Quicktake: Wamda’s journey to a second fund
The Dubai venture capital firm is raising $70m to invest in technology businesses
Wamda is in the midst of launching its second $70 million fund, with a remit to invest in technology businesses, similar in terms of geography and sectors to what its previous vehicle that was created in 2015 did. So why is Wamda keen to continue investing in geographies as near as the Middle East and as far afield as Africa?
Here are some answers:
What is Wamda?
Wamda, Arabic for spark, started off as an investment platform in 2010 to help aspiring entrepreneurs in the Middle East and North Africa through mentoring, angel financing and web content. It formed with the motto: inspire, empower and connect.
It has been able to achieve many of its objectives, from the angel fund that preceded its VC firm that is chaired by Fadi Ghandour, the founder of courier company Aramex. The torch of mentoring also carries on with its Mix N’ Mentor event, and more recently Wamdx, a new fellowship programme that will offer aspiring entrepreneurs a grant of $16,000 along with in-kind support including a workspace in Dubai, and other cities in the future.
Why is Wamda launching a second fund?
Wamda sees the Middle East as a region hungry for VC investments and capable of providing high returns to investors.
Its view is shared by a number of players. For example, its stake in Dubai ride-hailing company Careem sits alongside investments from China’s answer to Uber, Didi Chuxing, Japanese e-commerce leader Rakuten, German car maker Daimler and Saudi billionaire Prince Alwaleed bin Talal’s Kingdom Holding. Wamda is not the only VC attracting interesting investors. Middle East Venture Partners, another investment platform, counts Emaar chairman Mohamed Alabbar as an investor with a significant undisclosed stake.
Why does Wamda want to focus more on Africa?
Wamda believes that Africa offers attractive returns despite the inherent risks associated with the region.
According to a survey of 60 limited partners around the globe conducted this year by the African Private Equity and Venture Capital Association, a majority of investors in funds, about 76 per cent, plan to increase or maintain their allocation to African private equity over the next three years. More than half of respondents - some 53 per cent - expect to increase their allocation to the continent, compared with 49 per cent for other emerging and frontier markets.
Correction: A previous version of this article incorrectly stated Abraaj was a founding entity of Wamda Capital. This reference has been removed.
Updated: December 26, 2018 11:14 AM