Qatar reportedly has a $100M fund for startups | TechCrunch

Qatar unveiled its startup investment program at the recent Web Summit through its development bank. The program aims to attract seed and growth-stage tech companies seeking to establish or expand operations within the country. 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.

In a statement, QDB revealed that the program will offer funding of up to $500,000 for early-stage startups looking to establish a presence in Qatar, and up to $5 million for growth-stage companies seeking to expand their operations in the Middle Eastern country. Additionally, the development bank highlighted that apart from financial support, it will provide portfolio startups access to markets and expertise. As stated on its website, the program targets startups in over fifteen sectors, including fintech, cleantech, agritech, B2B SaaS, healthtech, marketplaces, proptech, AI & ML, and robotics.

“QDB is intensifying its efforts to position Qatar as a major hub for startups across various industries, particularly the tech sector due to its strategic importance,” said QDB CEO Mr. Abdulrahman bin Hesham Al Sowaidi. “Through these efforts, we aim to attract and retain talents in various fields to support our entrepreneurship ecosystem, foster innovation and accelerate technology adoption across all domains in a bid to contribute to a sustainable and business-friendly economy,” Al Sowaidi said.

Qatar’s startup program aligns with models employed by venture firms like U.S.-based Alpha Wave Global, which 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), similar venture funds stipulate that startups from outside the region establish a “second” headquarters or office in their areas (which serve as bases for expanding operations across MENA and GCC) in return for funding and additional business advantages.

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. The urgency is evident, as data from emerging markets data tracker Magnitt reveals that Qatar represented only 6% of deals across the MENA region last year, with venture capital investment in its startups amounting to a mere 43 million Qatari riyal (~$11 million) in 2023. In contrast, Saudi Arabia accounts for 52% of the region’s deals, while the UAE dominates in terms of deal volume.

With that said, more competition contributes to the region’s advantage. Last year, the MENA region experienced a 23% decline in venture capital activity compared to the global average of 42%. Against this backdrop, Qatar’s heightened engagement in venture capital, spearheaded by its sovereign wealth fund and development bank, offers a promising outlook for the broader region, where 55% of investors involved in backing startups last year were local.