Qatar Investment Authority (QIA) plans to introduce Qatar’s inaugural venture capital (VC) Fund of Funds, an investment program aimed at fostering innovation in the country. The Fund of Funds initiative will allocate over $1 billion to international and regional venture capital funds.
QIA to launch USD 1 billion Fund of Funds venture capital program. Qatar’s first venture capital Fund of Funds will close a funding gap for local and regional entrepreneurs.
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— Qatar Investment Authority (@QatarQIA) February 26, 2024
Market-level commercial returns
QIA stated that the program has two primary objectives. Firstly, it aims to generate market-level commercial returns in accordance with QIA’s mandate of securing sustainable, long-term returns for the people of Qatar. Additionally, it seeks to promote the sustainable development of a thriving VC and startup ecosystem, aligning with Qatar’s National Development Strategy (NDS3), which aims to increase the number of startups and the availability of VC funding in the local market.
Fostering a thriving VC community
The program’s focus will be on attracting prominent international VC funds and entrepreneurs to Qatar and the broader GCC region. This will contribute to the growth of a local and regional community of venture capitalists and founders, bringing in deep expertise in VC and startups.
With a priority on the technology sector, including fintech and edtech, as well as healthcare, the program will primarily invest indirectly through other VC funds. However, it will also have the ability to make targeted co-investments alongside participating funds. It’s important to note that the Fund of Funds program will exclusively invest in VC funds and will not allocate capital to private equity, debt, or any other types of funds.
The program aims to bridge the current funding gap for local and regional entrepreneurs, making significant progress in this regard.
Addressing funding gap for growing companies
Mansoor Ebrahim Al Mahmoud, CEO of QIA, highlighted the significance of the program, noting that Qatar currently lacks a dedicated capital pool for companies in need of funding beyond the initial seed stage. He emphasized the fundamental role of establishing a well-connected startup ecosystem network in Qatar as a means to diversify the country’s economic foundation in the long run.
He added that QIA is initiating this program to facilitate access to capital and support from VC funds for innovative businesses. The aim is to enable these businesses to effectively scale their operations, expand their market presence in Qatar, across the GCC, and ultimately on the international stage.
Fund managers seeking to raise funds will need to demonstrate a strong track record, including consistent and robust commercial performance. They will also be expected to exhibit a commitment to Qatar and actively participate in the GCC VC and startup ecosystem. This may involve establishing an operational presence in Qatar, highlighting plans for organic expansion throughout the GCC, and establishing a senior-level presence in Qatar.
Maximizing synergies through collaboration
The program will include international, regional, and emerging local fund managers, in line with its dual investment mandate. Close collaboration with the broader VC and startup ecosystem in Qatar will be prioritized to maximize synergies and support VC funds in their involvement in various initiatives.
The statement underlined that this strategic initiative will accelerate the development of Qatar’s venture capital ecosystem by providing financial resources while incorporating global best practices and networks into the local market.
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