Indian venture debt firm Stride Ventures has announced the first close of its Abu Dhabi Global Market (ADGM) Fund V.

This fund aims to provide support to startups in the Gulf Cooperation Council (GCC) region through shariah-compliant venture debt.

The fund size remains undisclosed, but Stride has historically deployed tickets between US$10 million and US$15 million and claims a US$110 million deal pipeline in sectors like fintech, healthtech, logistics, and climate tech.

Stride plans to grow its assets under management in the GCC to over US$500 million by 2026 as it strengthens its regional footprint, especially in Saudi Arabia.

The firm is leveraging innovation hubs like Riyadh Digital Innovation District and The Garage to engage with startups and partners.

This strategic effort is part of the firm’s commitment to supporting the growth of startups in the GCC region.

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🔗 Source: YourStory

🧠 Food for thought

1️⃣ Shariah-compliant venture debt fills a strategic gap in GCC’s evolving startup ecosystem

Stride’s shariah-compliant venture debt model addresses a specific gap in the GCC financial landscape, where Islamic finance assets have reached $5.4 trillion in 2024 and are projected to grow to $9.75 trillion by 2029 at a 10% CAGR 1.

The GCC region accounts for approximately 50% of global Islamic finance assets, creating a substantial market for compliant financial instruments beyond traditional equity investments 1.

Research shows that shariah-compliant investments have a positive relationship with family and large individual investments in the GCC, which dominate the regional economy 2.

This timing is particularly strategic as the UAE’s venture capital ecosystem has matured significantly, attracting $3 billion in 2022, up from $796 million in 2020, indicating growing demand for diverse funding instruments 3.

Venture debt represents an evolution in the region’s investment landscape that has traditionally been equity-focused, potentially offering founders an alternative to dilution during a period when investors are implementing tighter financing terms and valuation adjustments 4.

2️⃣ Corporate involvement signals maturing venture ecosystem in GCC economies

Stride’s plan to triple assets under management to over $500 million by 2026 aligns with broader growth trends in the region, where corporate venture capital has grown at a 19% CAGR from 2020 to 2024, reaching $1.7 billion in deployed capital 5.

The venture debt firm’s focus on fintech, healthtech, logistics, and climate tech mirrors the priority sectors identified in regional investment analyses, with fintech particularly prominent due to the region’s push toward digital transformation in financial services 6.

Saudi Arabia and the UAE dominate the venture capital landscape, accounting for over 90% of total deal volume in the region, explaining Stride’s strategic focus on these markets 5.

The firm’s partnership approach with regional banks reflects a broader trend toward structured collaboration in the GCC’s venture ecosystem, where CVCs accounted for 13% of total VC funding in 2024 and 28% of all active investors 5.

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