QIA announces new $1Bn fund of funds, to invest in regional and international VCs

Qatar Investment Authority (QIA), the country’s sovereign wealth fund and world’s second largest, has announced a significant initiative aimed at bolstering the nation’s venture capital ecosystem. This initiative takes the form of a $1 billion “Fund of Funds” program, marking a first-of-its-kind endeavor in the region and driving investments in international and regional venture capital funds alike.

One of the program’s crucial aims is to address a critical gap in the current funding landscape. As noted by QIA CEO HE Mansoor Ebrahim Al-Mahmoud, “There is currently no dedicated pool of capital in Qatar for companies that are past seed funding and are ready for Series A to Series C funding rounds. Building a well-connected start-up ecosystem network in Qatar is fundamental to diversifying the country’s economic base in the long term. QIA is launching this program to help ensure that innovative businesses can readily access capital and support from VC funds, enabling them to scale operations and expand market presence in Qatar, across the GCC, and ultimately onto the international stage.” This program aims to bridge this gap by providing access to the necessary capital for promising startups to scale their operations and establish a regional or even international presence. Additionally, the program seeks to attract leading international VC funds and entrepreneurs, not only to Qatar but also to the wider Gulf Cooperation Council (GCC) region.

Furthermore, QIA’s newest initiative is set to channel investments indirectly through other venture capital funds, while also enabling targeted co-investments with participating funds. Fund managers seeking investments will be required to demonstrate a solid track record of commercial performance and a commitment to actively contribute to the GCC venture capital and startup ecosystem. Key commitments may include establishing an operational presence in Qatar, outlining expansion plans across the GCC, and maintaining a senior-level presence in the country.

The access to capital can empower startups to scale their operations and compete on a regional and international scale, enabling the program to address a critical bottleneck hindering the growth of promising ventures in Qatar. Should the program successfully attract international VC funds and entrepreneurs, it could also lead to an influx of talent, expertise, and best practices into the Qatari VC ecosystem. Furthermore, by attracting international VC funds and fostering domestic talent, Qatar has the potential to establish itself as a regional hub for VC activity and technological advancement – something that could position Qatar as a magnet for talented entrepreneurs and investors.

The investment is currently driven by two key objectives. Firstly, it seeks to generate market-competitive returns for QIA, aligning with its mandate to ensure long-term financial sustainability for Qatar. Secondly, and perhaps equally importantly, it aims to contribute to the sustainable development of a vibrant venture capital (VC) and startup ecosystem in Qatar, in line with the country’s National Development Strategy (NDS3). It will also prioritize investments in the technology sector, with particular emphasis on areas like fintech, edtech, and healthcare.

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