UK venture capital firm Oxford Capital Partners and Qatar National Bank and its private banking subsidiary Ansbacher Group have teamed up to form Qatar Capital Partners (QCP), a venture capital business in the Gulf state.
Last September the consortium won the mandate to run two funds for the Qatar Science & Technology Park (QSTP), designed to establish Qatar as a centre for technological innovation.
Qatar is looking to emulate the success of the US, where 10% of GDP and 11% of all jobs are generated by venture capital investments. “If Qatar gets the venture capital model right, which I think it will, there’s nothing to stop it from becoming a global centre for technology,” says Mikko Suonenlathi, general manager of QCP in Doha.
QCP will manage the New Enterprise Fund and Technology Venture Fund, which will invest in science and technology companies based in the QSTP. “The vision is for Qatar’s knowledge economy to operate on a global scale, so it was important for the fund managers we chose to have international reach as well as local knowledge.” says Eulian Roberts, chief executive of the QSTP.
The $30 million New Enterprise Fund will provide seed and early stage capital with a focus on moving technology from the lab bench to the marketplace.
The $100 million Technology Venture Fund will invest in growth-stage technology companies, helping them to scale up production and expand their technology pipeline.
All the capital for the New Enterprise Fund and $20 million for the Technology Venture Fund was provided by the QSTP’s backer, the Qatar Foundation, which was set up by the emir of Qatar.
Suonenlathi says Qatari investors have subscribed to the balance of the Technology Venture Fund. He adds that QCP might look to open the fund up to international investors later this year. “This is a great time to start up this type of fund as we are at the start of a new venture capital cycle and we feel that technology markets are still undervalued,” he says.
The size of investments for the New Enterprise Fund will range from $500,000 up to a maximum of $3 million, while for the Technology Venture Fund it will range from $2.5 million to $10 million. The average investment period for both funds will be five to seven years. “We are confident that Qatar Capital Partners can generate strong returns,” says Edward Mott, chairman of Oxford Capital Partners.
QCP’s Suonenlathi says that as well as investing on a standalone basis, QCP will look to syndicate deals. He expects that QCP will make its first investments by the beginning of the third quarter, following the completion of due diligence on a number of companies that it has already identified.
