UAE-based VC firm 8X Ventures to invest $20 million in Mena cleantech startups


 UAE-based VC firm 8X Ventures plans to deploy $20 million in the Mena region’s climate tech and cleantech startups. It also plans to help at least one-third of the startups in its portfolio to expand to the Middle East by 2024.

The VC firm plans to deploy $20 million in the near future in the region’s climate tech and cleantech startups. It also plans to help at least one-third of the startups in its portfolio to expand to the Middle East. The goal is to enable at least five startups to operate in the region by 2024.

8X Ventures has also kept aside a pool of around $5 million for cleantech and climate tech startups that are based out of the Middle East and are actively working in the region.  

“It’s a large and highly underrepresented startup ecosystem right now. But the region is gearing up to be at the forefront when it comes to cleantech and climate tech revolution,” Chirag Gupta, Managing Partner at 8X Ventures, tells YS Gulf Edition. “So, any investment made to a climate tech startup in the region, which has been backed with strong deep tech, can create a huge growth impact over time.”   

8X Ventures was founded by Chirag Gupta, Esha Arya, Ajay Singh Rajput, and Vinod Agarwal. Since its inception, the VC firm has made 12 investments in early- to seed-stage deep tech startups spanning India, Singapore, and the United Kingdom.

It is helping these startups—including UK-based ZenPulsar and India-based Solinas and XYMA Analytics—expand to the Middle East. 

Apart from funding, 8X Venture provides post-investment guidance, strategic guidance to portfolio companies, operational guidance, and connections to other investors and customers for global expansion.

While the efforts of the governments for cleantech and clean energy have borne some fruit, there still is a large gap in terms of venture capital funding in sustainable and climate-focused startups in the region. 

“It is more like a chicken-and-egg situation. Since there is a lack of high-quality startups in these sectors, VCs are not comfortable putting their money. Again, startups are awaiting VCs to deploy more money that will fund cleantech and climate tech,” Gupta observes.  

According to a 2016 study by Wamda Research Lab, the absence of funds and lack of VC interest were the major reasons behind the slow growth of the sector. The only exceptions to the trend were Catalyst Private Equity and E2E Integrated Solutions. The pandemic saw a further decline in funding activities in the cleantech and climate tech sectors. In 2020, Clean Energy Business Council noted that while the fintech industry raked in funds from 41 deals, only five deals went to the climate tech sector.  However, Gupta is optimistic. He refers to cleantech companies, especially those from India, such as XYMA and Solinas, which are finding greater cashflow opportunities and better unit economics in the Mena region. 

“The Middle East is the fastest-growing region in terms of adaptation of technology. Regulations are also catching up with technology,” he says. He advises cleantech and climate tech startups to test their proof of principle and proof of concepts in their home country before exploring the Middle East. “If they come in too early, they might burn too much cash for very little impact,” he points out. Gupta notes that incubators and accelerators like Hub71 are also supporting the growth of the sector in the region. For instance, Hub71 partnered with Siemens Energy in Abu Dhabi to identify cleantech and climate tech startups in the region and explore investment opportunities in line with the UAE’s drive to invest in green infrastructure and clean energy projects. 8X Ventures is among the likes of Chimera Capital, Arise Ventures, and FTV Capital, which are also participating in the funding of cleantech and climate tech startups in the region.