Dubai-Based Venture Capital Firm Plans to Deploy $30 Million in the Coming Months
Dubai-based venture capital firm Nuwa Capital is preparing for the long-overdue boom in GCC region capital markets and the rapidly expanding buy-now-pay-later sector. At Nuwa, explained Managing Partner Khaled Talhouni, the plan is to make strategic investments once every six weeks before the closing of its first fund.
Khaled Talhouni, Managing Partner, Nuwa
PC: ZAWYA
Targeting GCC Capital Market Infrastructures
On Nuwa Capital’s interest, Talhouni sees value in companies that power the capital market structure of the GCC. More investment is going into essential services at the startup level for market making, algorithmic trading, and KYC solutions that support Saudi Stock Exchange, Tadawul.
“The growth of Tadawul, and other regional exchanges such as the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX), is creating new demands for innovative capital market startups,” he said. “As these markets continue to deepen, opportunities for startups will increase.”
Focus on Early-Stage Deals
Nuwa Capital particularly expects, in the near term, early deal flow volumes to increase across the GCC as a significant amount of the Deal Rooms is beginning to potentially shift back to regional founders, specifically Dubai. Talhouni added that this momentum from post-COVID recovery, combined with expanded visa options and other incentives, is attracting digital nomads and entrepreneurs to the region. The firm also looks at Saudi Arabia as a key player on account of fast-paced change within the kingdom.
While early-stage investments are expected to increase over the next 6 to 12 months, Talhouni expects later-stage deals to go the opposite direction. “Entrepreneurs are getting a bit more cautious with funding rounds,” he said.
Next Fund to Widen Focus
That leaves Nuwa Capital with $30 million in the first fund, and it is likely to raise a fresh fund towards the end of 2025. The remit of the next fund is likely to include Series B or early Series B stages.
“While we have been focused on early-stage deals, there is great potential in the later stages that our next fund will likely reflect,” Talhouni said.
Highlight of BNPL Sector
Aside from the infrastructure for capital markets, Nuwa Capital is excited about BNPL’s future. From what appears to be the success of BNPL apps like Tabby and Tamara, consumer credit was one highlighted area where Talhouni said Nuwa would be investing in the future. But whereas Nuwa might have looked at other businesses for more ideas in lending, he is eyeing those that will help prop up the wider consumer credit ecosystem.
“A whole world is going to open up now, riding on the consumer credit done by the Tabby,” said Talhouni. He further emphasised how crucial it is for startups to be up and ready to sort out issues, which could smoothen credit scoring, default management, and securitization.
Nuwa Capital has already invested in one company in this space. He said Talhouni hedged on being ready to build out more investments in the sector as it grows, as he expects. Indeed, he added, with demand for consumer credit solutions expected to rise, more providers in that regard would be needed.
In these changing strategies toward GCC’s capital markets and the BNPL space, the firm is indicating that there are now fully developed opportunities in these sectors. With plans to deploy $30 million and raise a new fund until 2025, the firm is on its way to being one of the main players driving innovation and growth across the region. As early-stage deal volume increases, and the BNPL ecosystem matures, Nuwa’s investments are likely to shape the future of both sectors in the GCC.
