Bahrain venture investor takes Chinese fund stake

A Bahrain-based investor in venture capital funds says its latest investment will lead to a Chinese venture capital company setting up a new base in the region.

Al Waha Fund of Funds invested an undisclosed amount into a $250 million (Dh918.1m) fund managed by Beijing-based MSA Capital, which is its first investment into a Chinese investment vehicle. Following the deal, MSA Capital plans to use Bahrain as a hub for its regional expansion.

“Both China and Bahrain offer a substantial pool of tech talent, start-up capital and digitally-minded consumers, so the scope for further building this relationship is substantial,” said Areije Al Shakar, fund director of Al Waha Fund of Funds, which invests in other venture capital investment vehicles.

Al Waha Fund of Funds is a $100m fund set up by Bahrain’s sovereign fund Mumtalakat last year. It has already made investments into Beco Capital’s second fund as well as funds run by Silicon Velley-based 500 Startups, Middle East Venture Partners and Europe’s Finch Capital.

MSA Capital claims to be the most active Chinese fund in the Gulf, having made 10 investments in the region over the past year. It has also helped Middle Eastern companies pivot their business models to Chinese practices, and is planning to organise exchanges between corporates, investor and students between Bahrain and China.

“We see Bahrain as a hyper-efficient, user-friendly gateway to the Gulf, where we can collaborate with regulators, entrepreneurs, and strategic corporate partners to pilot new business models and serve as a hub for regional expansion,” said Ben Harburg, managing partner of MSA Capital.

“We believe the Gulf is at an inflection point due to an influx of seasoned talent, capital, and technology adoption. Chinese pioneered mobile-focused business models, both for enterprise and consumers, are best positioned to provide a roadmap for entrepreneurs in the region,” Mr Harburg added.