SHUAA Capital Launches $250M Venture Debt Fund
MENA’s asset management and investment banking platform SHUAA Capital has launched $250M venture debt fund.
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Dubai-based investment bank SHUAA Capital announced the launch of SHUAA Venture Partners, a $250M Shari’ah compliant fund, focused on venture debt investments.
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.
SHUAA Capital recently invested in UAE-based FinTech Souqalmal. The FinTech sector in MENA saw an exceptional turnout of investments across the region with 100+ deals. FinTech startups recorded a 183% YoY growth in funding last year, the highest yearly growth rate over the past five years. 32% of the total FinTech deals, and 49% of the funding across MENA in 2021 was focused in the UAE. MENA also saw the highest number of exits (4) by FinTech startups in a year. The biggest funding round was recorded by the UAE-based FinTech Tabby with $50M in Series B.
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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 $1.7B 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 $257M deployed into 14 investments, indicating a clear demand for alternative funding sources.
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”
SHUAA has $545M deployed in private debt transactions and $3B structured across multiple sectors over the last 11 years including technology. Most recently, the $50M 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.
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