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


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

The shut was three-quarters of the goal and was performed in lower than a 12 months following the agency’s launch in February 2020. According to the agency, the second shut ought to be concluded by the tip of this 12 months or Q1 2022.

Founded by companions Khaled Talhouni, Sarah Abu Risheh and Stephanie Nour Prince, Nuwa primarily targets markets within the Middle East and the broader GCC. The partners have a monitor report of investing in Middle Eastern corporations — Careem, Mumzworld, Golden Scent and Nana Direct. However, they’ve additionally invested in Twiga Foods and AZA, two East African startups.

They have reduce 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 robust deal with the Middle East and the GCC, the agency needs to double down on investing in additional African startups, notably 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 every of its goal markets?

Khaled: I imply, it’s not our main market, but it surely’s an space of secondary focus for us, which we’re actually taken with. And we predict that there are a whole lot of learnings from the Middle 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, notably in East Africa, particularly because the digital adoption will increase very considerably.

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

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

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

Sarah: We have a community in East Africa as a result of, in our earlier fund, we did put money into 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 predict the chance is there as a result of we received to see it and understood the market with these two corporations.

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

Sarah: There are other ways to take a look at it. But Africa is completely different from the GCC markets when it comes to the inhabitants sizes, when it comes to the buying energy of individuals and when it comes to corporations that get a whole lot of attraction based mostly on mass quantity. So the success of the corporate generally relies on quantity. So like numerous 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 numerous farmers, and that actually had a whole lot of energy. And I believe 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 immediately available in the market. That might not be precisely mirrored but in East Africa if I would say. Also, I suppose 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 will be the funding technique for Nuwa Capital in Africa?

Sarah: We search for corporations that match into our thesis. So I can speak a bit extra concerning the sectors that we put money into. So fintech is a big one which we take a look at. And then, we’ve got a giant deal with SaaS throughout completely 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

And then we even have, we additionally take a look at one thing that we name the quickly digitizing industries, and that’s corporations which can be disrupting the standard industries via know-how 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. In phrases of ticket sizes and levels, we deal with seed and Series A, and then we may additionally observe on within the spherical.

Stephanie: So when it notably 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 providers or intersection of fintech and one thing else. That will be very attention-grabbing additionally for us as we transfer ahead, as we begin wanting a bit extra intently.

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

Stephanie: It‘s a very common practice for us. We’re fairly collaborative as a fund, and that’s additionally because of the nature of the area the place you find yourself co-investing with quite a few funds, and generally they are typically the identical funds that you’ve got an identical mindset with. So that occurs fairly a bit; I suppose it’s very possible additionally to occur with funds we’ve co-invested with up to now in Africa.

TC: Egypt has been one of many thrilling international locations in each Africa and the Middle East area. What do you suppose goes for the market?

Stephanie: Egypt is among the main markets that we deal with. We are seeing a big a part of our pipeline coming from Egypt. We’ve additionally seen an excellent shift in Egypt over the previous few years the place the kind of entrepreneurs, the kind of founders which can be coming to us, are extra mature and extra skilled and simply the next calibre than earlier than. We used to see a whole lot of earlier-stage corporations with inexperienced founders. But as we speak, what we’re seeing is simply wonderful. We are very bullish available on the market when it’s one in every of our main focus markets.

Sarah: When corporations come out of Egypt, their enlargement technique is normally 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. But I believe that as we make investments extra in Egypt and then 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 suppose we’ve got a selected proportion, however the continent is a part of the key technique. We have a big portion of the fund focused at Egypt however we’d love to do at the very least 5-10% of the fund in Africa, excluding Egypt. It is determined by the ultimate fund measurement however we’re actually bullish on Africa.

Source Link – techcrunch.com

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