COTU Ventures, a venture capital firm based in Dubai, has announced the success of its first fund with a whopping $54 million raised. The firm’s primary aim is to provide support to startups in the Middle East at their earliest stages, from pre-seed to seed. The final close for this fund occurred last year, and according to the firm’s founder and general partner, Amir Farha, COTU Ventures invests in the range of $500,000 to $1.5 million as initial checks.
“Today, businesses are lagging a bit behind, so there’s a huge opportunity to build software to help solve many of their problems. We are also interested in high-margin industries where technology can play a massive role and capitalize on margin efficiencies.”
Over the past two and a half years, COTU Ventures has actively invested in over 20 startups across various sectors in the GCC region, focusing primarily on the UAE and Saudi Arabia, with additional investments made in Egypt and Pakistan. Their statement outlines their investments in various sectors.
Farha revealed in an interview with TechCrunch that the firm has a slight inclination towards fintech and B2B software, but they are open to opportunities in other sectors as well. Some noteworthy companies that COTU Ventures has invested in include Huspy, a mortgage platform in the UAE, and Egypt’s MoneyHash.
Careem, the pioneer in the MENA and GCC startup scene, was one of Farha’s earliest investments as a VC at his previous firm, Beco Capital. After personally investing in startups in Europe, Farha returned to the Middle East and launched Beco Capital in 2012. He played a crucial role in the firm’s fundraising efforts for its first fund and second fund before founding COTU Ventures in 2021.
“The consumer wave happened with Careem and some other applications. Today, businesses are lagging a bit behind, so there’s a huge opportunity to build software to help solve many of their problems. We are also interested in high-margin industries where technology can play a massive role and capitalize on margin efficiencies,” said Farha, highlighting the potential for software solutions in various industries.
Farha reflected on the growth of venture capital investments in the GCC region, which has gone from $20 million in 2012 to over $2 billion in 2020. Beco Capital was actively involved in seed rounds ranging from a few hundred thousand dollars to Series B rounds of around $5 million before the ecosystem evolved to accommodate more substantial funds and bigger later-stage investments.
However, as Beco Capital shifted its focus towards later-stage investments, Farha saw a market gap for early-stage support. This realization led to his departure from the firm in 2021 and the launch of COTU Ventures, focused solely on early-stage investments. Farha believes that a founder’s early life experiences play a crucial role in their potential for success, and at COTU Ventures, candid conversations about these experiences are essential in building trust and a strong connection with founders.
This approach also enables COTU Ventures to provide strategic guidance on fundraising, organizational development, and go-to-market strategy. Additionally, the firm facilitates introductions to key stakeholders such as customers, hires, and potential follow-on investors, offering comprehensive support to its portfolio companies as they navigate Series A rounds and beyond.
“I love the chaos of the earlier stages where you’re discovering, experimenting and testing. Things look great, but one day, things look difficult, and then you are trying to help solve problems along the way. So that environment suits me as an investor well,” remarked Farha, emphasizing his passion for early-stage investments.
COTU Ventures’ limited partners include Lunate, Mubadala, Dubai Future District Fund, Arab Bank, Bupa KSA, and GPs from VCs, including Foundry Group, Tribe Capital, Stride, and several family offices. Sharif Elbadawi, CEO of Dubai Future District Fund, expressed his confidence in Amir and COTU Ventures, stating, “Our confidence in Amir stems from his deep passion for supporting founders and his proven ability to find remarkable investment opportunities before anyone else.”
