deputy chief executive and head of investments at Crescent Enterprises, said.

Crescent Enterprises, which operates under four platforms – CE-Operates, CE-Invests, CE-Ventures and CE-Creates – is present in diverse sectors such as ports and logistics, power and engineering, food and beverage and green transport. It works across different verticals including private equity, venture capital and business incubation.

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What are NFTs?

Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.

You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”

However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad. 

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Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)

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Manchester United 1 (Rashford 36')

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Man of the match: Marcus Rashford (Manchester United)

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