Qatar's venture capital ecosystem outlook 'positive': Pulsar

Qatar's venture capital (VC) ecosystem's outlook is "positive" this year and Qatar Sportstech Accelerator has invested as much as $40,000 to $250,000 in several startups at the seed and pre-seed stages, according to Pulsar VC, an international platform that supports entrepreneurs and investors to grow global technology leaders.

"Expectations for 2024 are more positive, especially with the launch of Qatar's first VC fund of $1bn, aimed at energising the regional startup scene," Pulsar VC said in its latest report.

This fund plans to invest mostly through other VC funds while also engaging in select co-investments with those funds, it said, adding the country also introduced its Startup Qatar Investment Programme, supported by a $100mn fund managed by the Qatar Development Bank, further boosting the entrepreneurial environment.

The Qatar Business Incubation Center and the QDB emerged as the most prominent investors of the year, actively participating in deals throughout 2023, it said, highlighting that the year also marked the debut of Rasmal Ventures, the first independent VC firm in Qatar.

The country's biggest funding rounds in 2023 included Snnonu, which raised $12mn; else ($4.1mn); AT-HOME-DOC ($1.9mn); C-Wallet ($1.1mn); and Muallemi ($0.55mn), the report said, adding of the 2023 funding rounds, 37% went ton manufacturing, 15% to fintech or financial technology and 12% in healthcare.

Terming 2023 as a "difficult" year for Qatar’s startup ecosystem with it experiencing the lowest venture investments in terms of deal numbers seen in the past four years; it said the 61% decline in Qatar reflects wider patterns as the Middle East and North Africa or Mena region saw a 23% drop in investment and the global VC environment faced a 42% reduction.

Highlighting that Qatar's sports industry has witnessed remarkable growth, particularly as the host of 2022 FIFA World Cup, and is slated to reach a market size of $3.7bn by 2025; Pulsar said the country has introduced the regional first sports business district 'Aspire Zone' aiming to bolster its position as a burgeoning international hub for sports business.

According to the available deal information, the Qatar SportsTech accelerator has invested in several startups at the seed and pre-seed stages, with investments amounts ranging from $40,000 to $250,000.

The accelerator has reportedly invested in Golazzos, a social platform for football sports predictions; Fancision, a blockchain-based app to engage and monetise football fans with trivias and minigames; and Classtap, a platform that provides access to multiple gyms through one membership.

Qatar has been progressively building a more inviting business environment, striving to attract investors by aligning its commercial and tax systems with global standards such as those of the OECD or the Organisation for Economic Co-operation and Development.

The report said similar to its Gulf Co-operation Council or GCC partners, Qatar aims to broaden its economic base and investing in cutting-edge economic sectors.

As much as 37% of VC is allocated to the industrial and manufacturing sector with fintech and healthtech following as the second and third most favoured areas for capital investment respectively, it added.

Qatar has significantly enhanced its appeal to foreign investors by developing specialised zones such as the Qatar Financial Centre, Qatar Science and Technology Park and Qatar Media City, which offer beneficial tax and labour conditions. Additionally, through the foreign investment law, overseas investors can avoid the typical 49% ownership restriction and requirement for minimum capital in limited liability companies with foreign involvement has been eliminated.

"These improvements aim to so simplify business operations and make Qatar a more attractive investment destination," the report said.