The King Abdullah University of Science and Technology (KAUST) and the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank Group (IDB), in collaboration with Anfaal Capital, agreed to establish a Saudi Arabia-focused venture capital fund last Monday.

The joint initiative aims to promote and foster the development of the domestic venture capital market in Saudi Arabia. The initiative leverages KAUST’s expertise in new technologies, as well as the ICD SME Program’s experience in the development and management of investment vehicles.

The Fund will provide venture capital (VC) funding for high-tech start-ups located in Saudi Arabia and lead early-stage financing rounds attracting local investors and international venture capitalists. Further, it will invest in sectors that are strategic for the region and nurture entrepreneurship and technological innovation, stimulating the creation of high-value jobs.

The Fund will search for unique and innovative venture capital opportunities and provide the “smart and hands-on capital” needed to start and then sustain these companies.

The investment philosophy of the Fund revolves around investing in strong teams and superior products/technologies. It will partner with entrepreneurs who possess experience, vision and integrity, and will strive to attract the best human resources to the portfolio companies.

In its endeavors to create successful portfolio companies, the Fund shall act not only as a financial investor, but also as a qualified advisor by providing strategic guidance and operational support. Through its financial, strategic and operational engagement, it shall be a catalyst of growth for its portfolio companies and create substantial value for investors.

“Launching this venture fund exemplifies KAUST’s long-term investment to support technology start-ups within the nation,” said President Jean-Lou Chameau. “The fund will enhance KAUST’s role as a catalyst for innovation in research and technology development and support its vision to be a destination for the world’s most talented people.”

Khaled Al Aboodi, CEO of the ICD, said: “This agreement will greatly enhance the development of the alternative investment market in Saudi Arabia, and facilitate the economic development of a robust private sector. As such, it perfectly suits the long-term goals of the ICD, and we are happy to be working with such an illustrious institution towards the achievement of this worthy cause.”

Ahmed Muzni Bin Mohamed, the CEO of Anfaal, said: “Venture Capital has been proven to be the most effective tool to identify new technologies, to exploit innovation and to fund and launch new businesses. It is said that in the Kingdom, small and medium businesses run by entrepreneurs contribute less than 20% of the domestic economy. Technopreneurs’ share of contribution is likely to be much smaller but with the largest growth prospect. We at Anfaal Capital are honored to be working alongside two leading institutions in their respective fields towards achieving this noble cause by structuring this initiative into a CMA regulated fund for the benefit of the investors and promoters alike.”

via KAUST, ICD, Anfaal Capital to form venture capital fund.