Cash-rich Qatar should focus on later stage startups than early stage entities as the country has the potential to dominate in that area to become a de-facto hub for the Gulf tech, according to an global investment manager.
"Qatar is witnessing strategic development of its venture capital (VC) ecosystem. Qatar should pick a lane and should try to dominate that area," said Yalda Akour, managing partner and co-founder of Bracket Capital, an alpha driven global investment firm focused on later-stage, technology enabled companies with asymmetric risk-reward profiles.
This is where Qatar Financial Centre (QFC), Qatar Science and Technology Park (QSTP) and Qatar Free Zones can play a strategic role in attracting later stage businesses and work backwards in building a thriving ecosystem, said Akour, who recently addressed a webinar organised by the QFC.
The QSTP Tech Venture Fund (TVF) is a strategic venture capital fund designed to support local innovative startups and attract global startups looking to scale in the region.
The TVF offers opportunities for local, regional and global tech founders and entrepreneurs to source seed-stage funding and follow-on capital.
Doha Venture Capital is the global venture capital arm of Qatar Free Zones and provides support and strategic long term capital. It focuses on new economy and developing a growing community of companies in emerging Technology, from AI (artificial intelligence) to robotics and big data.
Akour said Qatar should not necessarily reinvent the wheel with early startups but attract later stage startups to its ecosystem and allow them to expand and scale.
Usually in the later stage, the startups would be growing with enhanced product selling, thus taking in significant revenues. The goal of funding at this stage is to scale the business and expand market share.
Stressing that Qatar can easily become a hub for "businesses at the intersection of government and technology"; she said "Given Qatar's global status and active well capitalised government, it is surely a very successful option."
Akour serves as an adviser to governments and policy makers on digital development in diverse fields such as smart city building, AI integration, automation and education technology.
The VC has been the best performing asset class in the last 25 years and technology has been one of the best defensive asset class weathering economic downturns and financial crisis, said Akour, who was vice president of Investcorp, and managed several key strategic relationships for the firm and advised investors on a variety of investments in private equity, hedge funds and in real estate.
Bracket Capital's investment portfolio comprises known brands as Airbnb, coinbase, reddit and Arc labs. It invests in highly asymmetric risk-reward opportunities, driven largely by the growing trend for companies to stay private longer.
"The exponential wealth creation is happening in the private sector, not in the public sector; and participating in that growth and capturing the multiple retail revenue can only get you by allocating to VC," she said, highlighting that the global VC has grown six-fold to $295bn at the beginning of 2020 compared to $50bn in 2010.