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Qatar Investment Authority has committed nearly half of its $1 billion Fund of Funds program to draw six venture capital firms to establish their regional headquarters in the country, a top official in the sovereign wealth fund told Semafor.
The initiative was launched following a three-year government study aimed at addressing a funding gap for startups looking to scale in the gas-rich country. “There is sufficient capital today in Qatar for early stage, pre-seed, and even seed rounds, but it’s at Series A to Series B, C, that’s where there’s a funding gap,” Mohsin Pirzada, QIA’s head of funds investment, said in an interview at Web Summit Qatar.
QIA, which manages more than $500 billion, is willing to forgo some of the financial returns it would typically seek from foreign venture capital investments to help create jobs, develop future technologies, and strengthen key sectors such as renewables, artificial intelligence, and food security, Pirzada said. “This is not just a case of throwing capital at the problem. It’s about engaging with both public and private stakeholders to kickstart this ecosystem.”
The program has received over 120 applications so far, with six firms committing to setting up in Doha. QIA is in the advanced stages of evaluating eight more proposals, Pirzada said.
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One of the funds receiving QIA backing is London-based UTOPIA Capital Management, which manages $200 million in funds targeting early-stage startups in Southeast Asia, Africa, and the Middle East. Managing partner Alina Truhina said the firm’s Doha-based fund will invest in fintech, e-commerce, health tech, logistics, and agri-tech, with a focus on bringing startups from other markets to Qatar.
UTOPIA’s Middle East fund has raised $40 million so far and plans to invest up to $850,000 in early-stage companies, she said. It is currently conducting due diligence on a Qatari health tech startup founded by a Tunisian entrepreneur who plans to expand into Africa. “As an emerging markets platform of funds, we are sitting here in Qatar but bringing innovation across markets,” she said.
QIA has also committed multimillion-dollar investments to firms such as San Francisco-based Builders VC and B Capital, which is backed by Facebook co-founder Eduardo Saverin.
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Qatar is cutting business fees and offering incentives to attract investors and startups. The Qatar Financial Centre has reduced application fees for licensing by 90%, while government officials are revising business regulations, including bankruptcy and public-private partnership laws, in an effort to reverse foreign investment outflows.
The UAE and Saudi Arabia are also offering incentives to attract fund managers and technology companies. Many foreign firms have established headquarters in Abu Dhabi, Dubai, and Riyadh to be closer to the region’s growing economies — and the nearly $4 trillion pool of sovereign wealth in the Gulf.