Israel- and Dubai-based investors set up $100 million tech debt fund

Tel Aviv-based fund manager Liquidity Capital and Dubai-based Vault Investments seek to provide debt financing for startups in region

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

A video published by the al-Ittihad Emirati newspaper welcoming the Israel-UAE normalization deal. (Screen capture/Twitter)
A video published by the al-Ittihad Emirati newspaper welcoming the Israel-UAE normalization deal. (Screen capture/Twitter)

Liquidity Capital, a Tel Aviv-based fund manager that offers companies financing against future revenues, said Tuesday it will set up a joint $100 million venture debt investment fund with Dubai-based Vault Investments.

Venture debt investment is debt financing that is provided to venture-backed firms to fund working capital or other expenses, like sales and marketing. Debt financing occurs when a firm raises money for working capital or capital expenditures by selling debt instruments to investors.

The new fund aims to provide financing for technology firms in the Middle East, North Africa and Europe. As part of the partnership deal, a joint investment office will be set up in Dubai, the two firms said in a statement.

The new fund will use predictive algorithms developed and used by Liquidity to assess potential companies, the statement said. Liquidity has used this predictive technology to weigh investments and capital deployment of its existing funds operating in Asia and the US.

The signing of the Abraham Accords between Israel the UAE and Bahrain in September has paved the way for partnerships between the nations.

“The United Arab Emirates, the Gulf Cooperation Council countries and the Middle East as a whole are overflowing with technology,” said Sultan Ali Lootah of Vault Investments in the statement. “The partnership between Vault Investments and Liquidity Capital will create new growth in the region, and the facilities and services we provide will be a positive anchor for entrepreneurs.”

Founded in 2017, Liquidity Capital, backed by Mitsubishi UFJ Fund Services and Israeli institutional investor Meitav Dash Ltd., is a fund manager providing growth capital through funds focused on the US, Asia and the Middle East.

Avner Stepak, the controlling shareholder of Meitav Dash and chairman at Liquidity Capital, said the fund will help technology companies, mainly from the region, “finance rapid growth” based on the online underwriting technology developed by Liquidity.

Set up in 2012, Vault invests in diversified business sectors such as real estate, oil and gas investments and tech firms, supporting startups via seed funding.

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