Dubai-based early-stage enterprise capital agency COTU Ventures is asserting that it has raised $54 million for its inaugural fund to help startups within the Center East from pre-seed to seed levels.
With a last shut achieved final 12 months, COTU Ventures, which identifies and backs founders from the inception to post-product launch, invests between $500,000 to $1.5 million as an preliminary examine.
Over the previous two and a half years, COTU Ventures has actively deployed capital into startups throughout the GCC, focusing totally on the UAE and Saudi Arabia and Egypt, with extra investments in Pakistan. The agency has already backed over 20 early-stage startups throughout numerous sectors, as outlined in its assertion.
Founder and normal accomplice Amir Farha revealed in an interview with TechCrunch that COTU Ventures is inclined barely in the direction of fintech and B2B software program. Nevertheless, the agency is open to alternatives throughout different sectors. Noteworthy investments by COTU Ventures embrace Huspy, a UAE mortgage platform backed by Peak XV and Founders Fund, and Egyptian fintech startup MoneyHash.
“The patron wave occurred with Careem and another functions. Immediately, companies are lagging a bit behind, so there’s an enormous alternative to construct software program to assist clear up a lot of their issues. We’re additionally interested by high-margin industries the place know-how can play an enormous position and capitalize on margin efficiencies,” stated Farha on the alternatives COTU is eager on.
Careem, the poster youngster of the startup scene within the MENA and GCC area, was one of many earliest investments Farha made as a VC at his earlier agency, Beco Capital.
A number of years after personally investing in startups in Europe and later operating an angel community upon return to the Center East from the U.Okay., Farha launched Beco Capital in 2012, the place he took half within the agency’s fundraising efforts for its first fund ($50 million) and second fund ($100 million+) earlier than departing in 2021 to launch COTU Ventures.
Whereas at Beco Capital, Farha and his accomplice returned the primary fund following Uber’s acquisition of Careem. He additionally famous that Beco Capital’s second fund, which incorporates well-capitalized startups resembling Common Atlantic-backed PropertyFinder, Kitopi, MaxAB, and Fresha, “is doing very well.”.
Reflecting on the evolving funding panorama, Farha defined how Beco Capital was actively concerned in seed rounds starting from just a few hundred thousand {dollars} to Collection B rounds of round $5 million earlier than the ecosystem advanced to accommodate extra sizeable funds and greater later-stage investments. On this time, enterprise capital investments within the GCC area skilled important development, hovering from $20 million in 2012 to over $2 billion by 2020.
As Beco Capital shifted its focus in the direction of later-stage investments with bigger funds, Farha determined to depart in 2021 and launch COTU Ventures, doubling down one early-stage investments. This determination, he defined, was pushed by the popularity of a market hole. Regardless of the numerous maturation of the GCC tech ecosystem by way of capital and expertise, there remained an important want for help past simply funding on the earliest levels of startup growth.
Farha asserts {that a} founder’s upbringing and adolescence experiences can provide helpful insights into their potential for achievement. At COTU Ventures, he emphasizes the significance of candid conversations that delve deep right into a founder’s private {and professional} journey, exploring important life occasions and choices. By fostering such open dialogue, COTU Ventures goals to ascertain belief and robust connections with founders, enabling knowledgeable funding choices. Furthermore, Farha highlights this technique permits the agency to supply strategic steerage on fundraising, organizational growth, and go-to-market technique. He added that the enterprise capital agency additionally facilitates introductions to key stakeholders resembling clients, hires, and potential follow-on traders, providing complete help to its portfolio corporations as they navigate Collection A rounds and past.
“I really like the chaos of the sooner levels the place you’re discovering, experimenting and testing. Issues look nice, however in the future, issues look troublesome, after which you are attempting to assist clear up issues alongside the best way. In order that surroundings fits me as an investor nicely,” remarked Farha. “Additionally, there’s a niche. The area remains to be early and no person’s proudly owning early-stage with conviction. You’ve got the larger companies investing smaller checks within the pre-seed levels however don’t spend sufficient time serving to them till they attain product market match. So, I feel there’s that house to be the go-to firm that founders wish to have on their cap desk.”
COTU Ventures’ restricted companions embrace Lunate, Mubadala, Dubai Future District Fund, Arab Financial institution, Bupa KSA, and GPs from VCs, together with Foundry Group, Tribe Capital, Stride, and a number of other household places of work.
“We’re proud to have backed a fund that’s distinguished not solely by its spectacular portfolio however by the distinctive management and monitor report of its founding accomplice, Amir,” stated Sharif Elbadawi, CEO of Dubai Future District Fund, in an announcement. “Our confidence in Amir stems from his deep ardour for supporting founders and his confirmed means to search out exceptional funding alternatives earlier than anybody else.”
