New venture fund will focus on climate resilience plays across MENA

MENA, say hello to the Climate Resilience Fund: The Danish-Egyptian ClimateResilience Fund (CRF) launched this week with the aim of investing in agritech and nature-enabled solutions across MENA. The fund’s general partners Hossam Allam (LinkedIn) and Sherief Kesseba (LinkedIn) tell us that climate-focused agritech is at the forefront of the fight against climate change.

The fund is looking to raise USD 25 mn over the next two years from development finance institutions and family offices outside of Egypt, Allam said.

What type of projects do they want to back? Tech-enabled projects that the CRF finds interesting include precision farming (which uses data to help farmers optimize their yields), B2B agriculture marketplaces, and agrifoods. Startups in fields including regenerative and circular agriculture, seawater farming and forestry can also expect to pique the interest of the fund. “You don’t think of North Africa as a forestry destination, but if you introduce seawater and look at mangrove forestry, there is an interesting suite of solutions there,” Allam tells us.

Venture building is also in the plan: If the GPs and team members find an idea that they like but that hasn’t been turned into a proper business, they will bring together founders and a team that can take the idea forward, Kesseba tells us. “We’re a venture fund, so we want to invest in existing startups…If there is no founder coming to us with a needed solution, we will venture-build that solution,” Allam says.

The primary focus is pre-seed stage startups: The CRF is looking to fund startups at the pre-seed stage (pun most certainly intended) with ticket sizes ranging from USD 50-500k, Allam says.

The future goes beyond MENA: The fund will focus on Egypt and MENA at first, but the aim is to expand throughout Africa in two years’ time, Kesseba says.

MENA’s climate startup scene is still nascent, but the GPs are hoping to help shape and build it. “The space in Egypt and Africa reminds me of the early stages of the startup ecosystem in Egypt — competent founders without the proper business acumen, who don’t think of themselves as startup founders,” Allam tells us. The GPs believe that if you start investing in the sector, activity will happen and a pipeline will start to emerge in the next 6-7 years.

COP27 will be an important platform for the development of VC funding in this space: “One of the problems of impact investment in climate is that the market does not adequately value climate or our ecosystem,” Allam says. He’s optimistic that COP27 will put an economic value on what climate is, which will then make it much easier for venture capital firms to raise and deploy funding.