Mena VC firm VentureSouq to set up climate-focused fund

• Net zero carbon emissions by 2050 requires $173trn investment
• UN envoy said move to net zero is ‘greatest commercial opportunity’
• Climate-related funds rose to 860 worldwide by the end of last year

Middle East and North Africa-based Venture capital firm VentureSouq is to launch a new climate-focused fund to support companies developing solutions for the green economy.

Achieving net zero carbon emissions by 2050 globally will require as much as $173 trillion in investments in the energy transition, according to BloombergNEF’s (BNEF) New Energy Outlook 2021 (NEO), its annual long-term scenario analysis on the future of the energy economy.

“We are launching the first climate-focused fund with a global mandate out of the UAE,” Sonia Weymuller, founding partner, VentureSouq (VSQ), told a conference on Thursday.

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The fund will back early-stage founders, with the main focus on seed and Series A investments. The size of the fund was not disclosed.

“We are looking at food and agtech, supply chain, transparency [and the] carbon economy [intertwined with] fintech,” Weymuller said during a panel session at Abu Dhabi Finance Week.

“We believe there’s a lot of intertwining between these sub-sectors, so we want to capture those cross-pollination opportunities within and across these sub-sectors and help these companies grow.” 

In 2020 Mark Carney, special UN envoy for climate action and former Bank of England governor, called the move to net zero the “greatest commercial opportunity of our time”.

The number of funds globally with a climate-related mandate rose to 860 at the end of last year, according to a report by Morningstar.

The 2022 World Economic Forum Global Risks Perception report lists climate action failure, extreme weather and biodiversity loss as the top three “most severe risks on a global scale over the next 10 years”.

“Climate is front of mind with the UAE hosting Cop28,” Weymuller added. “We do believe what the UAE is good at is acceleration.

“Even if the UAE may have been a little bit behind with regards to focusing on the climate space, it’s very much in acceleration mode.”

Last year, VSQ, which invests in high growth early-stage technology companies, launched the $50 million Mena FinTech Fund I, to invest in early-stage fintech and SaaS companies across the Middle East, North Africa and Pakistan region (MENAP).

The Mena FinTech Fund I is backed by the Saudi Venture Capital Company (SVC) and the Jada Fund of Funds, Bahrain’s Al Waha Fund of Funds, UAE’s DisruptAD, ADQ’s venture platform, and Mubadala Investment Company, alongside OFC, the Middle East investment arm of The Olayan Group. 

The fund has already deployed capital into fintech startups across Mena and Pakistan, including Tabby, Sary Baraka and Creditbook.

Established in 2016, VSQ has operations in the UAE, Egypt and Saudi Arabia with over $100 million in assets under management. The firm has invested in over 200 companies worldwide.