Qatar Allegedly Allocates $100 Million for Startup Ventures

TechCrunch has learned that the program, known as the “Startup Qatar Investment Program,” is backed by a Qatar Development Bank (QDB)-managed $100 million fund. Like most venture ecosystems, several of these requirements are mandated by limited partners, primarily sovereign wealth funds, in the Gulf upon these venture capital firms. Just last week, Qatar’s sovereign wealth fund unveiled a $1 billion venture capital fund of funds dedicated to international and regional venture capital funds. For Qatar, launching its fund of funds and startup program signifies a crucial step toward developing its tech ecosystem to rival its neighbors, Saudi Arabia and the UAE. Last year, the MENA region experienced a 23% decline in venture capital activity compared to the global average of 42%.

Qatar has officially launched its startup investment program at the recent Web Summit, utilizing its development bank to make the significant announcement. The initiative has set its sights on attracting both early-stage and growth companies within the technology sector to establish or expand their operations within the country. According to TechCrunch, the program, referred to as the “Startup Qatar Investment Program,” has been provided with $100 million in funding through the Qatar Development Bank (QDB).

QDB has announced plans to offer startups with up to $500,000 in financial support to establish a presence within Qatar and up to $5 million for growth-stage companies looking to expand their operations in the Middle Eastern country. In addition to the financial aid, selected startups will also have access to markets and expertise through the development bank. As stated on their website, the program targets startups within a diverse range of industries, including fintech, cleantech, agritech, B2B SaaS, healthtech, marketplaces, proptech, AI & ML, and robotics.

“QDB is intensifying its efforts to position Qatar as a prominent player in the startup industry, particularly within the vital technology sector,” stated QDB CEO Mr. Abdulrahman bin Hesham Al Sowaidi. “Through this program, we aim to attract and retain talented individuals from various fields to support our entrepreneurship ecosystem, promote innovation, and accelerate technology adoption across all sectors. Ultimately, this will contribute to a sustainable and business-friendly economy,” Al Sowaidi added.

Qatar’s startup program follows a similar model utilized by venture firms like Alpha Wave Global in the United States. The firm manages a $300 million early-stage fund, Alpha Wave Incubation, anchored by ADQ, one of Abu Dhabi’s sovereign wealth funds. Across the Gulf Cooperation Council (GCC), other venture funds have stipulated that startups from outside the region must establish a “second” headquarters or office within their areas to receive funding and additional business benefits. These offices often serve as bases for expanding operations across the MENA and GCC regions.

“Like many other venture ecosystems, several of the requirements are established by limited partners, primarily sovereign wealth funds within the Gulf,” highlighted the article.

Qatar’s sovereign wealth fund also made headlines recently by announcing a $1 billion venture capital fund of funds dedicated to both international and regional venture capital funds.

For Qatar, the launch of this fund of funds and startup program marks a crucial step in developing its technology ecosystem to compete with its neighboring countries, Saudi Arabia and the UAE. This urgency is due to data from emerging markets data tracker Magnitt, which shows that Qatar only accounted for 6% of deals across the MENA region last year, with venture capital investment in its startups totalling just 43 million Qatari riyal (~$11 million) in 2023. In contrast, Saudi Arabia holds 52% of the region’s deals, while the UAE dominates in terms of deal volume.

Despite the competition, it ultimately works in the region’s favor. Last year, the MENA region experienced a decline of 23% in venture capital activity, compared to the global average of 42%. In light of this, Qatar’s increased involvement in venture capital through its sovereign wealth fund and development bank paints a promising outlook for the broader region, where 55% of investors involved in backing startups last year were local.

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Max Chen

Max Chen is an AI expert and journalist with a focus on the ethical and societal implications of emerging technologies. He has a background in computer science and is known for his clear and concise writing on complex technical topics. He has also written extensively on the potential risks and benefits of AI, and is a frequent speaker on the subject at industry conferences and events.

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