New Delhi, June 2 -- Shorooq Partners, an Abu Dhabi-based multi-asset investment firm backed by ten sovereign wealth funds, has secured the backing of a regional financial institution for its second tech-focused venture debt vehicle.
The investment firm, which is currently deploying its venture capital and venture debt funds, has secured a limited partner commitment from the Kuwait-based pan-Arab development finance institution Arab Fund for Economic and Social Development for its second Nahda Fund II.
The Arab Fund will deploy capital through its SME financing arm, Badir Fund for Developing SMEs, which helps small businesses access the financing and technical assistance to grow and attain profitability.
Shorooq, which manages a portfolio of around 80 companies, is targeting to raise $100 million for Nahda Fund II to finance tech startups in the region.
"By combining our expertise in structured financing with the Badir Fund's commitment to economic development, we can provide SMEs with the necessary resources to thrive," said Nathan Kwon, Partner and Credit Head at Shorooq.
Shorooq had marked the first close of Nahda Fund II in May last year and aims to deploy it across early-stage, high-growth startups and enterprises in the Saudi and UAE markets. The debt fund will focus on growth-stage tech firms with top-line profitability. It has so far deployed Nahda Fund II in two startups-Abhi and The Box.
Abhi, a fintech company, secured $15 million in debt financing led by Shorooq to expand its earned wage access services. The Box, a self-storage firm, secured $12.5 million in financing to enhance its operations.
The new fund succeeds the venture debt fund Nahda Fund I of 2021 vintage. Nahda Fund I had financed the UAE-based agritech business Pure Harvest Smart Farms through a $50 million green sukuk issuance, and extended $50 million in mezzanine finance to Saudi buy-now-pay-later platform Tamara in November 2023.
Shorooq offers venture capital and venture debt strategies, and is aiming to add new asset classes to its offerings, including private equity and real estate. It is currently deploying Bedaya Fund II, its third VC vehicle.
Bedaya Fund II is backed by SWFs including Mubadala, ADQ, Jada Fund of Funds, SVC, Al Waha Fund of Funds, and Korean Venture Investment Corporation. It is focused on early-stage startups operating in fintech, software, platform verticals, and digital assets in the Gulf Cooperation Council, Egypt, Pakistan, and South Korea across the pre-seed, seed, pre-Series A, and Series A funding stages.
Founded in 2017 by Mahmoud Adi and Shane Shin, Shorooq Partners is headquartered in Abu Dhabi, and has offices across Dubai, Riyadh, Manama, Cairo, and Islamabad. Shorooq's portfolio is largely dominated by Middle Eastern startups, followed by Africa, South Asia, and the US, with an equity value exceeding $ 1.5 billion.
The firm has been an early backer to some of the leading Saudi startups and has so far invested more than $85 million in Saudi tech startups such as the region's first unicorn Tamara, Lean Technologies, Lendo, Mozn.ai, Amwal, and Penny.
Published by HT Digital Content Services with permission from VC Circle.