Shorooq closes middle east venture debt fund

The fund has backing from a Korean private equity investor to provide non-dilutive capital to start-ups in the MENA region.

Abu Dhabi-based Shorooq Partners has closed a venture debt fund targeting the Middle East and North Africa.

Nahda Fund I closed at its undisclosed hard-cap and is anchored by a large Korean private equity investor. It features a sharia structure and will provide non-dilutive debt capital to fast-growing companies in the MENA region.

Korea-based IMM Investment backed the fund’s launch and acts as a key partner to the vehicle. The investment in Nahda Fund is its first move into the Middle East after two decades of investing in Asia-Pacific.

Nahda Fund launched in June and has already committed a majority of its capital. Investments so far include Pure Harvest, an agri-tech company looking to introduce climate-controlled smart farms in the region. The typical ticket size for the fund is between $5 million and $10 million.

Sami Yamani, the partner leading the private debt practice at Shorooq, said: “Once a start-up reaches a certain stage, it becomes very expensive to solely rely on equity financing for continued growth. With a relatively stable cashflow, utilising debt for routine expenditures such as working capital leads to a more optimal capital structure.”