The Dubai-based venture capital firm Wamda Capital is weighing launching a second and bigger fund with a wider geographic scope, depending on the deployment of its first US$75million fund, its managing director said.
“We are certainly thinking about our growth strategy and how do we get to the second fund,” said Khaled Talhouni. “It may have a slightly broader geographic mandate – more Turkey and more areas close to Mena that have similar kind of attributes economically speaking and digital landscape to Mena.”
The launch of the second fund will depend on the deployment of the $75m Mena Ventures I, which is expected to have its second closing within the next six months.
The fund’s investors include the World Bank’s financing arm, the International Finance Corporation, the Dubai-based private equity firm Abraaj Group, and the Kuwait telecoms company Zain Group.
Wamda is expecting to invest in 10 to 20 companies this year as part of the first fund after investing in 10 companies last year.
Wamda typically invests up to $5m in a single technology company that has growing revenue in the region.
“There are great opportunities in the market today for a multi-stage, multi-sector fund,” said Mr Talhouni.
Among its investments are stakes in Careem, a taxi-hailing service that competes with Uber; Mumzworld, an e-commerce site selling products for mothers; and Jamalon, an online Arabic bookstore.
Wamda invests in three categories – content, financial technology and marketplaces, and commerce. It is considering broadening its investment remit to include business-to-business (B2B) segments.
Wamda expects small and medium-sized companies, particularly in e-commerce to perform well despite the economic slowdown in the region.
“I think, in general, a slowdown in the economy will only accelerate online because online gives you the opportunity to chase the best deal,” said Mr Talhouni.
“As people become cash-conscious or price conscious, I think price comparison online will help drive retail online more and more, and so will retailers start to distribute more online just because they can reduce the pressure of the physical space of rent, or big showroom.”
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