How DFIs and sovereigns can collaborate

By Tamer Azer

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Biography

Tamer Azer is a partner at Shorooq Partners, an Abu Dhabi-headquartered tech investor. He is also an investment committee member at Falak startups, an Egyptian startup accelerator. He was previously a principal at Sawari Ventures, an Egypt-headquartered VC. 

He sits on the board of multiple startups and teaches at the American University in Cairo. Tamer holds an MBA from Oxford’s Saïd Business School. 

As a VC targeting the Middle East and North Africa (MENA), what types of LPs can you tap?

Doing VC in MENA is not the same as in the US. US funds have the luxury of a broad and diversified LP base. In our region, VC is novel so our choices are much more limited.

It generally boils down to two options: Gulf states’ (GCC) sovereign wealth funds and development finance institutions (DFI). 

This creates a dilemma since these two funders have different mandates. The sovereigns are commercially-minded and focused on their region’s economic development. The DFIs have a developmental mindset and focus on underserved geographies. This creates a divergence in where money is expected to go. You’ll be hard pressed to find a DFI investing in a Dubaï crypto startup, while a GCC sovereign would probably lead the round.