What's going on in the Qatari VC ecosystem?
September 2024 update
Eight months after the loud US $1B Fund of Funds (FoF) announcement by Qatar Investment Authority (QIA) at Web Summit Qatar last February, the buzz around Qatar's growing VC ecosystem has only intensified. But beyond the headline-grabbing announcements, what's really happening on the ground?
A recent Startup Grind Qatar event in Doha [Venture Capital Unplugged: The Ecosystem & Funding Blueprint] provided some answers. On stage, we had Michael Lints (Golden Gate Ventures), Alexander Wiedmer (Rasmal Ventures ), and Muhannad Taslaq Alchemist Doha) and the chat was moderated by Salman Surti.
The Impact of QIA's US$ 1B
The much-publicized QIA $1 billion FoF was undoubtedly a major moment for Qatar's ecosystem, but was it truly a turning point? According to Alexander Wiedmer, who has been in Qatar for over five years, the country's ecosystem had been evolving in the right direction long before this announcement. He emphasised that the ecosystem has become increasingly sophisticated over the past four years, not only since February.
Michael Lints, with his extensive experience in Singapore's VC scene, agreed, noting the parallels between Qatar's journey and Singapore's rise as a VC hub. He referenced Singapore's Technology Incubation Scheme (TIS), which attracted international funds to the region. Qatar's current trajectory, especially with the $1 billion injection, mirrors that growth and presents a unique opportunity to attract VCs committed to being on the ground and building the ecosystem.
New Funds and Investment Strategies
Rasmal VC and Golden Gate Ventures, now operating in Qatar, offered insights into their investment strategies. Rasmal, a Qatari-born fund, allocates 15-20% of its assets under management (AUM) to Qatar, 60% to the broader MENA region, and 20% to international deals. The fund is a generalist but focuses primarily on tech, with a preference for Series A companies.
Golden Gate Ventures, which originated in Singapore but is now operating also in Doha, focuses on B2B companies with strong product or tech components. While the fund is MENA-focused, it is not obligated to invest solely in Qatar. Michael shared that Golden Gate has a couple of open deals in the pipeline and is actively deploying capital so we might be expecting some first announcements soon 👀
Both VCs highlighted the collaborative nature of the VC space. Michael Lints shared that in his 15-year career, only two deals his fund backed were done independently, with no co-investment partners. This spirit of collaboration is expected to drive co-investments between Rasmal and Golden Gate Ventures.
The Role of Accelerators in MENA's Growth
The Alchemist Accelerator is making waves in Doha, aiming to attract global founders and foster a robust entrepreneurial community. Both Alex and Michael emphasised the importance of accelerators in their investment pipelines. However, they also noted that participation in an accelerator is not a must to get a VC investment.
That said, accelerators can add value to a startup's journey, often helping to fine-tune business models, build networks, and prepare for fundraising. The Alchemist's industry-agnostic approach ensures that founders from various sectors can benefit from the program and contribute to the ecosystem's growth.
The Angel Investment Scene in Qatar
Angel investors play a crucial role in Qatar's VC ecosystem. Alex highlighted the presence of strong angel investors in the region and the need for further development of this type of investment. Doha Tech Angels LLC is an excellent example of an angel network that has been a critical contributor to early-stage funding in Qatar. Given the wealth in Qatar, there is room for even more activity, and key institutions like Qatar Development Bank (QDB) are working to boost angel investment further. For example, QDB launched a training program for people interested in angel investing to help them make smarter investment decisions.
Michael added that serial entrepreneurs often transition into angel investing in mature ecosystems, and Qatar is likely to follow this pattern as its ecosystem continues to grow and mature.
The Role of Grants
Grants were briefly discussed during the panel. The key takeaway was that grant funding can benefit startups as long as strategic angels or early-stage VCs complement it. Standalone grants, however, might not be sufficient to sustain long-term growth.
Value-Add from Qatari-based VCs
Alex and Michael emphasised that their funds aim to back founders only if they can add value. While they didn't elaborate much on their specific value-add strategies, Alex mentioned Rasmal's "open-door" policy, which allows entrepreneurs to pitch their ideas and receive feedback, even if they aren't ready for investment.
Final Thoughts
The room at the Startup Grind event was packed with young entrepreneurs full of ideas and eager questions, showing just how exciting Qatar's tech scene is becoming. With more VCs, accelerators, and founders coming together in Doha, the entrepreneurial ecosystem is set to take off. The evening saw two announcements of new initiatives launched in Qatar: Alchemist Doha and the next wave of Qatar FinTech Hub.
Qatar's VC ecosystem may still be young, but the groundwork is being laid for something remarkable. With a collaborative investment environment, increasing angel activity, and new accelerators, the future looks promising. My hope is that as we continue to grow, we will see more diversity in the ecosystem and more female investors and entrepreneurs involved.
This post was previously published on Linkedin in September 2024