LIVE: Future Investment Initiative - Day Two

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Updated 26 October 2022
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LIVE: Future Investment Initiative - Day Two

  • About 6,000 of the world’s business leaders, policymakers, investors, entrepreneurs and tech experts gather in Riyadh

DUBAI: Mohammed Al-Jadaan, Saudi Arabia’s minister of finance, has said that it would be a very difficult six months ahead for the global economy, even as his outlook for the Gulf region was split.

“It is very difficult to predict what is coming to the world, but worldwide it is going to be a very difficult six months. Regional, I think the region is largely split into two areas, one is the Gulf region I think the next 6 months or the next 6 years are going to be actually very good. The wider region is going to be very difficult and it is our role to help that wider region,” Al-Jadaan said during a plenary at day two of the Future Investment Initiative (FII).

“You cannot look at the world in one way… we have seen how the world is almost split into [the] optimistic side that are looking for the future, those who have planned, that who are able to make long-term decisions and prepare themselves for difficult times are reaping the benefits. Those who haven’t are facing difficult times… and the world is going through a very, very difficult time,” the Saudi official explained.

“I think what we need to do is encourage cooperation and collaboration. The world needs stability, predictability for macrofinance to be available, for investment to be available. And that is becoming very difficult with all the shocks we have seen.”

The three-day Riyadh event gathered more than 6,000 participants – from policymakers, investors, entrepreneurs to young leaders – for discussions on topics ranging from geoeconomics to gaming.

During Tuesday’s sessions, delegates explored issues such as supply-chain disruption, the growing demand for travel since the lifting of pandemic restrictions, e-commerce, cybercrime, and the widespread problem of rising inflation.

Saudi Minister of Investment Khalid Al-Falih in a plenary session said that the energy crisis in Europe will accelerate the oil and gas sector’s transition to renewables and hydrogen.

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman, in a separate session, meanwhile said that some were using their emergency stocks and using it as a mechanism to manipulate markets when its purpose should be to mitigate any shortages of supply.

Princess Reema bint Bandar, the Kingdom’s ambassador to Washington, also explained that the current discord between Saudi Arabia and the US was “not political” but “purely economic.”

Meanwhile, on the sidelines of the Riyadh event, Saudi Arabia’s Ministry of Investment signed five investment agreements in the aerospace (Boeing and Orbitel), technology (Ginkgo Bioworks and Taihan Cable & Solution) and finance (BTG Pactual) sectors to further cement its emerging positioning in global value chains.

Other plenary sessions for the day include the rise of geoeconomics, the energy transition calibrating the new energy economy, financing net zero and building a better crypto economy.


As it happens: The following are live updates on the highlights of the second day at FII 6th edition. (All timings are GMT)

Saudi Aramco CEO Amin Nasser announced that the company will launch a $1.5 billion sustainability fund to invest in stable and inclusive energy transition technology.

Saudi Arabia’s Crown Prince Mohammed bin Salman announced that the Kingdom’s Public Investment Fund will establish five more regional investment companies, in Jordan, Bahrain, Sudan, Iraq, and Oman.

Noel Quinn, Group CEO of HSBC Holdings: “Our ambition for Net Zero is to employ our balance sheet capability, and our capital markets fund raising capability for the benefit of our clients to make sure to make it available to them the finance they need for their transition journey.”

Fahad Al-Saif, head of global capital finance of Public Investment Fund: “For the past 200 years, the revolution of energy has been the core of industrial revolution. In the coming 30 years, we are supposed to re-engineer that core, whether sectoral based or financial based.”

“Trillions of dollars are required between now and 2050-2060 which is an aggregation of about $100 trillion for the asset managers to seek as capital to deploy for all of us to transition. The issue is today, since the sustainability markets opened, we have only $1 trillion.”

“Within PIF, our commitment to sustainability programs within 13 sectors, we have taken initial steps and these have included setting up the benchmark on how we are able to emphasize that market, not being as an issuer or proceeds taker but more importantly becoming more inclusive in terms of the stakeholders that are relevant to this market. The issue we might be facing is are we all aligned to take the same phase, and not to be affected by the multiple phases, and risking exclusions.”

0921: Plenary on Financing Net Zero with Fahad Al-Saif, head of global capital finance of Public Investment Fund and Noel Quinn, Group CEO of HSBC Holdings.

Mohammed Abunayyan, chairman of ACWA Power: “The government, they are good at being regulators and not operators. I think public-private partnership is the best, the private sector will be able to innovate in finance and finance structuring. I believe it is a matter of how you do it all together.”

“I think we are very lucky in this country… we have a clear, robust strategy on energy. We have a clarity on how to do things in a timely manner and phasing it in a proper time and proper action. The reality today is renewable and the energy transition today for Saudi Arabia, for the youth it would be better in the environmental [aspect] and for other reasons, but it is the best quality of jobs and creating more jobs and having more capacities and more capability increase our ability for our industrialization.”

Dr. Nabeel Al-Amudi, CEO of Olayan Financing Company: “Given the fragility of the world order we are seeing, and therefore the fragility of the energy systems, I don’t want to say it is inevitable… because things might change but there is a need to be regionally more focused, for national champions to become regional champions or even global champions. That is what you need, for regions to look around in terms of the resilience of the energy systems.”

“I am a believer in technology, human ingenuity will hopefully come through… there are many engineers working on things that are much more interesting than talking here at FII.”

Mohammed Abunayyan, chairman of ACWA Power: “I do not want to appear negative, but I think we are seeing these countries and these governments that go through elections, they overpromise and less deliver. It is a good thing that there are countries that do not need to overpromise, these countries would do much, much better. They would make it better, and I could say the best example is Saudi Arabia.”

“Saudi Arabia, the biggest conventional energy [player] in the world… has decided to go 50% renewable and they have put what all it takes to make it happen. It is not about announcing, it is about making it happen.”

“I like what China is doing, I’m pro-China. I’m sorry, people maybe may not like it but I’m pro- China. Because ACWA Power has been very committed with China a long time ago and one of our success factors come from China. I like the way they do it, they just said things and make it happen.”

“People are always talking about energy… and that is very irrelevant to the whole world, but they did not talk about how to make it happen cross-borders. Europe for a very long time they are together but they not together in the energy, every country has its own agenda and every country they are concerned [about] political, social [issues] not to get through another energy source. For Europe to be able to be there, they have to go through what our leaders, and Crown Prince has announced, a country like Saudi Arabia will be a production [source] to the whole world, specially to Europe where we have competitive edge and we could really put a lot of energy to Europe.”

Dr. Nabeel Al-Amudi, CEO of Olayan Financing Company: “The recent crisis shows the fragility of the world order and therefore the fragility of energy system. What we need to build into the discussion is resiliency. How do we make sure that we have a resilient energy system globally, regionally, by country, that is important. What is the role then of the private sector versus the government. Without a clear government direction… the private sector cannot react in terms of investments.”

Mohammed Abunayyan, chairman of ACWA Power: “We are lucky today because the technology is really evolving. What we thought before, it is not economical and cannot be done technically as a baseload is becoming a baseload and renewable. I think the energy transition, what has happened today really has been pushed forward and will really come to stream.”

“In ACWA Power, we have been and still we are, are the disruptive of this sector. I still remember when people were saying that solar was not going to be economical and it is not affordable. Well we brought it to the level today that it is the cheapest production in the whole world.”

“The same thing with wind, the same thing with green hydrogen we have done the same thing, it is happening. As a base load of power plant producing 24 hours it [has] become available and dispatchable. And that is a reality in Dubai, where Noor Energy will be the biggest in earth, renewable plant producing 24 hours as a baseload and it is cheaper than gas before the prices increased.”

“I think the advantage the of renewable versus conventional is the storage of power.”

Gerard Mestrallet, executive chairman of French Agency for Alula Development: “If want to be carbon-neutral in 2050 we need to massive invest in renewables, we are not going quickly enough. We must also invest in hydrogen, because hydrogen would bring the necessary solution for storage.”

“If want to completely transform the energy sector, from the old system to the new system… it will take 20 years. If we try to destroy too early the oil and gas system… we will have an enormous problem of security of supply, that is what we are facing today.”

0840: Plenary on Calibrating The New Energy Economy with Mohammed Abunayyan, chairman of ACWA Power; Dr. Nabeel Al-Amudi, CEO of Olayan Financing Company; Henrik Andersen, president and CEO of Vestas Wind Systems and Gerard Mestrallet, executive chairman of French Agency for Alula Development.

Lord Turner, chairman of the Energy Transitions Commission: “I think it is clear in order to be serious about climate change we have not only peak emissions in this decade, we have to achieve a significant reduction... clearly there had been some bad things for that process towards energy transition, for instance Europe is now burning more coal because it is short of gas ahead of this winter. Overall, what is happening in the world today makes me more confident that we would get significant emission reductions during the 2020s.”

“There is revolution going on in solar. Secondly, the impact of the Ukraine war had been clearly to accelerate plans to head towards renewables, to head toward efficiency, to deals with some of things like planning and permitting barriers that get in the way.”

0821: Plenary on The Energy Transition with Lord Turner, chairman of the Energy Transitions Commission and Stephen Moss, regional chief executive officer for the Middle East, North Africa and Turkey of HSBC Bank Middle East Limited.

Sebastian Kurz, former federal chancellor of Austria: “I don’t think that you can divide government from people or government from the private sector. But of course regarding to the sanctions, if a country invades another country on our continent there was a necessity for EU to react, and the EU did it with sanctions. So I think it was an absolutely understandable decision. What is important whenever you implement sanction that means you should do it in a way that you opponent hit harder than you are hit yourself.”

“I think Russia is definitely hit hard, and I think that everybody who says the Russian economy is not suffering is wrong especially after kicking them out from SWIFT hurt them a lot. On the other hand, the high energy cost they are a major problem for the EU for the moment, nobody in Europe wanted this war. The EU did not want this war.”

Shu Nyatta, founder of Bicycle Capital: “I invest in Latin America, and it is a very schizophrenic business because either we are the friend of the government or the foe of the government depending on what the companies do… you can end up on one side or the other of the geoeconomic debate.”

Stephen Harper, former prime minister of Canada: “We essentially severed our economic relationship with Russia after the invasion of Crimea in 2014. It was our judgment… it was the judgment of our government that Vladimir Putin represented a serious long-term geopolitical threat to the West, to our societies so we wanted to get out of that particular dynamic.”

“If you [Canadian companies] are in places and doing business that is consistent with the national interest and foreign policy objectives of the government of Canada we would do everything we can to assist you, but if you are not you are on your own. The government would not aid you commercially if you are on the wrong side of the geopolitical situation.”

0648: Plenary on The Rise Of Geoeconomics with Sebastian Kurz, former federal chancellor of Austria; Stephen Harper, former prime minister of Canada; Christine Tsai, CEO of 500 Global; André Estevez, senior partner and chairman of BTG Pactual; Shu Nyatta, founder of Bicycle Capital; Edith Yeung, general partner of Race Capital and Dr. Daniel Yergin, vice chairman of S&P Global.

Mohammed Al-Jadaan, Saudi Arabia’s minister of finance: “In this region there is a lot of commitment to reform and that reform is continuing and we have the resources to deliver on the plans. But we need also to be watchful and provide whatever support we can to our region while the world tries to stabilize itself.”

Steven Mnuchin, founder and managing partner of Liberty Strategic Capital: “National security starts with economic security. You need strong economies to create opportunities for people to also fund whatever type of military or other defensive capabilities one needs to.”

“I believe that over the next five years we are gonna see tremendous advances in carbon recapture technology. We should be investing as much money into carbon recapture as we are in other forms for renewables… the short-term solution to the climate [issue] is carbon recapture as opposed to just energy transformation. I think this is obviously a global issue that needs to be dealt with.”

 

 

Sheikh Salman bin Khalifa Al-Khalifa: “We have to start talking on what needs to change about financing the climate crisis, we need to include the financing of fossil fuels as part of the mix. Today, the largest carbon issue you have is coming from the oil and gas sector. And yet you cannot find the financing to put scrubbers on a refinery in Texas, nobody would touch it. If you have carbon coming out of a certain industry you have to provide the financing to clean up big portions of that industry and it is going to be the industry in which you will get the most carbon reduction per dollar deployed, and yet that is not being done.”

Mohammed Al-Jadaan: “Obviously climate change and the impact of climate is a very serious issue and it is not going to be resolved by one country’s effort, it will need to be collaborative. Without the world really cooperating and collaborating to deal with climate change, you are not going to resolve it. I think the world is aware, the world is trying to deal with this, the multilateral institutions are trying to support countries to deal with climate change impact. I can tell you in the region where really, it is not known, but we are making a lot of efforts to actually reduce emission to deal with climate change, to invest in renewables. We are investing as much in conventional energy but we are also investing in climate change initiatives... but it will need to be a global cooperative effort.”

Steven Mnuchin, founder and managing partner of Liberty Strategic Capital: “Doom and gloom was COVID-19. Shutting down the world economy and the cost of doing that both from an economic and health side was extraordinary, and the world came out of that. The challenges we have are not nearly as big.”

Sheikh Salman bin Khalifa Al-Khalifa: “The COVID-19 model is [what] we have tried across everything to do with government execution. You put in place a good solid plan, you make sure that there’s the right entities that need to be there…  they are given the resources and supported with the execution.”

“When you look at the Gulf economies compared to the rest of the world, we see that the picture for GCC economies is a positive one at this stage today even with the multitude of global challenges. Why is that? Because there have very clear well-articulated, strategic development plans that are being executed consistently across the region.”

“Consistently across the region, the biggest driver of growth was non-oil growth in real terms. It was the non-oil growth that was driving the economies… today across the Gulf by and large... the majority of our non-oil GDP is economic activity built around consumption and imports. And the big opportunity is for us to transform those economies into economies that are based on production and exports for the non-oil sector. And as we move from consumption economies to production economies we have a real opportunity set that we are building a strong economic activity.”

Mohammed Al-Jadaan: “I think we are also underestimating our ability to adapt and to deal very quickly with issues… [the] food crisis is one example, the world managed to control the food crisis to a large extent compared to the last few months.”

Steven Mnuchin, founder and managing partner of Liberty Strategic Capital: “A year ago people underestimated the risks… we are now overestimating those risks. All of a sudden everybody is turning incredibly negative.”

“We are seeing very clearly across the world energy security is national security… the world wanted to get off carbon, this transition is gonna take longer. There are source of energy that has to be invested in beyond just renewables.”

“The third point I would say is the geo-political risk, forget the economic risk, is higher than we’ve seen in modern times. I think that the US relation with China… the two largest economies must figure out how to communicate and co-exist… I think the world needs to come together on this situation with Ukraine, we need at least a temporary ceasefire if there is not a long-term solution… we need to deal with these issues and come together on them.”

Sheikh Salman bin Khalifa Al-Khalifa, Bahrain’s minister of finance and national economy: “There are certainly a multitude of challenges that the world faces, inflation is certainly one of them, driven by the disruption in supply chains coming out of COVID-19, compounded by the conflict in Europe and now it is a period where there is food price inflation, energy price inflation and that is a big issue. One of the positive aspects that we are seeing very recently is that shipping costs are coming down.”

“Now it is extremely important to focus on the supply chains, supply chains will play a critical role. We saw Saudi Arabia launch the Global Supply Chain Resilience Initiative and it will be extremely important for countries all over the world to participate and make sure domestically within their region they are building resilience on the supply chain.”

Sheikh Salman bin Khalifa Al-Khalifa, on his outlook: “The danger is we are beginning to see economic activity slow down in many parts of the world at a time inflation is very high, it is further compounded by the fact the at a lot of countries have limited fiscal space coming out of COVID-19. COVID-19 battered the ships, battered the sail and then we are sailing into another storm, and that is what people need to be prepared for.”

Mohammed Al-Jadaan, Saudi Arabia’s minister of finance: “You cannot look at the world in one way… we have seen how the world is almost split into [the] optimistic side that are looking for the future, those who have planned, that who are able to make long-term decisions and prepare themselves for difficult times are reaping the benefits. Those who haven’t are facing difficult times… and the world is going through a very, very difficult time.”

“I think what we need to do is encourage cooperation and collaboration. The world needs stability, predictability for macrofinance to be available, for investment to be available. And that is becoming very difficult with all the shocks we have seen.”

“We are talking with international organizations to try and help, I can tell you within the region what Saudi Arabia did was we mobilized the regional multilateral development institutions to make sure we provide support to countries in the region, but we are also doing our part. We worked with Indonesian presidency in the G20 to provide some support to the world at large but also to the low-income countries and emerging markets when it comes to energy and food. We are providing support bilaterally, and we are making sure we stay the course. We have a vision that we started a few years ago, we prepared ourselves and we are reaping the benefits.”

Mohammed Al-Jadaan, on his outlook six to months ahead: “It is very difficult to predict what is coming to the world, but worldwide it is going to be a very difficult six months. Regional, I think the region is largely split into two areas, one is the Gulf region I think the next 6 months or the next 6 years are going to be actually very good. The wider region is going to be very difficult and it is our role to help that wider region. Worlwide, I think we need to work to ensure that there is more collaboration, cooperation to bring about stability, and that is what we are doing.”

0628: Plenary on The Pulse On Global Macrofinance with Mohammed Al-Jadaan, Saudi Arabia’s minister of finance, meanwhile will sit with his Bahraini counterpart Sheikh Salman Khalifa Alkhalifa and Steven Mnuchin, founder and managing partner of Liberty Strategic Capital.

Nelson Peltz, chief executive and founding partner of Trian Partners: “The most important thing for a CEO is to have glasses that have bifocals… keep eye on next quarter, but needs to have long term vision to understand where the business is going and do they have a plan to get there.”

“We might have fooled ourselves when we invested in Procter and Gamble, we did not buy the whole company, but we looked at it at a vantage point and as a result it was a rocky start to our relationship but it went out to be tremendously profitable for its shareholders.”

“My impression of Saudi Arabia is an old one. But I found to my pleasure a very warm welcoming, informed and intelligent people who have moved so quickly into this century. It is amazing. But more importantly, there is a sense of freedom, warmness, kindness which I was really surprised because I have old impression.”

“The Kingdom got to continue to do what they’re doing. They are on a roll that I would not like to see them get off, just do more of it… be careful when [they] stray off that path.”

0606: Richard Attias, chief executive of FII Institute, opens the second day of the Future Investment Initiative, with a plenary session with Nelson Peltz, chief executive and founding partner of Trian Partners, who will discuss how to ensure success for and through the long-term – across the world, amidst decades of change and turbulence.


Franchises boosting Saudi economy, as Kingdom dominates half of MENA’s $30bn market

Updated 07 March 2025
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Franchises boosting Saudi economy, as Kingdom dominates half of MENA’s $30bn market

JEDDAH: Franchises are proving increasingly vital to Saudi Arabia’s economic development, driving employment, government revenue, and cultural transformation in a youthful nation.

Economic experts have told Arab News that the introduction of a law in 2019, followed by expansion of regulations the following year, helped open the Kingdom up to international businesses, as well as strengthened the relationship between franchisors and franchisees.

These moves, together with the economic expansion of Saudi Arabia as part of the Vision 2030 initiative, means the Kingdom now accounts for nearly half of the $30 billion franchise market in the Middle East and Africa, according to Yaseen Ghulam, associate professor of economics at Riyadh-based Al-Yamamah University.

He told Arab News there is consensus among researchers and industry observers that franchise businesses are expected to grow by more than 20 percent per annum for the coming five years and beyond.

“This presents an exceptional opportunity for international brands to enter the Kingdom through franchising, given the fact that European and North American consumer markets are struggling due to economic uncertainty, unemployment, and higher cost of living,” Ghulam said.

He added that franchise registrations in the Kingdom stood at 1,788 by the end of the third quarter of 2024, up from just 185 three years earlier.

With 1,232 entries, the accommodation and food services sector — which includes lodging facilities, dining establishments, and enterprises associated with tourism — led the registrations, the associate professor said.

Yaseen Ghulam, associate professor of economics and director of research at the Riyadh-based Al-Yamamah University. Supplied

He added that the wholesale and retail division came in second with 689, and the transport and storage sector with 257. An important element of this development, he noted, is more widespread activity, covering almost all major cities, rather than clustered around one particular region or sector.

“With 647 franchise registrations, Riyadh has led the field, followed by Makkah with 363, and the Eastern Province with 225. According to some estimates, over 1,200 brands are available for franchising, and the franchising sector in Saudi Arabia is offering over 10,000 business opportunities.”

Ghulam noted that more than 600 international and 380 local franchise brands are present in the Kingdom, according to the Small and Medium Enterprises General Authority, known as Monsha’at.

Abdullah Al-Maghlouth, a member of the Saudi Economic Association, told Arab News that government support for SMEs through streamlined processes and a business-friendly environment has helped drive the franchise sector. 

He added that the 2019 law bolstered the Kingdom’s business ecosystem, attracting local and international investments through a clear legal framework.

“The 2020 executive regulations complement this by providing a comprehensive legal environment that facilitates franchise operations and ensures guarantees for all parties involved. This enhances transparency between franchisors and franchisees, making the Saudi market increasingly appealing to investors,” Al-Maghlouth said.

Reflecting on the key factors driving growth in the sector in the Kingdom, Ghulam said Monsha’at’s Franchise Center is “aggressively advancing entrepreneurship” through different programs, such as Tomoh. 

He added that trademarks are now fully protected thanks to the Kingdom’s recent successful implementation of an intellectual property rights plan, with online portals making trademark registration and protection simple and accessible. 

Financial guarantees provided by the Kafalah program are also proving to be a factor in sourcing finance from local investors, Ghulam said, and he noted that the Social Development Bank has played a significant role in advancing franchising in the Kingdom. 

The institution provides financing solutions ranging from SR150,000 ($40,000) to SR4 million with a maximum financing length of 8 years as part of its program to assist new franchise developments and expansion.

“Another significant step in bolstering the franchise community is the founding of the Saudi Franchise Association, the Kingdom’s first specialized association. It has worked to promote the idea and culture of business excellence since its foundation. Additionally, it has organized numerous seminars and workshops and signed various partnerships with colleges and chambers of commerce,” said Ghulam.

Arrangements are also in place in Saudi Arabia to support franchise business and provide consulting. For both domestic and international businesses, Arab Franchise Marketing Corporation provides media platforms, administrative and legal services, and new franchise opportunities. “Through useful solutions, they work with a profit system to grow the franchise market in the MENA area, especially in Saudi Arabia,” said the associate professor.

Highlighting how Saudi Vision 2030 has influenced the development of the franchise market, Ghulam said that the objectives of Saudi Arabia’s Vision 2030 are to invest in globally competitive industries, diversify the country’s economy, boost the private sector, and create jobs.

“Following this, one important economic area that is highlighted in Vision 2030 is franchising. For the success of the Vision, a comprehensive legal, regulatory, financial, and economic set up was needed and has been established for the promotion of the private sector to diversify the economy and reduce dependence on the oil sector,” he said.

The development, he added, of the basic and changed framework has indeed helped the private sector grow in the last few years.

Ghulam said that the franchising industry has greatly benefited from Vision 2030, with support mechanisms, new institutions, and financial aid serving as key enablers.

He added that investment in mega projects, sports events, and facilities has created youth employment, raised real wages, and driven demand for sectors like education, health, dining, beauty, and fitness.

This has attracted international franchisors and local investors, fueling significant growth in the sector.

Ghulam emphasized that Vision 2030 has also shifted the mindset of Saudi youth, encouraging private sector roles and self-employment through franchising, offering substantial returns on investment.

He advised foreign brands seeking to expand into the Saudi franchise market that there is significant potential in sectors such as food, retail, and education, as well as health, fitness, and sports.

“More specifically, customers are quite fond of education franchises, including both domestic and international franchises that focus on training, early childhood care, development centers, and tutoring,” Ghulam said.

He continued that Saudi Arabia’s focus on health-related industries has driven high demand for gyms, nutritious food franchises, and medical services, adding that loosened social regulations, particularly for women, and government support for regional designers have boosted the retail sector, particularly fashion.

Al-Maghlouth agreed that beyond traditional sectors like tourism, hospitality, and food, the Saudi franchise market will continue to expand into emerging fields such as technology, education, and healthcare.

“The supportive legal framework will continue to enhance market transparency and drive growth in economic activities, fostering a sustainable investment environment. This will not only benefit all stakeholders but also solidify Saudi Arabia’s position as a leading investment destination in the region.” he said.


Saudi multi-billion-dollar corporations are driving strategic investments in startup ecosystem

Updated 07 March 2025
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Saudi multi-billion-dollar corporations are driving strategic investments in startup ecosystem

  • Kingdom’s corporations aligning with Vision 2030, say experts
  • Aramco Ventures, stc’s tali ventures exemplify dual approach

RIYADH: Saudi Arabia’s corporate venture capital arms are playing a pivotal role in driving innovation and advancing economic diversification by aligning their investment strategies with both national and corporate objectives.

Between 2020 and the third quarter of 2024, corporate investors accounted for 27 percent of the 1,361 unique investors in the Middle East and North Africa region, deploying approximately $380 million, according to a report by MAGNiTT.

Saudi Arabia saw the highest ratio, with CVC’s making up 30 percent of local unique investors.

Funds such as Aramco Ventures and stc’s tali ventures exemplify this dual-purpose approach. By leveraging their resources and expertise, these CVCs are fostering startups that align with the Kingdom’s Vision 2030 agenda while simultaneously advancing the strategic and operational goals of their parent companies.

According to Stephane Ulcakar, associate director and head of corporate and government financial services at Arthur D. Little, these funds stand out due to their scale and strategic scope.

“Aramco Ventures recently secured an additional $4 billion in funding, raising its total capital to $7 billion,” Ulcakar noted in an interview with Arab News, adding that stc has also collaborated with global players like SoftBank and the Saudi Public Investment Fund to broaden its reach.

This alignment extends to specific investment sectors. In an interview with Arab News, Arjun Singh, partner and global head of fintech at ADL, explained: “These arms — and their affiliated funds — are not just looking for the next big thing but also for startups that can integrate seamlessly into their parent companies’ operations.”

Stc’s tali ventures prioritizes fintech, artificial intelligence, and blockchain, reflecting both the nation’s and its parent company’s ambitions to champion Saudi Arabia’s digital economy.

stc Group, tali ventures, and Cohere announced a strategic collaboration in February. File

Similarly, Aramco’s Wa’ed Ventures focuses on startups that advance the Kingdom’s digital transformation while complementing Aramco’s strategic objectives.

Beyond funding, Saudi CVCs bring a distinct set of advantages to startups by leveraging industry expertise, supply chain networks, and expansive ecosystems.

Ulcakar highlighted the role of national initiatives such as the PIF’s National Development Strategy in addressing supply chain gaps and reshaping logistics.

Startups backed by these CVCs gain access to infrastructure and pilot programs within large ecosystems, which help refine their offerings.

“Certain well-known national players have partnered with startups to integrate advanced technologies into their supply chain operations, testing solutions like automation and predictive analytics,” Ulcakar stated.

Singh emphasized how this approach accelerates innovation, particularly in regulated industries like fintech and healthcare.

“Startups backed by corporate investors show stronger performance, as these partnerships can significantly accelerate regulatory approval processes and market entry,” he said.

Saudi National Bank’s venture capital arm is an example of an organization enabling fintech startups to scale efficiently by offering regulatory navigation support and access to a large customer base, he added.

“The Saudi VC market is undoubtedly burgeoning, with abundant demand for bankable capital and distinct funding and technical advantages brought by various players on the supply side,” Ulcakar said.

The market’s maturation is evident, with funding reaching $987 million in 2022, and CVCs accounting for 32 percent of all deals — a significant rise from less than 15 percent in 2018.

This growth is not limited to Aramco and stc — banks including SNB Capital, Riyad Bank and SAB are emerging as key players, further diversifying the funding landscape.

Additionally, Saudi Venture Capital continues to act as a catalyst for the ecosystem, having deployed over SR3.4 billion ($905.7 million) through direct and indirect investments.

This has propelled Saudi Arabia to capture the highest share of total VC funding in the MENA region, reaching 54 percent in the first half of 2024, up from 38 percent during the same period in 2023.

The Kingdom’s VC ecosystem is marked by a collaborative dynamic between corporate and traditional VCs.

Singh highlighted that “87 percent of CVC-backed deals in 2022-23 included traditional VC participation.”

This high rate of co-investment reflects a complementary relationship, where both types of investors contribute to building a more sophisticated, institutionalized ecosystem.

Singh noted that this coordinated evolution spans multiple sectors and is essential to creating a sustainable innovation landscape aligned with Saudi Arabia’s Vision 2030.

Looking ahead, the key question is how this ecosystem will consolidate further, potentially positioning the Kingdom as a global private capital hub.

“The diversity of approaches — from direct CVC arms to partnerships with established VC firms — demonstrates the market’s growing maturity and suggests a sustainable growth trajectory,” Ulcakar stated.

This progress is a critical component of the Kingdom’s strategy to establish itself as a leader in technology and innovation.

In sectors such as energy and logistics, Saudi Arabia’s CVCs are playing a pivotal role in driving innovation.

Ulcakar explained that the Kingdom is leveraging its global footprint to balance present needs with future aspirations.

Investments in fossil fuel infrastructure, for example, are complemented by efforts to localize electric vehicle technologies and pioneer nuclear fusion projects. These investments often blend incremental improvements with disruptive technologies, creating a dual pathway for transformation.

CVC arms are distinctive in their dual mandate to achieve financial returns while pursuing strategic objectives for their parent companies.

This dual focus shapes their investment and risk management philosophies, setting them apart from independent venture capital firms.

Singh said: “Unlike traditional VCs, which prioritize financial exits and short-term gains, Saudi CVCs often adopt a longer-term, patient capital strategy.”

This approach allows them to align their investments with their parent companies’ strategic goals, even if such opportunities involve higher initial risks or extended timelines.

For instance, Aramco Ventures invests in clean energy and carbon capture technologies, aligning with the parent company’s energy transition and sustainability goals.

These investments represent long-term bets with strategic implications, demonstrating a willingness to prioritize alignment with corporate objectives over immediate financial returns.

Similarly, tali ventures focuses on digital innovation while reinforcing stc’s leadership in telecommunications and digital services.

By investing in startups, tali ventures not only targets financial returns but also strengthens stc’s digital payments ecosystem, creating synergies that benefit the parent company’s broader ambitions.

Singh highlighted this dual approach as a key differentiator, noting that these capabilities enable Saudi Arabia CVCs to pursue opportunities that might otherwise be deemed too risky by independent VCs.

Ulcakar emphasized the nuanced nature of this approach. “The ability to generate both financial and strategic returns represents a unique advantage and a complex challenge in this growth market. There is no one-size-fits-all answer,” he said.

Ulcakar also noted that Saudi Arabia is one of the few growth markets that has successfully financed its own development, with investor preferences gradually evolving.

“We observe a gradual shift toward prioritizing financial returns over strategic ones, aligning with the Kingdom’s evolving investment goals,” he added.


Oil Updates — crude set for biggest weekly drop since Oct on tariff uncertainty, supply gains

Updated 07 March 2025
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Oil Updates — crude set for biggest weekly drop since Oct on tariff uncertainty, supply gains

  • US tariff suspension for Mexico, Canada provides temporary reprieve
  • But trade war risks and OPEC+ supply increase weigh on market

NEW DELHI: Oil prices were little changed on Friday but were set for their biggest weekly decline since October as the uncertainty around US tariff policy is creating concerns about demand growth at the same time major producers are set to increase output.

Brent futures rose 17 cents, or 0.24 percent, to $69.63 a barrel by 6:15 a.m. Saudi time. US West Texas Intermediate futures rose 12 cents, or 0.18 percent, to $66.48 a barrel.

However, for the week Brent is down 4.9 percent, set for its biggest weekly decline since the week of Oct. 14. WTI is set to drop 4.8 percent, also its biggest weekly fall since that week.

Markets, including oil, have been whipsawed by fluctuating trade policy in the US, the world’s biggest oil consumer.

“It looks like the financial markets are in full panic mode, no longer easily pacified by Trump’s one-month postponements and exemptions on import tariffs,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

“That leaves crude stuck around four-month lows, albeit vulnerable to further slides,” she added.

On Thursday, US President Donald Trump suspended the 25 percent tariffs he had imposed on most goods from Canada and Mexico until April 2, although steel and aluminum tariffs would still go into effect on March 12 as scheduled.

The amended order does not fully cover Canadian energy products, which are under a separate 10 percent levy.

The tariffs themselves are considered a drag on economic growth and therefore oil demand growth. But the uncertainty over the policy is also slowing business decisions, which is also impacting the economy.

“The risks to oil prices remain tilted to the downside with new supply from OPEC+ and non-OPEC producers expected to push the market well into an oversupply,” Fitch’s research unit, BMI, said in a note.

Brent prices on Wednesday fell to their lowest since December 2021 after US crude inventories rose and in the wake of the decision by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to increase their output quotas.

The group said on Monday that it had decided to proceed with a planned April output increase, adding 138,000 barrels per day to the market.

Some of the downward momentum in prices has eased as the US is looking at steps to halt exports from key OPEC producer Iran.

“We are going to shut down Iran’s oil sector and drone manufacturing capabilities,” US Treasury Secretary Scott Bessent said in his first major speech to Wall Street executives.

Reuters reported on Thursday that Trump is considering a plan to inspect Iranian oil tankers at sea using an accord aimed at weapons of mass destruction, according to sources, part of the US president’s “maximum pressure” to drive Iranian oil exports down to zero.


In speech to Congress, Trump reassures investors that new visa scheme would not tax foreign assets

Updated 07 March 2025
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In speech to Congress, Trump reassures investors that new visa scheme would not tax foreign assets

  • Taxing foreign assets was a concern despite big enthusiasm for new scheme, pundits had told Arab News
  • “This move certainly removes a significant barrier for Saudi and Gulf investors who were previously wary of US residency due to FATCA’s global tax implications,” Al-Ansari tells Arab News.

RIYADH: President Donald Trump assured that investors entering the US under the newly introduced $5 million “Gold Card” visa program will not be subject to taxes on their foreign assets.

This assurance comes as Trump and his administration seek to attract high-net-worth individuals from around the world by offering a direct pathway to US residency and citizenship.

Addressing Congress on March 4, Trump outlined the program’s structure. “They (investors) won’t have to pay tax from where they came, the money that they’ve made, you wouldn’t want to do that. But they have to pay tax (in the US) and create jobs,” he said.

His remarks came as a reassurance to prospective investors who may have been concerned about the Foreign Account Tax Compliance Act, which has deterred some wealthy individuals from seeking US residency due to global taxation concerns.

Arab News raised this concern in a previous article following Trump’s announcement of the new initiative.

Now that the president has cleared that doubt and reassured investors that their assets abroad won’t be taxed, Salman Al-Ansari, a geopolitical analyst and former US investor, emphasized that the Gold Card exemption is a game-changer.

“This move certainly removes a significant barrier for Saudi and Gulf investors who were previously wary of US residency due to FATCA’s global tax implications,” he told Arab News in an interview.

Al-Ansari added that this exemption “is a clear indication that his administration is responsive to global investor concerns.”

Salman Al-Ansari. Supplied

However, he noted that despite this strong incentive, long-term concerns about possible changes in US tax policy are likely to remain. “Investors in the region understand that tax policies can change with different administrations, so some may still approach with caution, opting for structures that offer flexibility in case future regulations become less favorable,” Al-Ansari added.


Read: Will Trump strike gold with wealthy Arabs through new residency program?


The new initiative will replace the existing EB-5 visa program, which was originally designed to grant permanent residency to investors who contributed at least $1 million to a US business that created or sustained at least 10 jobs for American workers.

Trump emphasized to Congress that the initiative would address talent retention by allowing investors to fund and support highly skilled graduates from top US universities, preventing them from being forced to leave the country.

The US faces stiff competition from other nations with established golden visa programs, particularly Gulf nations like Saudi Arabia, which have successfully attracted high-net-worth individuals through similar initiatives.

On whether Saudi investors will become more selective about US investments due to domestic taxation under the Gold Card visa, Al-Ansari noted: “The exemption of foreign assets is a strong incentive, but the fact that income generated within the US is still taxable means that Saudi investors will likely be more strategic in their choices.”

He added: “They may favor sectors that offer higher tax efficiencies, such as real estate, energy, or industries benefiting from tax incentives.”

However, Al-Ansari said that as long as the US provides a stable business environment and competitive opportunities, taxation within the country is a reasonable tradeoff.

“The key factor for Saudi investors will be the ease of doing business and whether the Gold Card visa comes with additional facilitations that make investments more attractive beyond the tax benefits,” he concluded.

By structuring the Gold Card visa to exempt foreign assets from US taxation, Trump’s administration is positioning the program as an attractive alternative to other golden visa schemes worldwide.

Investors from the Gulf, who have already benefited from similar residency programs in their home countries, may now see the US as an increasingly viable destination for expanding their businesses and securing long-term financial stability.

As highlighted in a previous report by Arab News, the initiative is being closely watched due to its potential to attract substantial foreign capital, especially from countries like Saudi Arabia, the UAE, and Qatar.

Despite global competition from established golden visa programs, the US remains an appealing destination for investors, due to its business environment, talent pool, and real estate opportunities.

With the added benefit of no taxation on foreign assets, the Gold Card program is seen as a highly attractive option for investors looking to expand their businesses and secure long-term financial stability in the US.


Direct flights from Stuttgart to Jeddah to begin later this year

Updated 06 March 2025
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Direct flights from Stuttgart to Jeddah to begin later this year

RIYADH: Direct flights from Stuttgart, Germany, to Jeddah, will begin in the second half of 2025 and operate twice a week, the Saudi Air Connectivity Program has announced.

Inaugurated in collaboration with the Saudi Tourism Authority and Jeddah Airports Co., the route is set to utilize an A321neo aircraft with a capacity of 224 seats, according to the Kingdom’s press agency.

This move aims to increase the capacity of travelers and visitors from Europe to Saudi Arabia, aligning with the government’s aviation goal of transporting 330 million passengers across over 250 destinations, as well as 4.5 million tonnes of air cargo, by 2030.

Majid Khan, CEO of ACP, said the collaboration with German low-cost carrier Eurowings — a wholly owned subsidiary of the Lufthansa Group — is advancing well in enhancing air connections between Saudi Arabia and Europe.

He further expressed confidence in forming a long-term partnership with the airline to broaden the network of flight routes in the future, offering travelers new opportunities to experience the Kingdom’s historical and cultural sites.

This falls in line with ACP’s goal to boost tourism in Saudi Arabia by enhancing air connectivity between the Kingdom and international destinations, broadening existing flight routes, and establishing connections to new global markets.

As the driving force behind the National Tourism Strategy and Saudi aviation strategy, ACP promotes collaboration and partnerships between crucial public and private sector players in the tourism and aviation sectors. Its objective is to enhance the Kingdom’s status as a premier global hub for air travel connectivity.