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Saudi Arabia’s digital lead in education opens up investment opportunities

By supporting innovative edutech solutions, investors play a crucial role in shaping the future of education and providing Saudis with modern, accessible, and personalized learning experiences. (AFP)
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Updated 01 October 2024
Nour El-Shaeri
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Saudi Arabia’s digital lead in education opens up investment opportunities

  • Kingdom’s edutech landscape offers numerous opportunities for both local and foreign investors
Updated 01 October 2024
Nour El-Shaeri

CAIRO: Saudi Arabia is making significant strides in education technology, with substantial investments aimed at transforming and enhancing the sector.

The Kingdom’s government is actively promoting initiatives in this field, also known as edutech, recognizing their potential to revolutionize the schooling system.

According to industry experts, the Kingdom’s edutech landscape offers numerous opportunities for both local and foreign investors.

Venture data platform MAGNiTT has revealed the edutech sector is now one of the top five most-funded fields in the Kingdom.

In 2023, the industry saw a total of $50 million raised by Saudi-based startups, a 6 percent growth from the year before.

Furthermore, the edutech sector in the Kingdom witnessed substantial growth in 2022, surging by 2,069 percent compared to the previous year.

Nasser Al-Shareef, senior adviser of investment and privatization at the Saudi Ministry of Education, reiterated the possibilities for the industry in an article for Arab News earlier this year.

“By investing in education technology, both local and international investors can tap into a rapidly growing market with a high demand for innovative educational solutions. Saudi Arabia’s large youth population, coupled with its strong focus on education and digital transformation, creates a fertile ground for edutech investments,” he said.

“The Saudi government is supporting the growth of the edutech sector through various initiatives, policies, and funding programs. This support includes financial incentives, regulatory reforms, and partnerships with educational institutions. These measures not only attract investment but also provide a conducive environment for edutech startups to flourish,” he added.

Al-Shareef further stated that investing in the Kingdom’s edutech field offers opportunities across various segments of the education ecosystem.

This includes online learning platforms, virtual classrooms, and adaptive learning technologies, as well as educational content development, teachers’ training, and more.

“The potential for scalability and market penetration is significant, considering the increasing adoption of technology in schools, universities, and lifelong learning programs,” he added.

A national vision

Investing in Saudi edutech aligns with the Kingdom’s vision of establishing a knowledge-based economy, according to Al-Shareef.

By supporting innovative edutech solutions, investors play a crucial role in shaping the future of education and providing Saudis with modern, accessible, and personalized learning experiences. 

The edtech industry is likely to make a significant contribution to the Saudi economy, especially after the privatization of the education sector.

Salem Ghanem, CEO of Faheem

The Vision 2030 initiative, which seeks to diversify the economy and reduce reliance on oil, is a significant driver behind the Kingdom’s investment in edutech.

The Saudi government has identified the development of a knowledge-based economy and the improvement of education quality as essential goals. Edutech is considered a key enabler in achieving these objectives.

Various government programs and initiatives have been launched to support the growth of edutech startups and companies in the country, Al-Shareef explained.

“For example, the Ministry of Investment has introduced initiatives to attract foreign investment in the edutech sector. These initiatives include offering incentives and streamlined processes for setting up edutech companies in the Kingdom,” he said.

An entrepreneurial spirit

Private investors have also shown increasing interest in the Saudi edutech sector. Venture capital firms and private equity holders are actively investing in edutech startups, recognizing the sector’s growth potential, Al-Shareef added.

Speaking to Arab News, Salem Ghanem – CEO of Saudi-based edutech startup Faheem – emphasized the critical role of digital tools in supporting the national vision.

“The edtech industry is likely to make a significant contribution to the Saudi economy, especially after the privatization of the education sector following the Kingdom’s Vision 2030,” Ghanem said.

He added: “The impact will be apparent in the created job opportunities and the decreasing unemployment rates, taking into consideration that the tutoring market could create an estimated 45,000 to 60,000 job opportunities.”

In an interview with Arab News, Mohamed Zohair, CEO and founder of Saudi-based YaSchools, emphasized the significant rise of the Kingdom’s edutech sector.

“The Saudi market, in general, is an excellent market, and the current period is more mature than before, especially with the unprecedented support in digital transformation, financial services, and accompanying legislation and regulations,” Zohair said.

Al-Shareef further emphasized Zohair’s point, stating that Saudi Arabia has witnessed a surge in venture capital investments in edutech startups, with three of the top 10 most-funded startups in the Middle East and North Africa region originating from the Kingdom.

“The increase in venture capital investments has had a significant impact on the sector in Saudi Arabia. It has provided a boost to the growth and development of edutech startups by injecting much-needed funding and resources into the sector,” Al-Shareef explained.

“With greater access to capital, these startups have been able to innovate, expand their operations, and enhance their technological solutions,” he added.

According to Al-Shareef, the influx of venture capital has drawn attention from both local and international investors, creating a favorable investment climate for the edutech sector in Saudi Arabia.

This increased investor interest has provided financial support and brought valuable expertise, mentorship, and networking opportunities to startups.

Furthermore, the availability of venture capital has enabled startups to attract and retain top talent by offering competitive salaries, benefits, and career growth opportunities.

This has helped build a skilled workforce in the edutech sector and drive innovation.

Overall, the rise in venture capital investments has fueled the growth and transformation of the edutech industry in Saudi Arabia, positioning it as a key player in the regional digital schooling landscape and contributing to the advancement of education and learning technologies in the Kingdom. 

Topics: startups Saudi Education

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Saudi Arabia’s GACA ushers in new era of passenger experience with AI

Updated 21 November 2024
MOHAMMED AL-KINANI
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Saudi Arabia’s GACA ushers in new era of passenger experience with AI

Updated 21 November 2024
MOHAMMED AL-KINANI

JEDDAH: Saudi Arabia’s aviation authority is revolutionizing the passenger experience by incorporating artificial intelligence into its services, in alignment with the nation’s strategic aviation plan, a senior Saudi official said.

At the 2024 Global Civil Aviation Forum in Shanghai, Abdulaziz bin Abdullah Al-Dahmash, vice president of the General Authority of Civil Aviation for Quality and Passenger Experience, highlighted the authority’s ongoing initiatives designed to improve passenger satisfaction.

A session dedicated to GACA’s role in enhancing the passenger experience featured international experts and focused on the authority's efforts to align with Saudi Arabia's aviation strategy and Vision 2030.

The discussion underscored Saudi Arabia's use of data analytics and AI to transform the aviation sector, supporting the National Aviation Strategy and the broader Vision 2030 objectives. This approach is part of the Kingdom's goal to achieve excellence in both aviation services and infrastructure.

The National Aviation Strategy serves as a roadmap to solidify Saudi Arabia’s position as a global leader in tourism, business travel, and logistics. Built around three core pillars — empowering national tourism, improving domestic aviation, and aligning with Vision 2030 — the strategy aims to enhance interconnectivity, increase the market share of national carriers, and expand airport infrastructure.

By leveraging its strategic location and investment potential, Saudi Arabia’s aviation strategy directly contributes to Vision 2030, which aims to strengthen services and bolster the travel and logistics sectors.

Al-Dahmash noted that to achieve the National Aviation Strategy’s ambitious goals, which include tripling passenger traffic to 330 million annually by 2030, Saudi Arabia is prioritizing major infrastructure projects.

This includes constructing new airports, such as the King Salman International Airport, and expanding existing ones to accommodate the surge in passenger numbers. Alongside this, there is a strong focus on improving operational efficiency and enhancing the overall passenger experience.

In this context, GACA is actively developing and implementing programs to meet evolving passenger expectations. One such innovation is the introduction of AI-powered systems that manage and monitor passenger flow, tracking wait times across Saudi airports.

Additionally, the “Bagless Traveler” initiative is transforming the travel process by enabling passengers to complete check-in and baggage handling from their accommodation. During its pilot phase, the service successfully assisted over one million passengers, with more than 2 million bags processed without incident.

Al-Dahmash also emphasized the importance of regulatory frameworks that GACA has implemented, noting that these efforts have significantly improved services at Saudi airports, leading to higher levels of passenger satisfaction. This success has garnered recognition, with several airports receiving local and international awards.

Moreover, GACA has presented its innovative passenger experience programs at global conferences, sharing its best practices with civil aviation authorities worldwide, demonstrating how others can leverage these advancements for similar success.

Topics: GACA aviation

Closing Bell: Saudi main index slips to close at 11,840

Updated 21 November 2024
REEM WALID 
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Closing Bell: Saudi main index slips to close at 11,840

  • Parallel market Nomu gained 681.17 points, or 2.28%, to close at 30,540.28
  • MSCI Tadawul Index lost 4.52 points, or 0.30%, to close at 1,486.82
Updated 21 November 2024
REEM WALID 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Thursday, losing 27.40 points, or 0.23 percent, to close at 11,840.52. 

The total trading turnover of the benchmark index was SR5.39 billion ($1.43 billion), as 98 of the stocks advanced and 131 retreated. 

The Kingdom’s parallel market Nomu gained 681.17 points, or 2.28 percent, to close at 30,540.28. This comes as 63 of the listed stocks advanced, while 23 retreated. 

The MSCI Tadawul Index lost 4.52 points, or 0.30 percent, to close at 1,486.82. 

The best-performing stock of the day was Al-Baha Investment and Development Co., whose share price surged 10 percent to SR0.33. 

Other strong performers included Saudi Reinsurance Co., with a 7.05 percent increase in its share price to SR43.30, and Saudi Chemical Co., which saw its share price rise 5.46 percent to SR10.24. 

Saudi Cable Co. recorded the largest decline, with its share price dropping 4.02 percent to SR97.90. 

CHUBB Arabia Cooperative Insurance Co. also saw its stock fall 3.13 percent to SR49.50. 

Naseej International Trading Co. experienced a 2.64 percent drop in its share price, which fell to SR92.30. 

On the announcements front, Saudi Awwal Bank has disclosed its intention to issue an SR-denominated Additional Tier 1 Sukuk through a private placement in the Kingdom, as part of its SR20 billion Additional Tier 1 Sukuk issuance program. 

According to a Tadawul statement, the bank has appointed HSBC Saudi Arabia as the sole lead manager for the proposed offer. The statement said the purpose of the issuance is to strengthen the bank’s capital base and support the achievement of its long-term strategic objectives. 

The amount and terms of the sukuk will be determined at a later stage, based on market conditions at that time. 

Saudi Awwal Bank closed the session at SR31.40, down 0.63 percent. 

The Saudi Investment Bank has announced the completion of its US dollar-denominated Additional Tier 1 capital sustainable sukuk offering under its Additional Tier 1 capital sukuk program. 

A bourse filing revealed that the offer is valued at $750 million, comprising 3,750 sukuk with a par value of $200,000 each and a return of 6.275 percent. 

The sukuk have a perpetual maturity, callable after five years. Settlement of the sukuk issuance is scheduled for Nov. 27, and the sukuk will be listed on the London Stock Exchange’s International Securities Market. 

Saudi Investment Bank closed the session at SR13.88, down 0.29 percent. 

Topics: Saudi Arabia TASI Closing Bell Saudi Stock Exchange (Tadawul) MSCI Tadawul Index TASI Nomu Tadawul All Share Index (TASI) Tadawul

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Aramco to increase borrowing, focus on dividend growth, CFO says

Updated 21 November 2024
Reem Walid
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Aramco to increase borrowing, focus on dividend growth, CFO says

Updated 21 November 2024
Reem Walid

RIYADH: Saudi Aramco plans to increase borrowing and focus on enhancing its dividend distribution strategy, revealed the company’s chief financial officer. 

In an interview with Bloomberg, Ziad Al-Murshed explained that this move is part of the company’s efforts to optimize its capital structure. 

Aramco is considered one of the pillars of the Saudi economy, encompassing the entire oil production chain, from hydrocarbon extraction to energy generation, as well as refining and commercial distribution activities.  

“You’ll see us do a couple of things. One is, just take on more debt compared to use of equity,” Al-Murshed said during the interview. 

“It’s nothing to do with the dividend, it is optimizing our capital structure so that we end up with a lower weighted average cost of capital,” he added. 

Aramco returned to the debt market earlier this year after a three-year hiatus, raising $9 billion in two separate issuances. In June, it launched a $6 billion offering of dollar-denominated bonds, followed by a $3 billion issuance of Islamic bonds in September.   

The CFO noted: “We had the luxury of sitting out those three years until the market became conducive.” 

Al-Murshed provided insight into how the company increased its dividend by 4 percent in each of the past two years and is now paying over $81 billion in base dividends. 

“We’re looking for it to be progressive over the years,” he said, adding that the company’s free cash flow supports this strategy. 

While the company plans to issue debt regularly, Al-Murshed emphasized that it will not be overly frequent and revealed that Aramco has no plans to sell more debt for the remainder of 2024. 

“We want to be active, but we don’t want to be too active,” he said. 

The CFO further clarified that the company’s decision to sell debt is primarily aimed at broadening its investor base. 

Al-Murshed did not specify whether Aramco would borrow to support its dividend payments, which are set to total $124 billion this year, exceeding the company’s earnings. 

Earlier this month, Aramco reported a net profit of SR103.37 billion ($27.52 billion) for the third quarter of 2024, exceeding analyst expectations, which had projected a median net income of $26.9 billion. 

However, in a statement released at the time, the company noted a 15.4 percent decline in net profit compared to the same period in 2023, attributed to challenging market conditions, including lower prices for crude oil, refined products, and chemicals. 

Aramco’s vision remains to be the world’s leading integrated energy and chemicals company, operating in a safe, sustainable, and reliable manner.   

Topics: Aramco Saudi Aramco

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Saudi Arabia's Ma’aden proceeds with $10bn capital raise to boost phosphate stake

Updated 21 November 2024
MIGUEL HADCHITY 
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Saudi Arabia's Ma’aden proceeds with $10bn capital raise to boost phosphate stake

  • Ma’aden said its shareholders will convene virtually on Dec. 11 to approve the capital increase
  • Plan includes issuing 111 million new ordinary shares valued at SR10 each
Updated 21 November 2024
MIGUEL HADCHITY 

RIYADH: Saudi Arabian Mining Co., or Ma’aden, has issued a shareholder circular outlining the terms of its plan to raise its share capital to SR38.03 billion ($10.1 billion) from SR36.92 billion to boost its phosphate business. 

The move follows an earlier announcement to acquire a 25 percent stake in Ma’aden Wa’ad Al-Shamal Phosphate Co. from Mosaic Phosphates B.V., increasing its ownership in the joint venture to 85 percent. 

In April, Ma’aden announced the signing of an agreement to acquire 210.93 million shares owned by Mosaic Co. and its subsidiary, Mosaic Phosphates B.V. Regulatory approval for the transaction was granted in November by the Capital Market Authority.

In a bourse filing, Ma’aden said its shareholders will convene virtually on Dec. 11 to approve the capital increase. The plan includes issuing 111 million new ordinary shares valued at SR10 each, representing a 3.01 percent rise in the company’s share capital. 

In exchange, Mosaic Phosphates will transfer its MWSPC stake to Ma’aden, aligning with the Saudi firm’s strategic expansion in the phosphate sector. 

MWSPC, established in 2014 and based in Turaif, is a joint venture between Ma’aden, Mosaic Co., and Saudi Basic Industries Corp. Following the transaction, SABIC will retain its 15 percent stake while Ma’aden strengthens its position as a global phosphate leader. 

Mosaic Netherlands Holding Co., a subsidiary of Mosaic Co., will receive the newly issued shares, which will be subject to a three-year lock-up period. Limited transfers will begin in the fourth year, with full tradability by the fifth year, the circular said. 

The acquisition will enhance Ma’aden’s control over MWSPC, recognized as a low-cost, large-scale phosphate producer. It will also grant Ma’aden access to Mosaic’s marketing rights, a component of the deal’s valuation at SR5.62 billion. 

Ma’aden expects increased earnings per share following the transaction, reflecting anticipated synergies and enhanced operational efficiencies, according to the document. 

The company assured shareholders that all regulatory approvals for the transaction have been secured, with a detailed timeline for procedural steps provided in the circular. 

The move underscores Ma’aden’s commitment to driving value creation in the Kingdom’s mining sector, aligning with Saudi Vision 2030 goals to diversify the economy and develop industrial capabilities. 

In the first half of this year, Ma’aden achieved a net profit of SR2 billion, marking a 160 percent increase compared to the same period in 2023. 

The surge in profitability was driven by several key factors. A major contributor to this financial success was the significant boost in sales volume, according to a Tadawul statement. 

The company’s robust performance in primary aluminum and gold sales played a crucial role in driving up revenues. Ma’aden also benefited from reductions in raw material costs and lower depreciation expenses, which further enhanced its profitability. 

Ma’aden’s performance and strategic advancements underscore its commitment to leading the mining sector and contributing to Saudi Arabia’s economic diversification goals, particularly in developing mining as a critical pillar of the Kingdom’s industry. 

Topics: Saudi Arabia Mining Saudi Arabian Mining Co. (Ma’aden) Ma’aden Saudi mining

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Saudi Urban 20 delegation emphasizes need for frameworks to tackle development issues 

Updated 21 November 2024
Nour El-Shaeri 
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Saudi Urban 20 delegation emphasizes need for frameworks to tackle development issues 

Updated 21 November 2024
Nour El-Shaeri 

RIYADH: Saudi Arabia emphasized the need for comprehensive strategic frameworks to tackle global economic, climate, and development challenges during the seventh Urban 20 Summit in Rio de Janeiro. 

A delegation led by Fahd Al-Rasheed, adviser to the General Secretariat of the Saudi Council of Ministers, participated in several key discussions at the event, highlighting the Kingdom’s urban development strategies and its commitment to sustainability, social inclusion, and economic empowerment on a global scale. 

Speaking about the country’s approach to urban transformation, Al-Rasheed said: “Saudi Arabia has adopted a comprehensive strategic framework for urban development and transformation that empowers city leadership to pursue the initiatives that drive their growth and success.” 

He also underlined that the U20, which unites cities from G20 member states, is vital in facilitating tools such as financing models to support cities in achieving their goals. 

Al-Rasheed gave those remarks during a panel discussion titled “Empowering Cities on their Own Paths to Development,” which included global urban leaders such as Edward Glaeser of Harvard University, Nasiphi Moya, mayor of Pretoria, and Kate Gallego, mayor of Phoenix. 

At the summit, Al-Rasheed also attended the launch of the first U20 book, a compilation of insights from global urbanists addressing shared challenges faced by metropolizes. 

His contribution, titled “Enlightened City Leadership: A New Model for a Sustainable Urban Future,” highlighted the importance of training city leaders to manage the complexities of modern urban administration. 

“Delivering on urban development imperatives requires comprehensive strategic planning that embraces governance, resourcing, and competitive advantage,” he remarked. 

Al-Rasheed pointed to projections that cities with populations exceeding 1 million will increase from 700 today to 1,600 by 2080. 

To meet the growing demand, he underlined that approximately 2 million urban leadership professionals will need to be trained over the next 35 years. 

“Urban development plans must include mechanisms to address pervasive issues, including poverty and social inclusion while preparing the next generation of city leaders to confront the deluge of challenges that cities will continue to face worldwide,” he said. 

The Urban 20 event in Brazil. Supplied

Al-Rasheed further explained that although many institutions offer training in disciplines such as urban planning, civil engineering, and public administration, there remains a lack of programs providing a comprehensive curriculum specifically focused on preparing city leaders to address both the technical and socioeconomic aspects of their roles. 

The U20 summit concluded with a closed-door session attended by Luiz Inacio Lula da Silva, president of Brazil, where Al-Rasheed reiterated the Kingdom’s commitment to sustainability and social equity in urban development. 

“We are proud to represent Saudi Arabia’s unique perspective and experience in urban development on this important global stage,” he said, according to press release, adding: “We look forward to continuing Saudi Arabia’s legacy of leadership at the Urban 20 and to continuing our work with urban leaders from around the world to unify city voices around common challenges.” 

Among the highlights of the delegation’s activities was a mayoral dinner co-hosted by Al-Rasheed and Eduardo Paes, mayor of Rio de Janeiro and chair of this year’s Urban 20. 

The event brought together more than 100 city leaders, including the mayors of major cities such as Paris, Pretoria, Helsinki, and Phoenix, to celebrate civic leadership and its impact on urban development. 

Representatives from multinational organizations, such as Anaclaudia Rossbach, executive director of UN-Habitat, also attended the gathering.

In his opening remarks at the dinner, Al-Rasheed said: “Mayoral leadership calls for a unique combination of abilities to anticipate and navigate future trends, including technological disruptions, economic shifts, and demographic changes, while demonstrating the social sensitivity to care for and improve citizens’ daily lives.” 

He added: “By convening senior city leaders from around the world to address the common challenges of urban development and city leadership, Saudi Arabia continues to demonstrate its commitment to global collaboration in the spirit of the Urban 20.”

Topics: G20 Urban 20 (U20) mayors summit Fahd Al-Rasheed

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