Asset manager Azimut and Gellify launch $50m VC fund for Mena start-ups

The fund will invest in companies with the potential to disrupt sectors such as smart cities, health care, digital commerce, FinTech and tourism

The Azimut Gellify Mena VC Fund will invest in seed-stage and market-phase start-ups, as well as those that are ready to scale up. Alamy

Azimut Abu Dhabi, a subsidiary of European asset manager Azimut, has linked up with innovation platform Gellify Middle East to establish a $50 million venture capital fund focused on business-to-business (B2B) start-ups in the Mena region.

The Azimut Gellify Mena VC Fund will invest in seed-stage and market-phase start-ups, as well as those that are ready to scale up, the companies said on Monday.

The start-ups will have the potential to disrupt sectors such as smart cities, health care, digital commerce, FinTech, the Fourth Industrial Revolution and tourism through the use of advanced technology such as artificial intelligence, the Internet of Things, blockchain and cyber security.

“We aim to replicate our experience in Europe where we have made successful exits and, in the process, enhance the innovation capacity of the region,” said Massimo Cannizzo, chief executive and co-founder of Gellify Middle East.

Investments in start-ups have boomed in recent months, after a brief coronavirus-induced slump over the past year.

Mena start-ups raised $1.2 billion in the first half of 2021, up 64 per cent over the same period a year ago, according to data platform Magnitt.

However, the number of deals dropped by 20 per cent to 254 as angel investors diverted funds towards more traditional asset classes such as stock markets and property.

The UAE led in terms of deal numbers, securing 61 per cent of all investment. Major funding rounds in the first half included $415m for Dubai's cloud kitchen company Kitopi, $30.5m for Saudi Arabia’s e-commerce platform Sary and $30m for Egyptian freight start-up Trella.

Digital payments start-up Paymob also secured $15m in new funding to expand its operations across the region as the Covid-19 pandemic prompted a surge in cashless transactions.

The top three Mena centres – the UAE, Egypt and Saudi Arabia – accounted for 71 per cent of total capital invested during the period, the Magnitt data showed.

The UAE closed 65 deals in the first half of the year, about 26 per cent of all transactions in the Mena region. Egypt and Saudi Arabia were ranked second and third with 24 per cent and 21 per cent of transactions, respectively.

Dubai was ranked 30th in the world in terms of its ability to attract venture capital and 32nd in a category that evaluated how well start-ups are funded, according to the first Innovation in Business Index by Finom, a B2B financial platform in the Netherlands.

The index assessed more than 100 cities around the world.

Gellify Middle East is open to receiving applications from start-ups that are relevant to the fund’s target investment portfolio, the companies said.

The Gellify business platform supports start-ups from the ideation stage to the market launch of a minimum viable product, up until it is ready for a successful scale up and growth.

In 2019, Azimut and Gellify raised €65m ($75.3m) for the Digitech Fund – a venture capital fund predominantly focused on European start-ups, the companies said.

The partners have also been co-investing in the Middle East. In June this year, the Azimut Gellify Digitech Fund invested an undisclosed amount in Workfam, a UAE-based employee software-as-a-service platform, to help it scale up.

“The Middle East governments are committed to innovation and have successfully taken steps to make their economies more digital,” said Maroun Jalkh, chief executive of Azimut Middle East.

“We see great potential for both high returns for investors and [the creation of] innovation opportunities in the GCC.”

Gellify, based in Italy, connects high-tech B2B start-ups with traditional companies to help them to innovate their processes, products and business models. Azimut is a European independent asset manager that has been active since 1989.