The Dubai fund manager Shuaa Capital announced a launch of a $250 million Sharia fund to focus on ‘venture-debt instruments’. This fund will also be listed at Abu Dhabi’s ADGM and is claimed to be the biggest listed fund in the Gulf.
It will provide access to capital for “high growth companies across the GCC”. An area of focus will be venturing in the region’s technology space that is “seeking alternative sources of funding without significantly diluting their shareholding”.
The Gulf financial markets recorded a 112 percent rise in venture capital linked deals through the recent past, with investments of $1.7 billion across 281 transactions. The majority of these were for early-stage investments such as ‘angel’, ‘seed’, and Series A rounds. Venture debt regionally increased 4.2 times from 2020, with $257 million deployed into 14 investments, “indicating a clear demand for alternative funding sources”.
“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,” said, Natasha Hannoun, Head of Debt at SHUAA Capital. “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”
In the last 11 years, Shuaa reported that it has invested $545 million in private debt transactions and $3 billion across multiple sectors. Recently, they also invested $50 million in Pure Harvest and a ‘PIPE funding for Anghami.
- Investments in ‘growth companies’ across the GCC have been dominated by early-stage transactions and investors. Few have been 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. This gap needs to be filled for new ventures to succeed, according to Shuaa Capital.
