COTU Ventures launches $54M fund for pre-seed and seed startups in MENA


Dubai-based early-stage venture capital firm COTU Ventures is announcing that it has raised $54 million for its inaugural fund to support startups from pre-seed to seed stage in the Middle East.

With a final closing last year, COTU Ventures, which identifies and supports founders from inception to product launch, invested between $1.5 million and $2 million, reserving capital for follow-on investments .

Over the past two and a half years, COTU Ventures has actively deployed capital into startups in the GCC, primarily focusing on the UAE and Saudi Arabia, Egypt and Pakistan. As noted in its statement, the company has already backed more than 20 early-stage startups across various sectors.

Founder and General Partner Amir Farha revealed in an interview with TechCrunch that COTU Ventures is slightly inclined towards fintech and B2B software. However, the company is open to opportunities in other areas. Notable investments from COTU Ventures include UAE mortgage platform Haspi and Egyptian fintech startup MoneyHash, backed by Peak XV and Founders Fund.

“The consumer wave happened with Careem and some other applications. Today, businesses are a little behind, so there is a huge opportunity to create software to help solve many of their problems. We are also interested in higher-margin industries where technology can play a bigger role and leverage margin efficiencies,” Farha said of the opportunities COTU is keen on.

COTU Ventures

Amir Farha (Founder and General Partner, COTU Ventures)

Careem, the poster child of the startup scene in the MENA and GCC region, was one of the early investments made by Farha as a VC at his previous firm, BECO Capital.

After working in corporate VC investing in the UK and Sweden for several years and later running the first seed fund and angel network in the region backed by the Dubai government, Farha launched BECO Capital in 2012, where he ran the firm’s investments. participated in. Strategy and firm building efforts for their first fund ($50m) and second fund ($100m) before departing to launch COTU Ventures.

While at BECO Capital, Farha and his partners returned the first fund following Uber’s acquisition of Careem, whose portfolio includes General Atlantic-backed PropertyFinder and Fresha. He also said that BECO Capital’s second fund, which includes well-capitalized startups like Kitopi and MaxAB, is “performing really well.”

Reflecting on the emerging investment landscape, Farha explains how Street Capital was actively involved in seed rounds ranging from a few hundred thousand dollars to Series B rounds of nearly $5 million before the ecosystem evolved to accommodate more large funds and larger funds. Later stage investments. Over this time, the GCC region has seen significant growth in venture capital investment, rising from $20 million in 2012 to more than $2 billion by 2020.

As Beko Capital shifted its focus to later-stage investments with larger funds, Farha decided to depart in 2020 and launch COTU Ventures, doubling the early-stage investment. He explained that the decision was driven by a recognition of the market gap. Despite the significant maturity of the GCC tech ecosystem in terms of capital and talent, there remains a significant need for support beyond funding in the early stages of startup development.

Farha claims that a founder’s upbringing and early life experiences can provide valuable insight into their potential for success. At COTU Ventures, he emphasizes the importance of candid conversations that delve deep into exploring a founder’s personal and professional journey, important life events and decisions. By fostering such open dialogue, COTU Ventures aims to establish trust and stronger relationships with founders, enabling the firm to make more informed investment decisions.

Additionally, Farha highlights that this strategy allows the firm to provide strategic guidance on fundraising, organizational development, and go-to-market strategy. He said the venture capital firm also facilitates introductions to key stakeholders such as clients, recruiters and potential follow-on investors, providing comprehensive support to its portfolio companies as they navigate Series A rounds and beyond.

“I love the chaos of the early stages where you’re exploring, experimenting and testing. Things seem great, but one day, things seem difficult, and then you’re trying to help solve the problems that come along the way. So that environment is a good fit for me as an investor,” Farha commented. “Also, there is a difference. This field is still in its nascent stage and no one is sure about the initial phase. You have big companies that are investing small checks in pre-seed stages, but don’t spend enough time helping them until they get product market fit. So, I think there’s room for growth in the company that founders want to have on their cap table.”

COTU Ventures’ limited partners include GPs from Lunet, Mubadala, Dubai Future District Fund, Arab Bank, Bupa KSA and VCs including Foundry Group, Tribe Capital, Stride and several family offices.

“We are proud to support a fund that is distinguished not only by its impressive portfolio but also by the exceptional leadership and track record of its founding partner, the Amir,” Sharif Elbadawi, CEO of Dubai Future District Fund, said in a statement. “Our confidence in Aamir stems from his deep passion for supporting founders and his proven ability to find remarkable investment opportunities before anyone else.”

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