Investment banking firm Intercap Capital is working on setting up a USD 30 mn fund for investing in tech startups, Managing Director Rafik Dalala told Enterprise. The fund, which Intercap is naming T-Six, is aiming for a USD 10 mn first close at the beginning of 2023 and plans to acquire minority stakes in as many as 50 startups, he said.

Which startups is the fund targeting? The fund will invest between USD 500k and USD 1 mn in series A rounds held by startups in six sectors that fit into the “new wave of technology,” including AI, medtech, biotech, foodtech, and gaming and entertainment, Dalala said. The fund isn’t ruling out seed funding, but will be focusing mostly on businesses at the series A stage of funding which already have products in the market, he said.

The majority of the fund’s capital will be deployed in local startups, with some 20% earmarked for companies in Saudi Arabia, the UAE and Jordan. Intercap plans to stay on board for seven to eight years before it exits, Dalala said. The fund will deploy its capital over a period of three to five years, he added.

Where’s the money coming from? T-Six plans to hit up development finance institutions in the EU and Gulf, sovereign funds and regular LPs like ins. companies to participate in the fund, Dalala said.

Nilex listings could be T-Six’s exit of choice: Intercap plans to apply for a sponsor license to help startups list on the small-cap Nilex as one potential exit strategy, Dalala said. SMEs are currently required to contract with sponsors — financial advisors that assess the suitability of SMEs for listing on the exchange and assist qualifying firms in both going public and meeting their responsibilities after listing — before listing on the Nilex.

About Intercap: Intercap Capital is a local subsidiary of Intercap Inc, a Canada-based investment banking firm specializing in corporate finance, business valuation, accounting and taxation.