WKND Special: How woman investors are fuelling the UAE’s start-up ecosystem

High risk, high reward. That seems to be the mantra for women investors in the UAE’s startup ecosystem. On a constant lookout for the best bet, this vibrant community of women investors is sharply focused on taking the onus of individual investments as well as ensuring sustainable growth. The recent surge in women investors can be attributed to the disruption caused by the business-friendly, innovative policies of the country. What seems to be working for them are some simple principles, such as…

Start small, start local, and diversify

Elissa Freiha started investing in early-stage startups way back in 2014 when she was only 24. Having 12 active investments in the region currently, she says, “I have learned to hone my own investment thesis and decided to exclusively invest in female-led businesses in industries I know well.” Freiha says she used to invest as a part of a network of investors but by 2018, she had begun to invest individually.

Today, Freiha is the founder of Womena, a platform dedicated to encouraging gender diversity and inclusion in the regional entrepreneurship ecosystem. Her last tech investment, though, was in healthcare at the beginning of 2020, and she is currently focused on real estate investments globally. “I was lucky enough to halt investments in February 2020 right before Covid-19 hit the UAE and my last investment was in Chefaa, a regional healthcare provider. It was aligned it seems and Chefaa has since grown to serve an incredible number of clients in a very crucial time of need. I’m proud of that investment and of the team running it!”

Ask her about the reasons behind a surge in female investors in startups, and she says women investors are still far and few. Many of the country’s earliest women angel investors, who launched funds to invest in the region, are still met with reluctance by male LPs when raising funds. Limited Partners (LPs) is a venture capital term indicating investors’ investor, to be found in sectors like pension funds, larger corporates or investment firms.

The LP invests money, but doesn’t have a say in the day-to-day functioning of a VC firm.

For now, though, Freiha advises to start small, go local and then diversify. “Work with a network you trust when you can feel confident to ask any and all questions. Invest in businesses you fully understand and take your time to get to know the founders. Don’t fall for any time crunch or pressure and only invest money you feel comfortable losing.”

Invest in expertise

Heather Henyon has invested in over 100 early-stage tech companies in the US, Europe and Mena. She also started the first women’s angel group in the UAE, the Women’s Angel Investor Network (WAIN). The founding partner of Mindshift Capital — that is focused on post-seed early-stage companies in the US, Europe and Middle East — began investing in ventures eight years ago as an angel investor, and has close to 50 women angel investors who have invested in 10 women-led tech companies in Mena.

“In general, there has been a massive growth in entrepreneurial ecosystem of the UAE, which has also been accelerated by digitalisation in the wake of Covid-19,” she says. “We are proud to have a number of Emirati women investors backing Mindshift Capital. They are prominent business leaders who believe in the potential of women entrepreneurs and support them.”

Henyon says there has been a surge in health and wellness tech owing to the pandemic, a reason why she has invested in three such companies in the US and Turkey (NX Prenatal, Otonexus and Vivoo). “We like women’s health, sometimes referred to as femtech, as this is a large underfunded sector with massive market potential and demand on a global basis.”

Her simple suggestion is if one believes s/he possesses entrepreneurial spirit, they should simply go for it. “Surround yourself with as many believers and supporters as possible. If you are an investor, don’t invest in just one early-stage startup company. You need a portfolio of at least 10 companies to make money in this asset class since it’s high-risk. In order to increase your odds, invest in a fund or an angel group that has the pipeline, deal-flow and expertise,” she opines.

Building a strong foundation

A political science major, Sonia Weymuller pursued a career in strategy and commercial development at various global tech and media conglomerates, including Microsoft, Viacom and Turner Broadcasting. The founding partner at VentureSouq cautions young and inspiring investors against a formulaic approach to becoming a venture capitalist. “You don’t need to work in investment banking in order to become a thoughtful investor,” she says. “The valuable skill sets you acquire — both hard and soft — from your varied professional trajectories combined with your personal experiences will inevitably come into play and feed into the type of investor you grow into, the value you can add to portfolio companies and, ultimately, the type of conscious leader you become.”

VentureSouq started in the UAE eight years ago as a regional investor network for young professionals interested in investing in global early-stage tech ventures and it grew into its own, mirroring the growing appetite in angel investing in the region. Today, it has organically grown into the venture capital firm with a portfolio of over 200 companies, a strong educational ethos at its core, and led by a team with complementary skill sets and experiences across sustainability, strategy, private equity, corporate law, and risk and data analytics.

In 2020 VentureSouq launched its Conscious Collective Impact Fund, specifically investing into ventures and teams that choose to harness the power of technology to address today’s most pressing societal, economic and environmental challenges.

The Fund made 15 investments over the last year across sectors including fintech, greentech, healthtech, agritech, foodtech and the future of work from the US, Europe, Mena, South Asia, South East Asia, Africa and Latin America”

“Amidst the forced reset that occurred with Covid-19, including amongst the investor community, our objective was to reflect on how best to nurture the next generation of mission-driven investors coming out of this region. The conscious investing space is still relatively nascent in Mena with many still adopting a two-pocket thinking approach to their capital: one pocket for philanthropy and another ‘for-profit’ investments. We are on a mission to dispel this myth via our investments and education,” says Weymuller.

VentureSouq launched a pan-regional Conscious Investor Fellowship (CIF) with like-minded organisations including startAD, the startup accelerator powered by Tamkeen and anchored at NYU Abu Dhabi, King Abdullah University of Science and Technology (KAUST), Sheraa, and Hub71. The second edition of CIF is launching in July looking forward to building out an influential base of informed stakeholders interested in contributing to tangible positive change across sectors.

“We believe all sectors need to be ready for and educated on the solutions of the future that are coming; the same way that startups and innovators need the necessary inputs and support from a variety of different stakeholders. Secondly, the gender diversity is indicative of the changing nature of the regional investment landscape,” added Weymuller.

sandhya@khaleejtimes.com

• Dubai