DOHA (Reuters) - Qatar's sovereign wealth fund is evaluating eight venture capital firms to add to its "fund of funds" venture capital programme, which has already invested nearly $500 million in six firms, the head of funds at the Qatar Investment Authority (QIA) told Reuters on Monday.

The $1 billion programme will be almost fully invested if all eight additional firms are selected, Mohsin Pirzada, QIA's head of funds told Reuters on the sidelines of Web Summit Qatar, a Middle East edition of the world's largest tech conference.

"At some stage, there will be a conversation around a potential expansion," Pirzada said.

The venture capital programme represents less than 0.2% of QIA's holdings, estimated at $526 billion.

The programme was designed to fill a gap in series a, b and c venture capital funding in Qatar in an effort to lure funds to the Gulf Arab state and build a stronger environment for entrepreneurship in the country.

QIA won't say which additional funds are under consideration.

"QIA is obviously a financial investor, and so we are still expecting a return to be made from these investments. It's not a charity," Pirzada said.

Qatar, a wealthy gas producer, has for years been striving to diversify its domestic economy and is vying with larger neighbours Saudi Arabia and the United Arab Emirates to lure financial companies to establish in Doha.

QIA has received applications from around 120 firms to join the programme since it was unveiled at the 2024 edition of Web Summit Qatar and, so far, it has selected B Capital, Deerfield, Rasmal Ventures, Utopia, Builders VC and Human Capital.

Each of those firms will open offices or regional headquarters in the Gulf Arab state, which Pirzada said was not a requirement but something strongly encouraged.

"By having people based in Doha, you are effectively bringing that ecosystem, that network effect that these individuals have, to the country," he said.

Utopia, one of the programme's firms, has established its new Middle East-focused venture capital fund called A-Typical in Qatar. The fund expects to hire between 15 and 18 staff in Doha, said Alina Truhina, managing partner at Utopia.