The State of Fintech in Qatar: Report

The State of Fintech in Qatar: Report

by 7. October 2021

Local authorities are looking to boost the competitiveness of fintech in Qatar, regionally and globally, according to a new whitepaper by Qatar Fintech Hub.

The country currently has 17 banks – 5 conventional, 4 Islamic, 7 foreign bank branches, and a specialised Qatar Development Bank (QDB).

Qatar also has a number of government bodies set up purely for fintech beyond the QDB and the Qatar Central Bank (QCB). For instance, the QCB also instated the Qatar FinTech Hub (QFTH) under its National Fintech Strategy. The QFTH is mainly responsible for hackathon, incubator and accelerator programs in Qatar.

Elsewhere, Qatar also has the Qatar Financial Centre (QFC), a financial district for licensing, commercial registration, immigration, and related services. In 2019, it had 200 companies new registrations, a growth of 33%. This brought its total companies in 2019 to 800, spread across fintech, IT, tax, and investment consulting firms.

By 2022, the QFC is looking to register 1,000 companies, the report said.

Outlining a number of initiatives to support fintech in Qatar, the report noted that Qatar was focused on four key fintech areas – paytech, regtech, SMEs, and Islamic finance.

focus areas fintech in qatar

Key incubators and accelerators for fintech in Qatar

In the first wave of QFTH’s programs last year, 18 fintech companies were selected from an application pool of over 750, from more than 72 countries.

Wave 2 of the program focuses on emerging technologies, and has 22 fintech companies from over 550 applications received from over 55 countries.

The QFTH is partnering with global fintech hubs including Innovate Finance (UK), Findec (Sweden), Singapore FinTech Association, Mumbai FinTech Hub, Istanbul FinTech Hub, Beirut Digital District, the Fintech Association of Nigeria, FinTech Hub Lithuania, and FinTech Association of Malaysia, for the second wave of programs.

Meanwhile, the Qatar Business Incubation Center (QBIC) provides a mixed incubator programme. It supports startups for a year and industrial manufacturers for two years. It is aimed at manufacturing and digital solutions.

The Digital Incubation Center (DIC) is a marketing, B2B, and mobile-focused incubator. It has incubated 159 startups so far, with a total investment of US$27 million. The DIC runs initiatives such as an Idea camp, Startup track, Growth track, and co-working space.

Where can Qatari fintechs look for funding?

The report said that over US$400 billion has been invested in over 40 countries by Qatari investors. Within fintech in Qatar, investments are mostly made by HNWIs, and are not usually disclosed to the public.

The main investors in Qatar are the QDB, the QBIC Entrepreneur Fund, the QSTP Tech Venture Fund, and the QFTH programs.

QDB invests in startups out of its US$100 million VC fund. It also funds startups out of its seed funding program Ithmar (funds unto 90% of the project capped at US$247,200), and SME equity program Istithmar.

Startups can access equity financing of up to US$27,500 from QBIC. Further, QBIC provides loans of up to US$1.1 million to startups and SMEs looking to finance scale-ups, in partnership with the QDB Al Dhameen guarantee programme.

QSTP’s Technology Venture Fund invests in growth stage tech companies, with an average Series A or B ticket size of US$500,000 to US$3 million.

Its Product Development Fund provides grants (up to 50% of the total budget) to startups and SMEs solving for local market needs. Here, funding is available for seed (up to US$500,000), Series A (up to US$1 million), and Series B (up to US$3 million) rounds.

QFTH’s incubator for early-stage startups offers investment of up to US$40,000. Its accelerator, aimed at established players, provides funding of up to US$100,000. Further, up to US$250,000 is available through in-kind support.

Private players such as Doha Tech Angels, 360 Nautica, Qatar Business Angel Network (QBAN), Ooredoo and Goodforce Labs are also known to have provided funding to startups.

For instance, Doha Tech Angels is the first private angel fund in Qatar, aimed at global early-stage, tech startups.

Drivers of fintech in Qatar

The QFH report highlighted a number of factors that are fuelling the growth of fintech in Qatar. Among these factors are consumer adoption of ecommerce and online transactions. More specifically, the report noted that online remittances, contactless payment solutions, remote insurance claims and payments processing, and SME lending were areas of interest.

From a regulatory perspective, the report said that both the QDB and QCB were involved in financial inclusion and literacy efforts, particularly for inclusion of the migrant population, and SME financing.

Meanwhile, it said that Qatar had the talent needed by the fintech industry. It pointed out that Qatar was ranked highest in the Arab world for the World Talent Ranking Report 2019. Its fintech hub was also ranked 10th globally, by the International Institute for Management Development.

Educational initiatives, such as two fintech-related projects at the Hamad Bin Khalifa University, and innovation courses at Qatar universities, also contributed to the country’s talent pool.

And finally, the report highlighted funding sources and capital accessibility in Qatar, noting that Qatar was in early stages for startup investments. This means that most seed capital is secured mainly through accelerator and incubator programs from the QDB and other startup and tech funds.

Noting that emerging technologies played a “significant role” in economic diversification, Abdulaziz Bin Nasser Al Khalifa, CEO of QDB and Chairman of QFTH Taskforce, said,

Abdulaziz Bin Nasser Al Khalifa

“Fintech offers a significant opportunity to drive Qatar’s economic diversification, one of the four pillars of Qatar’s National Vision 2030. It also provides a massive opportunity for SMEs in GCC countries, particularly in Qatar, to gain greater access to funding, one of the major challenges they face globally.”

 

 

 

 

Featured image credit: QFH

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