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The UAE-based ADQ launches a USD 300 million fund for early-stage startups in India and Southeast Asia

AngelList also launched a new micro fund to invest in early-stage companies in India.

Photo by Dmitry Demidko on Unsplash

At a time when the novel coronavirus has paralyzed economies around the world, the deep-pocketed investors from the Middle East are on a lookout to invest in early-stage startups in India and Southeast Asia.

ADQ, the state-owned holding company for Abu Dhabi’s non-oil sectors, on Wednesday launched a USD 300 million venture capital fund—Alpha Wave Incubation (AWI) Fund—marked for early-stage investments across India and Southeast Asia.

New York-based investment firm Falcon Edge Capital will manage AWI Fund, ADQ said in the statement. Over the past few years, Falcon Edge has made several bets in India including ride-hailing unicorn Ola, news aggregation platform Dailyhunt, data analytics company Vphrase, and mobility startup Bounce.

Based in Abu Dhabi, AWI Fund will assist its portfolio companies in setting up their global or regional headquarters in Abu Dhabi’s Masdar City. AWI Fund plans to provide its portfolio companies get access to the UAE, the broader Middle East, and North Africa region.

Mohammed Hassan Al Suwaidi, chief executive of ADQ believes Alpha Wave Incubation Fund will further encourage Abu Dhabi’s culture of entrepreneurship, and help to promote its emerging position as a global innovation hub.

Set up in 2018, ADQ, which was formerly known as Abu Dhabi Developmental Holding Company, manages a portfolio of over 90 companies across 11 sectors, including healthcare, tourism and hospitality, logistics, manufacturing, utilities, media, agri-business, and real estate, among others.

“With the launch of Alpha Wave Incubation Fund, we have the opportunity to invest in outstanding start-ups that will generate sustainable, long-term financial returns while also drawing young founders and teams to Abu Dhabi,” said Mayank Singhal, head of venture capital and technology at ADQ.

The investors from Middles East have become increasingly active over the last few years eyeing opportunities in Asia and the US. For instance, Japanese conglomerate SoftBank’s USD 100 billion Vision Fund, which has invested in 88 companies globally, is primarily backed by Saudi Arabian investors.

Separately, AngelList’s India head Utsav Somani yesterday announced a micro VC fund called iSeed with an aim to back at least 30 early-stage startups by writing USD 150,000 cheques each, over the course of two years.

This comes at a time when overall funding in the world’s third-largest startup ecosystem is down as the majority of startups are struggling to survive this healthcare crisis. However, the funding crunch is more evident in the growth and late-stage startups, which have been burning money to sustain operations with revenues falling to a bare minimum.

Ashish Sharma, CEO of Temasek-backed venture debt firm InnoVen Capital, told KrASIA, that despite the uncertain economic environment, early-age investment will only be moderately lower this year. He also believes that there will be many internal rounds where existing investors support some of their portfolio companies to ride out the funding market dislocation this year.