UNITED ARAB EMIRATES: SHUAA Capital psc (DFM: SHUAA) has launched SHUAA Venture Partners, a USD 250 million Shari’ah fund, focused on venture debt investments.
Commenting on the launch of the fund, Natasha Hannoun, Head of Debt at SHUAA Capital said: “SHUAA Venture Partners will provide alternative capital solutions to high growth companies across the GCC. We aim to support the growth of businesses, create jobs, lead further developments in innovation and technology, support economic diversification and guide founders towards realizing their vision. Our investors have the opportunity to diversify into a new asset class in technology, with a shorter investment horizon, frequent distributions and attractive financial returns”.
The fund is the largest venture debt fund in the GCC and has been established to support the growth of regional technology and technology-enabled leaders that are seeking alternative sources of funding without significantly diluting their shareholding.
The strategy was developed sharing the vision of the GCC’s regional goals of economic diversification and growth of the new economy.
Investments in growth companies throughout the GCC have been dominated by early stage transactions and investors, with few able to support businesses throughout their growth cycle.
As a result, several growth-stage companies have limited access to larger pools of capital and non-equity financial solutions; a gap which needs to be filled for new ventures to succeed.
The GCC has seen a staggering year on year increase of 112% in venture capital transactions, with total investments of over USD 1.7 billion across 281 deals, the majority of which have been early-stage investments; Angel, Seed, and Series A (80% of deal count and 45% of deal value). Venture debt regionally has increased 4.2x from 2020, with a total of USD 257 million deployed into 14 investments, indicating a clear demand for alternative funding sources.
SHUAA is the leading debt franchise in the region, with USD 545 million deployed in private debt transactions and USD 3 billion structured across multiple sectors over the last 11 years including technology.
Most recently, the USD 50 million investment in Pure Harvest and the PIPE funding for Anghami, which became the first Arab tech company to list on NASDAQ in New York, last month.