Watheeq Financial Services, an investment management and financial advisory company in Saudi Arabia, is launching a 100 million Saudi riyals ($26.7) venture capital fund that will focus on investment in property technology start-ups in the kingdom and beyond.
The Watheeq PropTech VC Fund is a closed-ended venture capital fund, which complies with Islamic Sharia principles of investment, the company said in a statement on Sunday. The Saudi Arabia Capital Market Authority-licensed fund is expected to reach its initial close in the third quarter of this year.
“We are investing in rapidly-growing start-ups … potential market leaders who are disrupting the traditional real estate markets and stimulating eco-friendly lifestyles,” Khaled Zaidan, managing partner of the fund and head of alternative investments at Watheeq, said.
“Venture capitalists are jumping into PropTech, and we are thrilled to be pioneering this transformation from Saudi Arabia to the region.”
The fund is identifying companies that are leveraging technology in the real estate sector, while meeting Sharia compliance standards. It will help bridge the gap between the Middle East and North Africa markets and the rest of the world by opening up new market opportunities.
At least 50 per cent of the portfolio companies chosen by the fund for investment operate in Saudi Arabia, the biggest Arab economy, the company said.
Smart cities, smart buildings, real estate analytics, blockchain and virtual viewing technology are some of the focus areas for PropTech companies that are looking to disrupt the traditional market through digital solutions for the entire real estate value chain.
Climate concerns, a rapid rise in population, the Covid-19 pandemic have all contributed in accelerating technology adoption in the real estate and construction sectors and their related industries.
“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 … it still under-utilises technology,” Mr Zaidan said.
