Mapping the Middle Eastern investors fueling Asia’s tech firms (Updated)

Earlier this year, Mubadala – one of Abu Dhabi’s sovereign wealth funds – signed a pact with Goldman Sachs to invest US$1 billion in Asian private credit deals, with a particular focus on India.

And that’s just the tip of the iceberg in its new push.

Mubadala has been shifting its focus to other parts of Asia, as according to its managing director Khaldoon Al Mubarak, “growth is in the East today.”

Other state-owned sovereign wealth funds from Saudi Arabia, Qatar, and the United Arab Emirates have also shown significant interest in the Asian tech and startup sector, making substantial investments in the region over the past few years.

They have invested in a slew of listed and non-listed companies in the continent, including Zhipu AI, Swiggy, GoTo, Grab, and Carsome.

This comes at a time when investment in the region’s tech sector is in decline. In 2023, total VC funding in Asia amounted to US$78.1 billion, marking a 38% decrease from the previous year.

Top investors such as Alibaba, Tiger Global, and SoftBank have also become more picky in writing large checks to Asian startups.

The substantial state-backed funds from the Middle East thus provide a much-needed respite for startups in many parts of Asia.

India, the darling?

China, India, and Singapore are the main destinations for venture capital investment from the Middle East. China and India attract investment due to their large markets, while Singapore serves as the gateway to Southeast Asia.

However, data indicates that India is ahead of Singapore and China in the number of companies that have received backing. With 73, India surpasses the total of China and Singapore combined. In fact, of the total portfolio of Asian companies with investors from the Middle East, 37% are based in India.

One reason behind this is the bull run of the Indian equity market.

In 2023, the country was the world’s top market for IPOs, with 57 listings, up from 40 in 2022. Last year also saw IPOs by the likes of Tata Technologies and IdeaForge Technology, which collectively raised US$5.9 billion.

The momentum has continued into 2024. As of the first half of the year, Indian companies have raised a record US$29.5 billion through IPOs and FPOs, more than double the amount raised in the same period last year.

Seeing the potential of profitable exits via a market listing, Middle East investors have bet on IPO-bound companies in India, including Swiggy, Lenskart, Flipkart, MobiKwik, and Reliance Jio.

Still, there have been setbacks. The Qatar Investment Authority, which led a US$250 million funding round in Byju’s in 2022, may face losses as the edtech giant heads toward possible insolvency due to its heavy debt burden.

AI moment still loading