Saudi Arabia-based investment management and financial advisory company, Watheeq Financial Services, has announced the launch of a venture capital fund worth $26.7 million. The fund will invest in property technology startups in Saudi and in the region and is expected to reach its initial close in Q3 of 2021.

The Watheeq PropTech VC fund will pick companies that are using technology to solve pain points in the real estate sector, while adhering to Sharia-compliant investment standards, according to The National. It aims to help bridge the gap between the Middle East and North Africa markets and the rest of the world by opening up new market opportunities.

“We are investing in rapidly-growing start-ups … potential market leaders who are disrupting the traditional real estate markets and stimulating eco-friendly lifestyles,” Khaled Zaidan, managing partner of the fund and head of alternative investments at Watheeq, said to The National

At least 50% of the portfolio companies chosen by the fund for investment operate in Saudi Arabia, the biggest regional economy.

Smart cities, smart buildings, real estate analytics, blockchain, and online viewing technology are some of the focus areas for PropTech companies that are looking to disrupt the traditional market through digital solutions for the entire real estate value chain.

In addition to the pandemic, climate concerns and a rapid rise in population have all contributed to accelerating technology adoption in the real estate and construction sectors and their related industries.

“However, real estate hasn’t met its tech-potential yet. Even though the real estate sector is the largest investment asset class in the world … it still under-utilizes technology,” Zaidan said.