The Gulf region has historically been depended on the oil sector, an industry prone to price fluctuations and which is heavily influenced by geopolitical circumstances. But recent years have seen a shift toward greater diversification as Gulf investors aim to reduce reliance on oil revenues and seek a hedge against local volatility.
Against this backdrop, Europe has emerged as an attractive destination for Gulf investors to diversify their investments. The region boasts a more balanced economic landscape, and has a stable and mature investment environment with established legal frameworks, regulatory systems, and transparent markets. Europe also presents a wide range of investment opportunities across various sectors including real estate, finance and renewable energy.
Increased involvement of Gulf investors in the European landscape is evident in the technology sector. In 2023, Gulf investments in European startups reached US$3 billion, a significant increase from US$627 million in 2018, according to Sifted. This influx of capital, particularly for growth-stage companies, is considerablr, with over two-thirds of Gulf investments in 2023 going to funding rounds over US$100 million.
Sifted has identified the most active Gulf investors in Europe based on their participation in funding rounds over the past two years. These investors represent nations such as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE), and are investing across industries such as energy, technology, finance and healthcare.
Aramco Ventures, the corporate venture arm of state-owned Saudi Arabian oil and gas firm Aramco, was the most active Gulf investors in Europe in these past two years, participating in 17 deals during the period.
Headquartered in Dhahran, Saudi Arabia and with offices in North America, Europe, and Asia. Aramco Ventures invests globally in startups and technologies that have strategic relevance globally and to Aramco’s business, with the ability to scale and disrupt.
In January, Aramco allocated an additional US$4 billion to Aramco Ventures, bringing the firm’s total investment allocation from US$3 billion to US$7 billion.
Aramco Ventures managed three funds before the capital increase: the US$500 million Digital/Industrial Fund, which invests in technology of strategic importance to Aramco; the US$1 billion Prosperity7 Fund, which invests in disruptive technology ventures beyond the energy sector; and the US$1.5 billion Sustainability Fund, which invests in startups with the potential to support Aramco’s ambition to achieve net-zero emissions by 2050.
Aramco Ventures also has a US$500 million venture capital (VC) fund Wa’ed Ventures, which invests in Saudi startups.
Mubadala Capital, the asset management arm of Abu Dhabi sovereign wealth fund Mubadala, was the second most active Gulf investor in Europe in the past two years, participating in 13 deals during the period.
Mubadala Capital is the wholly-owned asset management subsidiary of Mubadala Investment Company, with approximately US$20 billion of assets under management (AUM).
In addition to managing its own balance sheet investments, Mubadala Capital manages approximately US$13 billion in third-party capital vehicles on behalf of institutional investors, including four flagship private equity funds, three early-stage venture funds, two funds in Brazil focused on special opportunities and a highly diversified evergreen investment strategy focused on private market opportunities, as well as a series of co-investment vehicles, special purpose vehicles (SPVs) and continuation funds.
Mubadala Capital closed its last fund in October 2023, raising over US$710 million for its Brazil Special Opportunities Fund II.
Venture Capital, an investment firm headquartered in Dubai, was the third most active Gulf investor in Europe in the past two years, participating in nine deals during the period.
Founded in 2012, Ventura Capital is an investment company specializing in pre-initial public offering (IPO) technology startups. The firm provides institutional investors with exposure to disruptive consumer technology, enterprise technology and cybersecurity companies that are growing exponentially and approaching medium-term IPO.
To date, Ventura Capital has invested US$750 million in 23 technology companies including Upgrade, Paytm, Delos, Xiaomi, Twitter, C8 Technologies, Nextdoor, Alibaba, Lookout Mobile Security, Auto1, Coursera, Uber, Spotify, Didi and Lyft.
According to Sifted, Ventura Capital closed its last fund in January 2022, raising a total of US$150 million.
Qatar Investment Authority (QIA), Qatar’s sovereign wealth fund, participated in six deals in Europe in the past two years, making it the fourth most active Gulf investor in the region during the period.
Established in 2005, QIA focuses on investment management across various sectors and geographies. The company’s main services include long-term responsible investment in diversified asset classes, sectors, and global markets to protect and grow Qatar’s financial assets.
QIA announced in February that it would launch a VC “Fund of Funds”, a strategic investment program to foster innovation in the country. The program would invest more than US$1 billion in international and regional VC funds, and would not invest in private equity or debt. It would aim to yield market level commercial returns for the sovereign wealth fund in addition to developing Qatar’s VC sector.
MetaVision, a private investment fund based in Dubai, participated in six deals in Europe in the past two years, making it the fourth most active Gulf investor in the region during the period, neck-and-neck with QIA.
Founded in 2022, MetaVision is active in the metaverse and Web3 space, mainly focusing on startups at the pre-seed or seed stage.
According to Sifted, MetaVision closed its last fund in 2022. The fund’s notable investments include Kinetix, Ngrave and Cathedral Studios.
Investcorp, a global investment manager headquartered in Manama, Bahrain, participated in six deals in Europe in the past two years, making it the fourth most active Gulf investor in the region as well.
Founded in 1984, Investcorp is an investment manager specializing in alternative investments across private equity, real estate, credit, absolute return strategies, general partner stakes, infrastructure, strategic capital, and insurance asset management.
Investcorp has 14 offices across the US, Europe, the Gulf Cooperation Council (GCC) and Asia. The firm currently has over US$50 billion in total AUM, including assets managed by third party managers, and employs approximately 500 people from 50 nationalities globally across its offices.
Investcorp closed its latest round in February 2023, raising over US$1.2 billion for its inaugural North America Private Equity Fund. The fund focuses on family- and founder-owned business across six subsectors including: tech-enabled, knowledge and professional, data and information, supply chain, industry and specialty consumer services.
Chimera Capital, an investment firm based in Abu Dhabi, was the fifth most active Gulf investor in Europe in the past two years, participating in four deals during the period.
Chimera Capital is 100% owned by Chimera Investments, an Abu Dhabi-based private investment firm. These entities are part of Abu Dhabi’s Royal Group, a diversified conglomerate of companies comprising over 60 entities and employing 20,000 employees.
Chimera Capital invests worldwide from Series B onwards and is sector agnostic. It focuses on providing its clientele with access to innovative investment instruments and value-added services with a primary focus on the alternative asset management space.
Chimera Capital closed its last fund in 2022, raising US$10 billion for its Alpha Wave Ventures II fund. The fund focuses on the fintech, artificial intelligence (AI), life sciences, consumer internet and business-to-business (B2B) sectors.
Featured image credit: Edited from freepik
