[ad_1]
The economy of the MENA region has grown on the back of oil and gas extraction and trade. However, as the world is now transitioning away from fossil fuels, a group of countries, particularly the GCC region, is currently pushing ahead with technology and green solutions.
MENA countries are increasing their zero-zero efforts. In the year Ahead of the COP26 climate conference in 2021, countries including Saudi Arabia, the UAE and Bahrain have committed to drawing up green economy roadmaps for future growth. Saudi Arabia has pledged to invest more than $186 billion in green development by 2060, while the United Arab Emirates has pledged to achieve its goal of net zero by 2050.
Investor interest has remained subdued as governments do their part. Dubai-based 8X Ventures seeks to address this gap.
The venture capital firm was launched in 2022 to support the growth of deep-tech startups that deliver clean and climate-focused solutions in the MENA region.
“It’s a huge and very underrepresented startup ecosystem right now. But the region is poised to be at the forefront of the clean and climate technology revolution,” said Managing Partner Chirag Gupta. He says YS Gulf Edition. “Therefore, any investment in climate technology startups in the region, backed by strong deep technology, will have a significant growth impact over time.”
The VC firm plans to invest $20 million in the region’s climate technology and cleaning startups in the near future. It plans to help at least one-third of the startups in its portfolio expand into the Middle East. The goal is to enable at least five startups to operate in the region by 2024.
8X Ventures has set aside a pool of nearly $5 million for active cleantech and climate technology startups from the Middle East.
8X Ventures was founded by Chirag Gupta, Isha Arya, Ajay Singh Rajput and Vinod Agarwal. Since its inception, the VC firm has made 12 investments in early stage to seed stage deep tech startups spanning India, Singapore and the UK. It is helping these startups expand into the Middle East, including UK-based ZenPulsar and India-based Solinas and XYMA Analytics.
Nishanth Raja, Co-Founder and CEO He shares the experience of working with 8X Ventures, “The 8X Ventures team has a practical approach to investments in high-tech startups. Their mentorship and development advice helped us strategize our business solutions to expand into international markets, especially in the Middle East.
He also added, “Chirag Gupta has helped us connect with many industries in the Middle East, as we expand globally, focusing primarily on industries that embrace Industry 4.0 technologies and innovative solutions.”
In addition to funding, 8X Venture provides post-investment guidance, strategic guidance to portfolio companies, operational guidance and liaison with other investors and clients for international expansion.
Clean technology and climate technology in MENA
While governments’ clean technology and clean energy efforts have borne some fruit, there is still a huge gap in terms of venture capital funding for sustainable and climate-focused startups in the region.
“It’s like a chicken-and-egg situation. Since there is a dearth of high-quality startups in these sectors, VCs are reluctant to invest their money. Again, startups are looking to VCs to deploy more funds that support clean tech and climate tech,” said Gupta.
A lack of financial support has long hampered the climate technology sector in the region. According to a 2016 study by Wamda Research Lab, lack of funds and lack of VC interest were the main reasons for the slow growth of the sector. Standing out from the trend are Catalyst’s private equity and E2E integrated solutions.
The pandemic has further reduced funding activities in the cleantech and climate technology sectors. In the year In 2020, the Clean Energy Business Council found that the fintech industry received funding from 41 deals, with five deals going to the climate technology sector.
However, Gupta is optimistic. Cleantech companies, especially from India such as XYMA and Solinas, are finding higher cash flow opportunities and better unit economics in the MENA region.
“The Middle East is a rapidly growing region in terms of technology adaptation. Regulations are becoming more and more relevant to technology,” he says.
He advises cleantech and climate tech startups to test proof-of-principles and concepts in their home countries before exploring the Middle East. “If you get in too early, you can burn too much money for too little impact,” he pointed out.
Gupta noted that incubators such as Hub71 and accelerators are also supporting the growth of the sector. For example, Hub71 in Abu Dhabi partnered with Siemens Energy to identify cleantech and climate technology startups in the region and explore investment opportunities in line with the UAE’s efforts to invest in green infrastructure and clean energy projects.
8X Venture is among such. Aris Ventures and FTV Capital are participating in the financing of cleantech and climate technology startups in the region.
For any press related questions or to share your press releases, write to us at
[email protected]