New $25m Abu Dhabi venture fund to target early stage companies

A new Abu-Dhabi-based capital raising company completed the initially close of its $25 million debut fund.

Gain access to Bridge Ventures’ fund has been backed by Mubadala Capital, Saudi CAPITAL RAISING Company (SVC) and several other investors, including "more than a few prominent family office buildings", the business said. It will spend money on early stage businesses over the Middle East, North Africa and Pakistan, according to co-founder and controlling partner Issa Aghabi.

“We’ve developed a magnificent network of stakeholders through the years - end up being it investors, entrepreneurs we’ve supported and helped [or] government and sovereign stakeholders we’ve worked with previously,” Mr Aghabi told The National.

Mr Aghabi once was brain of the International Financing Corporation’s capital raising investments and funds in the region. Ahead of that, he was brain of investments at Abu Dhabi’s media area authority TwoFour 54. He co-founded Gain access to Bridge Ventures with Rakan Alrashed, who was simply previously portion of a Saudi Arabian expense firm that centered on start-ups and SMEs. The pair have also teamed up with Dubai-based private equity company CedarBridge Capital Partners.

The venture space in the Mena region is now increasingly active. Last year, there were 243 funding institutions in the Mena area, up from 235 a year earlier, in line with the 2021 Emerging Venture Markets Article due to be posted by Magnitt after this week. It defines financing institutions as venture capital firms, angel networks, corporate venture companies, accelerators and various other entities that take collateral stakes in start-ups.

Some of the cash established over the past 12 months are the Dh535 million ventures fund that is portion of Abu Dhabi’s Ghadan 21 initiative and the Dh1.1 billion Alpha Wave Incubation Fund targeting businesses from India and South-East Asia.

“There is cash available [and] there are persons investing in the worthiness chain. Is there enough? It depends upon what industry you are looking at,” Mr Aghabi said.

Some countries are well-served, but others such as for example Egypt, Jordan, Lebanon and Pakistan aren't, he argued. Even in the UAE, some parts of the marketplace are paid more focus than others.

“We’ve identified an integral gap available in the market, which is early level … pre-Series A good,” Mr Aghabi said.

The greater option of venture capital in your community means the most active funds are usually doing bigger deals, he said.

“They can’t afford to waste their time on seed [funding rounds], because while you are a large fund it is advisable to spend that profit a finite period of time. Bigger cheques make extra sense.”

He anticipates the average initial expense from his company's fund will end up being around $500,000, although “we can get smaller”, he said. The ones that thrive are as well more likely to receive follow-on funding. Gain access to Bridge Ventures is definitely targeting investments in a range of sectors incorporating FinTech, health tech, educational technology, program as a service and others.

The first fund will reach final close next 12 months and may be larger than the original $25m target, according to investor appetite, Mr Aghabi said.

He expects the fund will come to be fully invested over a good four-season period, although exits could have up to 4 more years to realise. Having CedarBridge as somebody will bring "a numerous proposition", he stated, adding a more robust focus on achieving powerful exits and on governance.

"I wanted that press from experienced buyers in this space to provide that discipline to capital raising," he said.

The International Monetary Fund estimates that micro, small and medium-sized enterprises constitute 96 per cent of most registered businesses in the Mena region and provide about half of the total jobs in your community. The International Finance Company estimates you will find a total financing gap to MSMEs around up to $240bn.

Access Bridge Ventures will be based in Abu Dhabi Global Market.