#Saudi-Backed Chinese VC to Raise $1 Billion for Mideast Startups - Bloomberg

Saudi-Backed Chinese VC to Raise $1 Billion for Mideast Startups - Bloomberg

A Chinese venture capital firm backed by a unit of Saudi Arabia’s Public Investment Fund is planning to raise $1 billion to back technology startups in the Middle East.

MSA Capital is currently in talks with regional investors to finalize plans to launch the fund within the year, according to Managing Partner Ben Harburg.

“Our objective is to play at later stages and write bigger tickets in those pre-IPO rounds, then we can take them public,” Harburg said in an interview.

MSA, which manages $2.5 billion in assets and is backed by Saudi PIF unit Jada Fund of Funds, would become the largest VC firm focused on the Middle East if it successfully raises the targeted amount, according to venture capital data firm Magnitt. Saudi Technology Ventures would be the second.

The activity underscores Saudi Arabia’s recent rise to dominance in the venture capital space. Startups in the kingdom raised $1.4 billion in 2023, putting it ahead of its main competitor, the UAE, for the first time. That’s thanks in large part to government-backed funds boosting spending.

PIF’s Jada and Saudi Venture Capital Investment are involved in at least one of three MSA funds that have collectively raised $555 million, according to Harburg.

MSA was an early investor in Saudi-based Tabby, the buy-now-pay-later firm that’s counted among some of the Middle East’s first fintech unicorns. It has also put money into tech giants including Airbnb Inc. and Uber Technologies.

For its part, the PIF has been plowing money into tech firms and startups as it seeks to build a VC industry and encourage young entrepreneurs to set up their own businesses to diversify the economy and create jobs.

The $700 billion entity created a $1 billion fund of funds for investments including into venture capital and also puts money to work directly through its subsidiary, Sanabil.