China’s MSA Capital, Bahrain bank launch $50m VC fund

The Al Salam-MSA Bahrain Fund, which will also invest under the name MEC Ventures, will look into the application of China-developed technologies and business models in the estimated $1.3 trillion MENA economy. It is being touted as the first privately funded and led venture to unify Chinese and Middle Eastern capital and technology markets.

MEC will invest in MENA-based companies in areas including e-commerce, fintech, big data, artificial intelligence, cloud computing, logistics, and networking systems. It is unclear if the knowledge transfer remit includes investment in Chinese companies operating or expanding into MENA. The portfolio will leverage Al Salam’s regional networks and access to MSA’s existing China-dominated portfolio.

For MSA - previously known as Magic Stone Alternative Investment - the plan is part of a broader strategy to expand operations in MENA that has recently included participation in a $42 million Series B for Egyptian bus-hailing app Swvl. The VC firm’s second fund, which is targeting $250 million, achieved a first close of $200 million this year with support from Al Waha, a Bahrain-based fund-of-funds that aims to position the Middle East as a technology-enabled bridge between East and West.

“The combination of high mobile penetration, high ARPU [average revenue per user], and a large youth population, coupled with substantial market white space, evidenced by factors such as low e-commerce penetration levels and large unbanked populations, offer an ideal opportunity for investment,” Ben Harburg, a managing partner at MSA, said in a statement. “We believe that the MENA region is nearing an inflection point that can be accelerated through the adoption of Chinese-inspired mobile-first business models.”

MENA is home to more than 400 million people who speak a common language and are seen as having similar demand patterns while benefiting from high mobile penetration. Political support for innovation-led development is reflected in bullish investments by the sovereign wealth funds of Saudi Arabia and the United Arab Emirates into SoftBank’s first Vision Fund. Meanwhile, Al Salam’s and Al Wala’s commitments to MSA follow the introduction of a new investment limited partnership law in Bahrain.  

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• MENA
• Greater China
• Fundraising
• Venture
• China
• Magic Stone Alternative Investment
• Technology