Qatar’s Sovereign Wealth Fund to Launch Country’s First VC Fund of Funds

The Qatar Investment Authority announced plans to launch the country’s first venture capital fund of funds program, which will invest more than $1 billion in international and regional venture capital funds.

The sovereign wealth fund, which has an estimated asset value of approximately $475 billion to $500 billion, also signed a deal to supply renewable energy to South African chemicals and energy company Sasol, including the world’s largest oxygen production facility.

According to the QIA, the VC fund of funds program’s two main objectives will be to generate market-level commercial returns as part of its mandate to generate sustainable, long-term returns for Qataris, and to support the country’s Third National Development Strategy, which aims to increase the number of local startups and the availability of VC funding to local firms.

The program will seek to draw international VC funds and entrepreneurs to Qatar and the wider Gulf region, with a priority on the tech sector, including fintech and edtech, as well as health care. It will mainly invest indirectly through other VC funds; however, it will be able to make targeted co-investments with the participating funds, according to the announcement. The program will only invest in VC funds and will not invest in private equity, debt or other funds.

“Building a well-connected start-up ecosystem network in Qatar is fundamental to diversifying the country’s economic base in the long term,” said QIA CEO Mansoor Ebrahim Al-Mahmoud in a release, noting that there is currently no dedicated pool of capital in Qatar for companies that are beyond seed funding and are ready for series A, B and C funding rounds. “QIA is launching this program to help ensure that innovative businesses can readily access capital and support from VC funds, enabling them to scale operations and expand market presence in Qatar, across the GCC, and ultimately onto the international stage.”

According to the sovereign wealth fund, managers looking to raise funds under the program will be required to have a solid track record, including consistently strong commercial performance. They will also have to demonstrate a commitment to Qatar and be set to play an active role in the region’s VC and startup network. Commitments that may be required include establishing an operational footprint in Qatar, highlighting organic expansion plans in the region and setting up a senior-level presence in the country.

The QIA added that it will reveal more details on the fund launch “in due course.”

The QIA also announced that it concluded three long-term power purchase agreements with Air Liquide Large Industries South Africa and Sasol South Africa to supply 330 Megawatts of renewable energy to Sasol’s site in Secunda, South Africa.

The power will be generated by three joint venture-owned wind projects in South Africa’s Eastern Cape, which are expected to be up and running by 2026. The deal is the first greenfield project between Enel Group’s renewable energy subsidiary, Enel Green Power, and QIA since the two signed a joint venture partnership in early 2021 to finance, build and operate renewable plants in sub-Saharan Africa.