The Chinese venture capital company MSA Capital, supported by the unit of the Saudi Arabian Public Investment Fund, intends to raise $1 billion in financing to support technology startups in the Middle East.
The media, citing managing partner Ben Harburg, reported that the mentioned firm is currently negotiating with regional investors to finalize plans to launch the fund within a year. Mr. Harburg said that the goal of MSA Capital is to play at later stages and write bigger tickets in these rounds before the IPO. After that, the company will be able to take startups public.
Data from the venture capital firm Magnitt indicates that MSA Capital manages assets worth $2.5 billion and is backed by the unit Saudi PIF Jada Fund of Funds. The venture capital company is expected to become the largest in its area among other Middle East-oriented players in the industry. This scenario will be implemented only if MSA Capital manages to raise the target amount. Saudi Technology Ventures will become the second-largest venture capital company focused on the Middle East.
Currently, Saudi Arabia is strengthening its dominance in the sphere of venture capital. Last year, startups in this country managed to raise $1.4 billion. This figure is 33% higher than the result for 2022. In 2023, Saudi Arabia was ahead of its main competitor, the UAE, for the first time. This result is largely provided by government-funded funds that boost spending.
Magnitt notes that the Saudi government is focused on innovation. These aspirations create a kind of foundation for the development of the country’s technology sector.
Philip Bahoshy, founder and CEO of Magnitt, said during a conversation with media representatives that Saudi Arabia was late to the venture capital market compared to other countries in the Middle East and North Africa. At the same time, this did not prevent this state from achieving impressive results last year. In a sense, Saudi Arabia is an example of the fact that the result is more important than any circumstance, including the time when the movement toward the goal begins.
At the same time, there is currently a tendency for investors to stop interacting with companies from the Middle East and North Africa. Last year, startups from this region received funding from 366 investors, which is 30% less than in 2022.
Ben Harburg says that PIF Jada and Saudi Venture Capital Investment are involved in at least one of the three MSA Capital funds, which together raised $555 million.
The Chinese venture capital company was one of the first investors in the Tabby firm, which is based in Saudi Arabia and is a Buy Now, Pay Later (BNPL) service provider, being one of the first fintech unicorns in the Middle East. MSA Capital has also invested in technology giants such as Airbnb and Uber.
PIF provides financing to technology companies and startups. This brand aims to form a kind of venture capital infrastructure and stimulate aspiring entrepreneurs to create their own businesses for diversification and new jobs.
The $700 billion entity created a $1 billion fund of funds for investments. The company also puts money directly through its subsidiary Sanabil.
As we have reported earlier, Mythos Ventures Raises $14 Million.