Venture capitalists are hunting for startups that can “ride the big waves of disruption” while showing strong customer engagement metrics, said Kushal Shah, Managing Director of e& capital, on the sidelines of the World Government Summit last week.
The venture arm of e&, which launched just two and a half years ago with a $250 million corpus, has already deployed 60 per cent of its funds across 17 companies, splitting investments equally between regional and global startups. According to Shah, their sweet spot lies in the $10-20 million investment range, targeting companies that have already achieved product-market fit and established a solid user base.
“We follow large waves, and that sets the trend,” Shah explained during an AB Majlis podcast interview. “Given the wave is coming, then we look for the ships and the captains that are guiding themselves through the waves.”
e& capital’s strategy
Those waves have shifted significantly over the past two years. While 2022 saw a strong focus on fintech, 2023 and 2024 were dominated by artificial intelligence. Notably absent from e& capital’s investment radar is the metaverse, with the firm instead prioritising companies that demonstrate strong customer engagement and repeat usage.
Dubai’s emergence as a top-tier startup destination was another key theme in the discussion. Shah noted that the emirate now ranks among the top ten global cities for new business establishment, alongside traditional powerhouses like London, New York, and San Francisco. He attributed this rise to multiple factors, including favourable tax conditions, access to global talent, and policy consistency, particularly referencing Dubai’s D33 economic agenda.
“We’re looking for where technology completely disrupts the way of business,” he said, outlining the firm’s future investment strategy. “If you’re an incumbent that’s not participating in the technology trend, we expect that incumbent to pretty much shrink and die.”
The firm’s portfolio already includes notable companies like Breadfast from Egypt, Tradystream, Derq and Airalo, which Shah highlighted as examples of businesses achieving the crucial “hyper-engagement” metric – where customers interact with the product four to five times monthly.
Looking ahead, Shah hinted at quantum computing as a potential next frontier for investment, though the immediate focus remains on companies leveraging AI within specific vertical markets rather than competing at the global LLM (Large Language Model) level.
This investment approach aligns with Dubai’s ambition to become one of the world’s most advanced digital economies, suggesting that the region’s tech ecosystem is maturing beyond its initial emergence phase into a sophisticated market that can attract and nurture globally competitive startups.
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