Golden Gate Mena Fund 1 earmarks 10% for local firms

Golden Gate Ventures' $100mn Mena Fund I, the first global venture capital fund to be established and managed within Qatar, is looking at investing in at least a dozen local entities as it finds potential, especially in B2B fintechs, according to its top official.

The Mena (Middle East and North Africa) Fund 1, which is expected to be closed for subscription early next year, is aiming at robust double-digit returns to its investors, as has been the case with its Asia funds, its partner Michael Lints told Gulf Times in an interview.

Referring to its maiden Mena Fund 1 for which $20mn came from bigwigs in Qatar, he said: "We are very much on track at the moment" (to hit the target).

The first close of its $100mn Mena Fund I backed by the pillars of Qatar’s private business community represents a major step forward in Golden Gate Ventures’ ambitions to drive innovation and entrepreneurship in the region.

Al Khor Holding, Al Attiya Group and Sheikh Jassim bin Jabor al-Thani are the anchor investors for the fund, which has on-boarded a few of Golden Gate Ventures’ investors from its Asia funds.

Asked about the present status of the fund, Lints said: “We are closing it early next year, but we are already investing from it (the fund)."

The fund, which was unveiled at this year's Qatar Economic Forum, focuses on powering startups in key sectors such as alternative energy, green technology, B2B Artificial Intelligence, and energy-related deep tech. Other strategic sectors that the fund will cover include fintech, healthtech, and edtech, which will further Qatar’s economic diversification agenda.

Appreciative of the supportive (Qatar) government and the willingness of family offices to cooperate and invest; he said: “It has become a very conducive environment to not only be here, but put capital to work and then starting to invest.”

Golden Gate already has about nine companies (in its portfolio) that have expanded in the Mena region and two companies (from the portfolio) are now expanding in Qatar, according to him.

Although it is seeing slightly less companies now, he said, adding the situation ought to improve over the next few years.

"We are looking (at) at least a dozen companies that are coming from Qatar itself," he said, adding the fund combines the aggregate regional influence of its investors and the deep startup ecosystem development experience of Golden Gate Ventures spanning Silicon Valley and Asia.

Finding similarities in Mena and Southeast Asian regions; he said, "We do see a lot of opportunity. For us, it is a very natural expansion to be here in terms of the opportunity that we are seeing in the ecosystem."

Asserting that the group was prudent on the investments it makes; Lint said, "We always have IRR target that sits between 20% and 30% on each fund. That translates to about a 3 to 4 (times) on the money that people invest in the fund."

Asked within Mena region, which market it sees higher IRR potential; he said: "We want to be very evenly split across the market."

"There is a lot of potential for deals in the Mena region. Being in Qatar, we spend a lot of time in developing the market here as well. So hopefully we will see a few good deals in our portfolio from here," he added.

Highlighting that 10% of the fund will be invested in Qatar-grown startup companies; he said: "We are working very actively with the ecosystem here and trying to back those really good entrepreneurs."