Modus Capital launches MODUS MENA VENTURE FUND I, a USD $75 Million Fund targeting Early and Growth Stage Companies
Modus Capital, a New York-based hybrid venture capital firm, announces the launch of its first regional fund, MODUS MENA VENTURE FUND I (MMVFI), a USD $75 Million fund targeting early and growth stage companies across the Middle East and North Africa. The versatile fund is adaptable for a range of industries and structured to invest across asset stages from early to lower-mid market. The fund will invest in companies that have strong positive social impact as a by-product, including those with a focus on women and financial inclusion, health, education, and battling unemployment. Strengthening Modus Capital’s commitment to the region, the first investment from the fund was made in Q4 2018 complemented with the launch of the Egypt office in November.
The MODUS MENA VENTURE FUND I will focus on MENA-based early stage/post-accelerator technology companies as well as Small-to-Medium Enterprises (SMEs) where technology can enable them to grow rapidly. The asset allocation by stage serves as a major de-risking measure to Limited Partners as more mature companies carry significantly less risk. The fund also includes an allocation for US based companies that are portable to the MENA region.
Modus Capital is making investments through an incubation program starting from USD $50,000 to $250,000, and up to $1 million for Seed and Series A rounds. The verticals that the firm has particular interest include FinTech, HealthTech, Direct to Consumer e-commerce, Enterprise & Consumer SaaS products in addition to products leveraging Blockchain Protocols.
Modus Capital is developing the regional ecosystem by investing in startups across the Middle East and North Africa, launching regional co-working spaces, and curriculum-based series of programs and workshops that focus on knowledge transfer addressing local entrepreneurial challenges and skills gaps. The firm also has plans to expand the same model to other countries in the region, with plans for establishment in the GCC in Q1 of 2020. In addition to Modus Capital, the group has launched Modus Operations, Modus Events and the Modus Collective, offering a 360° approach and structure to nurture startups and foster their growth and success.
Modus Operations will develop, operate, and grow companies by providing holistic support throughout their various stages of growth. The operations teams consist of marketers, product managers, growth hackers, operators, strategists, designers, and technical developers. Modus Events will organize highly focused workshops and other events with the aim of facilitating knowledge transfer and encouraging collaboration among different stakeholders of the ecosystem. The Modus Collective will create collaborative co-working spaces, with plans to inaugurate the concept in Cairo & Dubai in mid-2020. The firm plans to set up several co-working spaces across the region with the expansion of the business to other countries.
“We actively assist entrepreneurs in building transformational businesses by not only investing in them, but also partnering with them to create the most effective strategies to take their company to the next level. We allow investors to participate in high-value, high-growth opportunities while operationally supporting entrepreneurs and guide them with our seasoned experts, propelling them to realize their goals. We believe that institutional investors like Modus Capital have a responsibility to provide more than just funding to their portfolio companies and now is the right time to offer an all-inclusive solution, harnessing the global expertise for a dynamic MENA market,” Kareem Elsirafy, Founder and Managing Partner of Modus Capital commented.
The fund has built its portfolio with 8 companies in its first year (2019) deploying their proven operational frameworks via Modus Operations which serves as yet another de-risking measure. The hands-on approach helps companies avoid first timer mistakes, be more capital efficient, and in-turn, mature and exit in a shorter time frame. Notable investments include:
DXwand is an AI driven Cognitive CRM software that automatically responds to businesses communications through various social channels, converting chats into proprietary insights and analytics further supporting data driven business and growth decisions. Since its launch in 2018, DXwand solution responded to over 1 Million human chats in English, and the distinctive Egyptian and Gulf Arabic dialects and slang supporting more than 37 enterprise customers in their growth journey. With the support of Modus Operations, DXwand has since seen month-on-month growth of 28%, and reached its financial breakeven point in September 2019. (https://dxwand.com/)
iSupportCause, an online platform launched from the United Arab Emirates in 2015, that helps create meaningful campaigns with integrated social media marketing for activists and NGO’s aiming to raise awareness on significant causes. $75,000 from the MMVFI has been invested in iSupportCause and for the last seven months, Modus Operations, the operational arm of Modus Capital, has been cultivating the product suite development and growth strategy. A revised product is scheduled to roll out in Q1 of 2020. (https://www.isupportcause.com/)
Arbor was founded as an App that lets you create, share, and manage your network in an efficient and green way. It addressed the opportunity of simplifying the process of exchanging valuable contact details that are typically on a business card in a modern and digitized manner. With a staggering number of business cards printed on average annually, (estimated at 27 Million), Arbor lets users exchange business cards with anyone, anywhere, and at any time without the traditionally associated cost to the environment while providing a streamlined workflow currently inefficient when attending meetings and events. Arbor partnered with Modus Capital to streamline the UX/UI and to utilize Modus’ expertise to create a growing and sustainable business model.
Yumzy, an app where home and professional chefs can receive tips for their culinary masterpieces. In a time where video is the leading medium for content creation and distribution, Yumzy empowers culinary artists to share and monetize their recipes through a dedicated mobile platform. The Yumzy founders approached Modus to help them define and MVP and go-to-market strategy in early 2019. Since then, Modus Operations has not only supported those efforts, but also built the application which is set to launch in early 2020. (https://yumzyapp.com/)
With the oil rich governments investing heavily in private sector development through national programs such as Saudi Vision 2030, Dubai 2020 and 2070, while Foreign Direct Investments are bullish on frontier markets such as Egypt, Jordan, and Lebanon, Modus Capital is on track and working with individuals and entities including government initiatives to invest further in materializing a vibrant and sustainable venture ecosystem in the region.