Saudi Arabia's Watheeq unveils $26.7mln shariah-compliant PropTech VC fund

Riyadh-based Watheeq Financial Services has launched a 100 million Saudi riyals ($26.7 million) MENA Venture Capital Fund that focuses on the property technology (PropTech) sector.

The Shariah-compliant W PropTech VC Fund licensed by the Capital Market Authority (CMA) is the first of its kind in the region and will reach its initial close by the end of Q3 2021.

The fund focuses on investing in start-ups with a global scale that are leveraging technology in the real estate sector while meeting Shariah compliance standards.

Khaled Zaidan, Managing Partner of the Fund and Head of Alternative Investments at Watheeq, said: “We are investing in rapidly-growing global scale startups that are visionary, potential market leaders who are disrupting the traditional real estate markets and stimulating eco-friendly lifestyles.”

“At least 50% of the portfolio companies chosen by the fund operate in the KSA market as we consider PropTech to be the ultimate solution to fulfilling the Kingdom’s 2030 vision through diversification of income and job creation,” he added.

According to a statement from Watheeq Financial Services, the fund team manages investments worth billions of Saudi Riyals in various real estate and venture capital asset types in local and global markets and has 100+ years of combined experience.

“Our experience in real estate and investments gives the fund an advantage unrivalled by generalist VC firms.” says Abdullah Al Muhareb, Fund board member and CEO at Watheeq.

The rate of adoption of technology in the real estate and construction industries has been rampant thanks to factors such as climate change, increasing population and COVID-19 related global lockdowns.

As digital transformation and innovation in the real estate value chain begins to disrupt the industry, the new PropTech target verticals include, smart cities, smart buildings, real estate analytics, blockchain, and virtual viewing technology.

“However, real estate hasn’t met its tech-potential yet. Even though the real estate sector is the largest investment asset class in the world (reported as $9.6 trillion globally in 2019), it still under-utilises technology,” Zaidan said.

Saudi’s real estate sector’s outlook is relatively strong thanks to the government consistently introducing reforms and initiatives to support both the economy and the sector, real estate services and investment firm CBRE said in a report on Sunday.

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