Nuva Capital, a venture capital firm based in Dubai and Riyadh, announced the first closing of its $ 100 million NVFI fund in February..
Was about three-quarters of the target and was done Less than a year after the firm’s launch in February 2020. According to the firm, the second should be closed Can be concluded by Later this year or Q1 2022.
Founded by partners Khalid Talhouni, Sara Abu Risheh and Stephanie Noor Prince, Nuva Mainly Targets markets in the Middle East and the broader GCC. The partners have a track record of investing in Middle Eastern companies – Kerim, Mamazworld, Golden Scent and Nana Direct.. However, He has also invested in Twiga Foods and AZA, two East African startups.
He has cut checks from three companies with this new fund: two Dubai-based companies, Iva and FlexPay, and an Egyptian-based company, Homezmart. And givenDespite having a strong focus on the Middle East and the GCC, the firm intends to invest in more African startups, particularly in Egypt and East Africa..
I spoke with partners to discuss their past investments as to why they are Desirous Similarities and differences between Africa and the regions they operate. Is in this interview Was edited Lightly For length and clarity.
TC: Why is Nuva Capital choosing Sub-Saharan Africa as one of its target markets?
Khalid: I mean, this is not our primary market, but this is an area of secondary focus for us, which we are doing Really interested in. And we think There is a lot of learning from the Middle East that we can draw from our investment experience. At the regional level Here we can use to invest in Africa, especially in East Africa, especially when digital adoption has increased a lot Enough.
TC: Nuva Capital recently invested in Homezmart. Are there any other startups in which Nuva has invested or is planning in North Africa and Sub-Saharan Africa?
All: So we have seen a lot of deal flow in North Africa, and we In college Started in December. We are looking at a lot of companies in Egypt, Morocco, All of North Africa, and in the coming months, we will invest Aggressively Beyond that geography. But for now, Homezmart is our only African investment.
TC: What is your plan in investing in Sub-Saharan Africa?
All: We have a network in East Africa because, in our previous fund, we invested in two companies in Kenya. One was Twiga and the other was BitPesa, now AZA. We have invested in them, and as part of our due diligence and network that we have built in Africa, that’s why we think The opportunity is because we saw it and understood the market with those two companies.
TC: From your perception of how the African market is, how does it differ from the GCC?
All: There are different ways to see it. But Africa is different from GCC markets According to population size, According to People’s purchasing power and According to Companies that get a lot of attention Based on On mass volume. So the success of the company is sometimes success is based On the quantity. For example, as a large number of people sign up in a company. For example, in Twiga, it was bridging the gap between farmers and sellers, so they had a large number of farmers, and that Really There was a lot of power. And I think This is where we see opportunities in Africa – in the power of population.
Stephanie: From VC’s point of view, a number of funds have come up in the GCC sector over the years.o Too much capital is flowing Directly in the market. It may not yet be reflected in East Africa at all if I am Say. Also, I think from where we look in East Africa, that is what the capital looks like To converge Around a particular group of founders.
TC: What will be the investment strategy for Nuva Capital in Africa?
All: We look for companies that fit our thesis. So, I can talk a little bit more about the areas in which we invest. So fintech is a big company that we look after. And then, we have a big focus on SaaS in various industries. We also Really Such as e-commerce and marketplaces, top private label angles and private brand brands sold through the e-commerce marketplace.
And then we also have, we also see what we say with speed Digitizing industries, and companies that are disrupting traditional industries through technology in education, healthcare, agritech. So these are the theses that we look at, and this is how we drive our investment strategy. According to Ticket sizes and stages, we focus on seed and series A, and then we can proceed to the round as well.
Stephanie: So when it comes to Africa in particular, what we have seen, which is also very interesting for us, is in healthcare, in Agritech, in various forms of financial services or in the intersection of fintech and anything else. Growth of pitching companies.. That would be As we move forward, we also become interesting for us, as we start to look a little more Intently.
TC: Since you are relatively new to African investment, would you like to partner or liaise with other VCs on a continent basis?
Stephanie: Ito‘It is a very common thing for us. We are quite supportive as a fund, and this is also due to the nature of the area where you end up co-investing. a number of Funds, and sometimes they are the same funds with which you have the same mindset. So it happens very rarely; I am Thought This is also very likely to happen with funds with which we have co-invested in Africa in the past.
TC: Egypt has been one of the exciting countries in both Africa and the Middle East. What do you think the market is going for?
Stephanie: Egypt is one of the primary markets on which we focus. We see a large part of our pipeline coming from Egypt. We have also seen a great change in Egypt over the years where the types of entrepreneurs, the types of founders who are coming to us, are more mature and more experienced and In college A higher caliber than before. WooE used to see a lot of earlier stage companies with inexperienced founders. But what we are seeing today is In college Amazing. When it is one of our primary focus markets, we are very excited about the market.
All: When companies move out of Egypt, their expansion strategy is usually either in the rest of North Africa or East Africa. Some will come to the GCC, while some will live in Africa, depending on which industry they are in. but I think As we invest more in Egypt and then Active Our strategy in East Africa will give us Really Well done in Africa, and as we grow, our the upcoming Fund will see more in Africa.
TC: Is a part of the fund dedicated to the African market?
Khalid: I do not think so We have a specific percentage, but the continent is part of the dominant strategy. We have an important Parts Of funds targeted at Egypt but we want to make at least 5-10% of the fund in Africa excluding Egypt. It depends on the size of the final fund but we Really Boom on africa