SHUAA Capital launches largest venture debt fund of $250 mln for the Gulf region

SHUAA Capital, a leading asset management and investment banking platform, announced on Wednesday the launch of SHUAA Venture Partners, a $250 million Sharia fund, focused on venture debt investments, according to Emirates News Agency (WAM).

The fund is the largest venture debt fund in the GCC and has been established to support the growth of regional technology and technology-enabled leaders that are seeking alternative sources of funding without significantly diluting their shareholding. The strategy was developed sharing the vision of the GCC’s regional goals of economic diversification and growth of the new economy.

Commenting on the launch of the fund, Natasha Hannoun, Head of Debt at SHUAA Capital, said: “SHUAA Venture Partners will provide alternative capital solutions to high growth companies across the GCC. We aim to support the growth of businesses, create jobs, lead further developments in innovation and technology, support economic diversification, and guide founders towards realizing their vision.

“Our investors have the opportunity to diversify into a new asset class in technology, with a shorter investment horizon, frequent distributions, and attractive financial returns.”

Investments in growth companies throughout the GCC have been dominated by early-stage transactions and investors, with few able to support businesses throughout their growth cycle. As a result, several growth-stage companies have limited access to larger pools of capital and non-equity financial solutions — a gap which needs to be filled for new ventures to succeed.

The GCC has seen a staggering year on year increase of 112 percent in venture capital transactions, with total investments of over $1.7 billion across 281 deals, the majority of which have been early-stage investments — Angel, Seed, and Series A (80 percent of deal count and 45 percent of deal value).

Venture debt regionally has increased 4.2x from 2020, with a total of $257 million deployed into 14 investments, indicating a clear demand for alternative funding sources.

SHUAA is the leading debt franchise in the region, with $545 million deployed in private debt transactions and $3 billion structured across multiple sectors over the last 11 years, including technology.

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