The Middle East Venture Partners (MEVP), a venture capital firm, and its billionaire shareholder, Mohamed Alabbar, have launched a US$250 million fund that will invest in emerging technology firms from the broader Middle East North Africa (Mena) region and Turkey.
The fund expects to raise at least $200m, if not the entire targeted amount within six months to a year from investors. The Middle East Venture Fund III is seeded by MEVP’s founding members and counts Mr Alabbar as an anchor investor, Walid Hanna, the chief executive of MEVP said at a press briefing in Dubai without elaborating the size of investments by Mr Alabbar.
The venture capital investments in Mena were less than 0.03 per cent of the GDP in 2016, significantly lower than 0.2 per cent in India and 0.4 per cent in the US. Billions of dollars in annual investments are required in the venture capital space to bring the Mena region, which has seen a significant rise in demand for technology products and services over the past few years, in line with other parts of the world.
“Digitisation is the way to go,” said Mr Alabbar, who is also the chairman of the UAE’s top listed real estate developer Emaar Properties. He added that the size of the venture capital industry in the region is too small and there is a big gap of investments when “you look at how internet savvy our young boys and girls are”.
The launch of the new fund follows the May announcement of Mr Alabbar taking a significant minority stake in MEVP. “We are somewhere close to 50-50,” Mr Alabbar said without disclosing the size of his investment when asked to specify his share in MEVP.
Mr Alabbar also backs the e-commerce platform Noon.com that is due to be launched this year, in a joint $1 billion investment with the Public Investment Fund of Saudi Arabia, as he targets the region’s rapidly changing online retail landscape.
The target size of $250m makes the new fund one of the few independent regional venture capital investment vehicles capable of committing large investments to meet the growth requirements of tech companies in the Mena region and Turkey. It has already backed one technology firm and identified a further 26 targets for investment, Mr Hanna said.
MEVP currently manages four regional technology-focused venture capital funds with more than $120m in assets under management and $100m in co-investments, spread across 40 portfolio companies in the broader Mena region.
The firm last week made an investment in the online travel marketplace Wego in exchange for an equity stake in the company. MEVP did not disclose the value of the investment or the size of stake it acquired in Wego, which provides travel search websites and mobile apps for travellers in the Asia Pacific and Middle East regions.
The venture, which was initially scheduled to go live in January and provide 20 million items for online shoppers, has seen some delays. It is expected to be formally launched this year and media reports on Tuesday suggested that it could be operational as early as next week.
Mr Alabbar today declined to say when Noon.com could go live.
