The shut was three-quarters of the goal and was executed in lower than a 12 months following the agency’s launch in February 2020. In keeping with the agency, the second shut ought to be concluded by the tip of this 12 months or Q1 2022.
Based by companions Khaled Talhouni, Sarah Abu Risheh and Stephanie Nour Prince, Nuwa primarily targets markets within the Center East and the broader GCC. The partners have a observe document of investing in Center Japanese corporations — Careem, Mumzworld, Golden Scent and Nana Direct. Nonetheless, they’ve additionally invested in Twiga Meals and AZA, two East African startups.
They’ve minimize checks for 3 corporations with this new fund: two Dubai-based corporations, Eyewa and Flexxpay, and one Egypt-based firm, Homzmart. And despite having a powerful concentrate on the Center East and the GCC, the agency desires to double down on investing in additional African startups, significantly in Egypt and East Africa.
I spoke with the companions to debate their previous investments, why they’re in Africa and the similarities and variations between the areas they function in. This interview has been edited evenly for size and readability.
TC: Why is Nuwa Capital selecting Sub-Saharan Africa as one in all its goal markets?
Khaled: I imply, it’s not our main market, but it surely’s an space of secondary focus for us, which we’re actually inquisitive about. And we predict that there are loads of learnings from the Center East that we will take from our expertise of investing regionally right here that we will use for investing in Africa, significantly in East Africa, particularly because the digital adoption will increase very considerably.
TC: Nuwa Capital invested in Homzmart not too long ago. Are there another startups Nuwa has invested in or plans to in North Africa and Sub-Saharan Africa?
Sarah: So there may be loads of the deal circulation we’ve seen in North Africa, and we simply began in December. We’re seeing loads of corporations in Egypt, Morocco, throughout all of North Africa, and within the coming months, we shall be investing aggressively throughout that geography. However for now, Homzmart is our solely African funding.
TC: How do you intend to make the transition in investing in Sub-Saharan Africa?
Sarah: We’ve got a community in East Africa as a result of, in our earlier fund, we did spend money on two corporations in Kenya. One was Twiga and the opposite was BitPesa, which is now AZA. We’ve invested in these, and as a part of our due diligence and community that we’ve inbuilt Africa, that’s why we predict the chance is there as a result of we obtained to see it and understood the market with these two corporations.
TC: Out of your notion of how the African market is, how is it completely different from the GCC?
Sarah: There are other ways to have a look at it. However Africa is completely different from the GCC markets when it comes to the inhabitants sizes, when it comes to the buying energy of individuals and when it comes to corporations that get loads of attraction based mostly on mass quantity. So the success of the corporate generally relies on quantity. So like a lot of folks signing as much as an organization, for instance. In Twiga, for instance, it was bridging the hole between farmers and distributors, so they’d a lot of farmers, and that actually had loads of energy. And I believe that’s the place we see alternative in Africa — within the energy of the inhabitants.
Stephanie: From a VC standpoint, many funds have cropped up within the GCC area up to now couple of years, so there’s much more capital flowing immediately available in the market. That will not be precisely mirrored but in East Africa if I’d say. Additionally, I assume what we see from the place we’re in East Africa is that the capital appears to be concentrated round a selected set of founders.
TC: What would be the funding technique for Nuwa Capital in Africa?
Sarah: We search for corporations that match into our thesis. So I can speak a bit extra concerning the sectors that we spend money on. So fintech is a big one which we have a look at. After which, now we have a giant concentrate on SaaS throughout completely different industries. We additionally actually like e-commerce and marketplaces, the highest of personal label angle and personal manufacturers promoting by means of e-commerce marketplaces.
After which we even have, we additionally have a look at one thing that we name the quickly digitizing industries, and that’s corporations which can be disrupting the standard industries by means of expertise in schooling, well being tech, agritech. So these are the theses we have a look at, and that’s how we drive our funding technique. By way of ticket sizes and phases, we concentrate on seed and Sequence A, after which we may additionally observe on within the spherical.
Stephanie: So when it significantly involves Africa, what we’ve seen, which can also be very attention-grabbing for us, is a rise of corporations pitching to us in healthcare, in agritech, in numerous variations of monetary companies or intersection of fintech and one thing else. That may be very attention-grabbing additionally for us as we transfer ahead, as we begin trying a bit extra intently.
TC: Since you’re comparatively new to African funding, will you be seeking to associate or liaise with different VCs based mostly on the continent?
Stephanie: It‘s a quite common follow for us. We’re fairly collaborative as a fund, and that’s additionally as a result of nature of the area the place you find yourself co-investing with quite a lot of funds, and generally they are typically the identical funds that you’ve an analogous mindset with. In order that occurs fairly a bit; I assume it’s very seemingly additionally to occur with funds we’ve co-invested with up to now in Africa.
TC: Egypt has been one of many thrilling nations in each Africa and the Center East area. What do you assume goes for the market?
Stephanie: Egypt is likely one of the main markets that we concentrate on. We’re seeing a big a part of our pipeline coming from Egypt. We’ve additionally seen an excellent shift in Egypt over the previous few years the place the kind of entrepreneurs, the kind of founders which can be coming to us, are extra mature and extra skilled and simply a better calibre than earlier than. We used to see loads of earlier-stage corporations with inexperienced founders. However right this moment, what we’re seeing is simply wonderful. We’re very bullish available on the market when it’s one in all our main focus markets.
Sarah: When corporations come out of Egypt, their growth technique is often both to the remainder of North Africa or East Africa. Some will come to the GCC, whereas some will keep in Africa, relying on what trade they’re in. However I believe that as we make investments extra in Egypt after which actively into our East Africa technique will give us actually good publicity in Africa, and as we develop, our subsequent funds will look extra into Africa.
TC: Is there a portion of the fund devoted to the African market?
Khalid: I don’t assume now we have a selected proportion, however the continent is a part of the foremost technique. We’ve got a big portion of the fund focused at Egypt however we’d love to do at the least 5-10% of the fund in Africa, excluding Egypt. It depends upon the ultimate fund measurement however we’re actually bullish on Africa.