Middle East and Africa will reap benefits from Nuwa Capital’s newest fund – TechCrunch

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Nuwa Capital, a enterprise capital agency primarily based in Dubai and Riyadh, introduced the first shut of its $100 million NVFI fund in February.

The shut was three-quarters of the goal and was executed in lower than a yr following the agency’s launch in February 2020. Based on the agency, the second shut ought to be concluded by the tip of this yr or Q1 2022.

Based by companions Khaled Talhouni, Sarah Abu Risheh and Stephanie Nour Prince, Nuwa primarily targets markets within the Center East and the broader GCC. The companions have a observe file of investing in Center Japanese corporations — Careem, Mumzworld, Golden Scent and Nana Direct. Nevertheless, they’ve additionally invested in Twiga Meals and AZA, two East African startups.

They’ve minimize checks for 3 corporations with this new fund: two Dubai-based corporations, Eyewa and Flexxpay, and one Egypt-based firm, Homzmart. And despite having a powerful concentrate on the Center East and the GCC, the agency desires to double down on investing in additional African startups, significantly in Egypt and East Africa.

I spoke with the companions to debate their previous investments, why they’re  in Africa and the similarities and variations between the areas they function in. This interview has been edited flippantly for size and readability.

TC: Why is Nuwa Capital selecting Sub-Saharan Africa as one in all its goal markets?

Khaled: I imply, it’s not our major market, however it’s an space of secondary focus for us, which we’re actually fascinated with. And we expect that there are plenty of learnings from the Center East that we are able to take from our expertise of investing regionally right here that we are able to use for investing in Africa, significantly in East Africa, particularly because the digital adoption will increase very considerably.

TC: Nuwa Capital invested in Homzmart just lately. Are there another startups Nuwa has invested in or plans to in North Africa and Sub-Saharan Africa?

Sarah: So there may be plenty of the deal movement we’ve seen in North Africa, and we simply began in December. We’re seeing plenty of corporations in Egypt, Morocco, throughout all of North Africa, and within the coming months, we will probably be investing aggressively throughout that geography. However for now, Homzmart is our solely African funding.

TC: How do you propose to make the transition in investing in Sub-Saharan Africa?

Sarah: We’ve got a community in East Africa as a result of, in our earlier fund, we did spend money on two corporations in Kenya. One was Twiga and the opposite was BitPesa, which is now AZA. We’ve invested in these, and as a part of our due diligence and community that we’ve in-built Africa, that’s why we expect the chance is there as a result of we received to see it and understood the market with these two corporations.

TC: Out of your notion of how the African market is, how is it totally different from the GCC?

Sarah: There are other ways to have a look at it. However Africa is totally different from the GCC markets by way of the inhabitants sizes, by way of the buying energy of individuals and by way of corporations that get plenty of attraction primarily based on mass quantity. So the success of the corporate typically is predicated on quantity. So like a lot of folks signing as much as an organization, for instance. In Twiga, for instance, it was bridging the hole between farmers and distributors, so that they had a lot of farmers, and that actually had plenty of energy. And I feel that’s the place we see alternative in Africa — within the energy of the inhabitants.

Stephanie: From a VC standpoint, many funds have cropped up within the GCC area up to now couple of years, so there’s much more capital flowing instantly available in the market. That will not be precisely mirrored but in East Africa if I’d say. Additionally, I assume what we see from the place we’re in East Africa is that the capital appears to be concentrated round a specific set of founders.

TC: What would be the funding technique for Nuwa Capital in Africa?

Sarah: We search for corporations that match into our thesis. So I can discuss a bit extra in regards to the sectors that we spend money on. So fintech is a big one which we take a look at. After which, we now have an enormous concentrate on SaaS throughout totally different industries. We additionally actually like e-commerce and marketplaces, the highest of personal label angle and personal manufacturers promoting via e-commerce marketplaces.

Nuwa Capital

L-R: Khaled Talhouni, Sarah Abu Risheh and Stephanie Nour Prince

After which we even have, we additionally take a look at one thing that we name the quickly digitizing industries, and that’s corporations which might be disrupting the standard industries via expertise in schooling, well being tech, agritech. So these are the theses we take a look at, and that’s how we drive our funding technique. By way of ticket sizes and phases, we concentrate on seed and Collection A, after which we might additionally observe on within the spherical.

Stephanie: So when it significantly involves Africa, what we’ve seen, which can be very attention-grabbing for us, is a rise of corporations pitching to us in healthcare, in agritech, in numerous variations of economic companies or intersection of fintech and one thing else. That can be very attention-grabbing additionally for us as we transfer ahead, as we begin wanting a bit extra intently.

TC: Since you might be comparatively new to African funding, will you be trying to associate or liaise with different VCs primarily based on the continent?

Stephanie: It‘s a quite common observe for us. We’re fairly collaborative as a fund, and that’s additionally as a result of nature of the area the place you find yourself co-investing with quite a few funds, and typically they are usually the identical funds that you’ve the same mindset with. In order that occurs fairly a bit; I assume it’s very seemingly additionally to occur with funds we’ve co-invested with up to now in Africa.

TC: Egypt has been one of many thrilling nations in each Africa and the Center East area. What do you assume goes for the market?

Stephanie: Egypt is likely one of the major markets that we concentrate on. We’re seeing a big a part of our pipeline coming from Egypt. We’ve additionally seen an ideal shift in Egypt over the previous few years the place the kind of entrepreneurs, the kind of founders which might be coming to us, are extra mature and extra skilled and simply a better calibre than earlier than. We used to see plenty of earlier-stage corporations with inexperienced founders. However right now, what we’re seeing is simply wonderful. We’re very bullish available on the market when it’s one in all our major focus markets.

Sarah: When corporations come out of Egypt, their growth technique is often both to the remainder of North Africa or East Africa. Some will come to the GCC, whereas some will keep in Africa, relying on what trade they’re in. However I feel that as we make investments extra in Egypt after which actively into our East Africa technique will give us actually good publicity in Africa, and as we develop, our subsequent funds will look extra into Africa.

TC: Is there a portion of the fund devoted to the African market?

Khalid: I don’t assume we now have a particular share, however the continent is a part of the main technique. We’ve got a major portion of the fund focused at Egypt however we’d love to do a minimum of 5-10% of the fund in Africa, excluding Egypt. It will depend on the ultimate fund dimension however we’re actually bullish on Africa.

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