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Startup Wrap – cross-border funding and acquisitions flourish as MENA activity steps up 

US-based AI platform aiXplain benefitted from a pre-series A funding round led by venture capital firm Wa’ed Ventures. Supplied
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Updated 19 July 2024
Nour El-Shaeri 
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Startup Wrap – cross-border funding and acquisitions flourish as MENA activity steps up 

Updated 19 July 2024
Nour El-Shaeri 

CAIRO: Regional startup activity has seen many acquisitions and funding rounds in recent weeks, with climate technology, artificial intelligence, and Web3 garnering the most attention. 

Saudi Arabia’s venture capital firm Wa’ed Ventures, a $500-million Aramco subsidiary, led California-based AI platform aiXplain’s $6.5 million pre-series A funding round. 

Backed by US-based firms including Transform VC and Calibrate VC, aiXplain has raised a total of $16.5 million since its inception, aiming for a global rollout of AI solutions. 

Founded in 2020 by Hassan Sawaf, aiXplain has designed an integrated platform to simplify the creation, deployment, and management of AI solutions. 

The company aims to democratize access to AI innovation by enabling the building of advanced solutions through natural language prompts for users with no coding background. 

This approach allows businesses to maximize operational efficiencies by accelerating the time and effort needed for integrating AI into large-scale operations. 

“Hassan and his team deeply understand the global disparity in AI access and the potentially damaging effects of leaving this gap unaddressed,” said Fahad Alidi, managing director and CEO at Wa’ed Ventures. 

He added that aiXplain “has already helped close the AI innovation gap in the MENA (Middle East and North Africa) region, and we see significant potential for the company to localize its solutions in the Kingdom.” 

To accelerate its entry into the Kingdom, aiXplain’s existing subsidiary in Saudi Arabia will function as the company’s MENA region headquarters. 

Beyond the Kingdom, aiXplain works with businesses worldwide to build AI solutions efficiently, as well as fine-tune and benchmark AI models. 

Oman-based climate tech 44.01 secures $37m in series A funding 

Oman-based climate technology startup 44.01 has closed a $37 million series A funding round, led by Equinor Ventures with participation from Shorooq Partners, Air Liquide Venture Capital, Alumni Ventures, and other investors. 

Founded in 2020 by Talal Hassan, Ehab Tasfai, and Karan Khimji, 44.01 specializes in eliminating carbon dioxide by converting it into rock. 

The funding will enable the firm to continue refining its technology, develop commercial-scale projects, and expand its deployment internationally. The company’s tech has been piloted in Oman and the UAE. 

Talal Hasan, founder and CEO of 44.01, said: “We believe mineralization can play a significant role in protecting and repairing our climate. We are grateful to our investors for committing to that mission and for demonstrating their confidence in our technology.” 

He added: “Our investors bring a wealth of international expertise and experience that will help us to accelerate our development and ultimately mineralize CO2 at scale world-wide.”

Sentient Labs raises $85m in seed investment 

UAE-based Web3-focused startup Sentient Labs has raised an $85m through a seed investment round co-led by Pantera Capital and Framework Ventures, with additional funding from Arrington Capital, Canonical, Dao5, and others. 

Founded in January 2024 by Sandeep Nailwal, Pramod Viswanath, and Himanshu Tyagi, Sentient Labs is dedicated to democratizing AI development to ensure its benefits are shared by humanity as a whole. 

Sentient Labs will use the capital to accelerate the development of its open-source AI platform. 

Muller & Phipps acquires Power League Gaming 




Supplied

Regional technology distribution house Muller & Phipps Middle East Group has acquired UAE-based gaming and esports agency Power League Gaming for an undisclosed value. 

The acquisition will see Muller & Phipps invest in scaling Dubai operations and expanding into Saudi Arabia in the fourth quarter of 2024. 

Founded in 2013 by John Lacey, Power League Gaming offers comprehensive solutions for brands entering the gaming sector and publishers engaging audiences through esports events, content creation, and omni-channel ecosystem development. 

Muller & Phipps will acquire all company assets, retaining the management team to lead the business. 

“With Power League Gaming we see market experts who have grown rapidly and who have the talent and drive to take the business and the category itself to the next level across our region. We are excited to launch into Saudi Arabia later this year and to offer local clients the latest and most commercially sound esports and gaming strategies in the field,” group CEO of Muller & Phipps Middle East Group Holdings, Trevor Price, said. 

Tokinvest secures $500k in pre-seed funding 

UAE-based tokenization platform Tokinvest has raised $500,000 in pre-seed funding from a group of investors, including Michael Ourabah, CEO of global infrastructure provider BSO. 

Founded in 2024 by Scott Thiel and Matthew Blom, Tokinvest creates virtual tokens representing rights to assets, connecting real-world asset issuers with global investors through its marketplace. 

The newly acquired funds will be used to enhance Tokinvest’s technological infrastructure, expand its team, and accelerate market penetration. 

“We are immensely grateful for the trust and support from our early investors. This funding fuels our technological and operational development and solidifies our strategy to lead in the real-world asset tokenization space. We are excited about the opportunities that lie ahead and are keenly focused on launching our marketplace later this year,” Thiel, the company’s CEO, said. 

Swyt concludes undisclosed seed round 

UAE-based IT solutions provider Swyt has concluded an undisclosed seed funding round. 

Founded in 2022 by Edouard Bouvet, Swyt offers an all-in-one platform designed to simplify and secure IT operations for businesses. 

The seed funding will support Swyt’s mission to accelerate research and development on their platform and expand its presence throughout the Gulf region. 

Dopay closes $13.5m series A extension round 




Dopay team. Supplied

Egypt-headquartered fintech Dopay has closed a $13.5 million series A extension round, adding to a previous $18 million series A round raised in 2021. The new funding initiative was led by Argentem Creek Partners with participation from existing investors. 

Founded in 2014 by Frans van Eersel and Ahmed Nassef, Dopay offers a virtual banking platform that digitizes cash payments from employers to workers and other beneficiaries. 

The fresh funding will enable Dopay to expand in Egypt, launch new financial services, and extend its multi-bank, multi-country platform to other markets. 

“This funding comes at a pivotal moment, with our growth exhibiting a true hockey stick trajectory. The new funds will help us elevate our platform and, in collaboration with our partner banks, leverage deposited funds to create a self-financing lending model,” Eersel said. 

“This model will allow deposited amounts to fuel a lending portfolio, fostering a sustainable and mutually beneficial financial ecosystem. Our customers can look forward to new financing products that will be seamlessly embedded into our platform, enhancing their overall experience,” he added. 

Majarra acquires NLP technology provider Lableb 

UAE-based Arabic digital content provider Majarra has acquired natural language processing technology provider Lableb for an undisclosed amount. 

Founded in 2004 by Abdulsalam Haykal, Majarra provides Arabic content through its app, offering a vast library of over 50,000 articles, videos, and audio content. 

Lableb, founded in 2017 by Kinda Al-Tarbouch, offers Arabic AI services and NLP. The acquisition aims to solidify Majarra’s position at the forefront of Arabic digital innovation and marks its entry into the rapidly expanding AI sector. 

“Joining Majarra marks an exciting new chapter for Lableb. Our shared vision of advancing Arabic AI and NLP will drive innovation and deliver significant value to online businesses and their customers. Lableb’s tools are robust, ready to deploy, and capable of handling millions of queries weekly,” Al-Tarbouch said. 

Topics: startups Wa’ed Ventures

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Ma’aden, Bahrain’s Alba to form global aluminum powerhouse with new deal

Updated 16 September 2024
Nour El-Shaeri
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Ma’aden, Bahrain’s Alba to form global aluminum powerhouse with new deal

Updated 16 September 2024
Nour El-Shaeri

RIYADH: Saudi Arabian Mining Co., known as Ma’aden, has signed a non-binding agreement with Aluminium Bahrain B.S.C., or Alba, to potentially create a global aluminum producer.

The agreement, dated Sept. 16, outlines plans to merge Ma’aden’s aluminum operations with Alba’s, forming a force in the global aluminum market.

The deal aims to leverage over 75 years of combined operational and financial expertise to enhance their competitive edge on the global stage, according to a press release.

Under the terms of the agreement, Ma’aden will transfer the entire share capital of Ma’aden Aluminum Co. and Ma’aden Bauxite and Alumina Co. to Alba, including the rights to market and sell products from Ma’aden Aluminum Co.

In exchange, Ma’aden will acquire newly issued shares in Alba. The specifics regarding the number of shares and Ma’aden’s ownership stake in Alba will be determined at a later date, as noted in a bourse filing.

This announcement comes on the heels of a deal made just a day earlier, in which US industrial giant Alcoa Corp. agreed to sell its stakes in Ma’aden Aluminum Co. and Ma’aden Bauxite and Alumina Co. to Ma’aden.

In this transaction, Alcoa will receive $150 million in cash and newly issued shares representing approximately 2.21 percent of Ma’aden’s share capital after the deal is completed.

The agreement with Alba also includes the possibility of a cross-listing on the Saudi Stock Exchange, pending further negotiations. The deal is effective immediately and will remain valid until Dec. 31.

It aligns with Ma’aden’s growth and sustainability strategy, aiming to strengthen its presence in Saudi Arabia and the broader Middle East region.

“Harnessing the combined scale and expertise of both businesses to forge a new global champion will not only advance Ma’aden’s ambitions for aluminum but also significantly boost the economic ties between Bahrain and Saudi Arabia,” Ma’aden CEO Bob Wilt said.

“By bringing together two of the region’s most experienced players in the sector, we are setting the stage for stronger economic growth, enhanced job creation, and increased aluminum production capacity. This partnership will elevate our competitive edge on a global scale,” he added.

Echoing Wilt’s sentiments, Alba Chairman Khalid Al-Rumaihi said this partnership will cement the company’s position as the largest regional aluminum producer.

“Our partnership will not only deepen the strong ties between Bahrain and Saudi Arabia but also contribute to Bahrain’s economic diversification and job creation. This is a compelling proposition and an exciting moment for Alba, Ma’aden, and our respective stakeholders, and we look forward to sharing further updates in due course,” Al-Rumaihi said.

The financial impact of the transaction will be assessed following a comprehensive due diligence process.

Completion of the deal is not guaranteed and depends on the satisfactory conclusion of financial, tax, legal, technical, and commercial evaluations, as well as obtaining necessary regulatory and corporate approvals.

Ma’aden has engaged Merrill Lynch Kingdom of Saudi Arabia as its financial adviser and AS&H Clifford Chance as its legal adviser. Alba has appointed Moelis & Co. UK LLP as its financial adviser.

This development comes as Ma’aden reports strong financial performance, with a net profit of SR2 billion ($532 million) for the first half of the year, marking a 160 percent increase compared to the same period in 2023.

Topics: main

Saudi investment licenses for Egyptian firms double in 2024, says minister 

Updated 16 September 2024
Reem Walid
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Saudi investment licenses for Egyptian firms double in 2024, says minister 

Updated 16 September 2024
Reem Walid

RIYADH: Saudi Arabia’s issuance of investment licenses to Egyptian businesses more than doubled in 2024, reflecting a significant boost in economic collaboration between the two nations, according to a senior minister.

At a meeting with Egyptian Prime Minister Mostafa Madbouly, organized by the Federation of Chambers in Riyadh, Saudi Investment Minister Khalid Al-Falih underscored Egypt’s increasing role as a key economic partner for the Kingdom. This follows Saudi Arabia’s exports to Egypt totaling $6.44 billion in 2022, while Egypt’s exports to the Kingdom reached $2.35 billion, as reported by the Observatory of Economic Complexity.

“During 2024, it (investment licenses) grew by more than 100 percent over the previous year, and Egyptian investors created more than 80,000 jobs in the Saudi economy,” the minister said.

He further emphasized the importance of the Egyptian market to the Kingdom, noting its broad involvement in sectors such as tourism, transportation, infrastructure, real estate development, agriculture, energy, and information technology.

“We, in the Kingdom, believe that strengthening cooperation with Egypt will benefit both the Saudi and Egyptian economies, which are, as I mentioned, the nucleus and heart of the Arab economy,” Al-Falih added.

The minister also pointed out that collaboration and integration between the two countries, along with leveraging their competitive advantages, would accelerate regional economic growth. He highlighted the relevance of this cooperation in light of global economic shifts supporting global supply chains, environmental preservation, and emerging sectors like information technology and artificial intelligence.

“The Saudi investor will not only provide Egypt with his investments but will be a partner with international companies that invest with him in the Kingdom and in all countries of the world. We aspire for Egypt to be an extension of investments in the Kingdom, giving us the weight of the large strategic market and the free trade agreements that Egypt enjoys,” he concluded.

During the meeting, Prime Minister Madbouly noted that Saudi Arabia remains the primary destination for Egyptian expatriates. “Our goal is to raise Egyptian exports from $35 billion to $145 billion,” he said.

Madbouly also emphasized Egypt’s efforts to resolve issues faced by Saudi investors, stating that many problems have been addressed, with ongoing work to tackle remaining challenges. He highlighted Egypt’s aim to attract more Saudi investments, especially with new incentives such as the golden license.

Egypt’s Minister of Investment and Foreign Trade, Hassan El-Khatib, who also attended the meeting, stressed the importance of listening to investors. “We know the challenges that the investor faces and find solutions to them,” he stated.

El-Khatib added: “The goal in this field is for me to have a clear investment policy that puts the competitiveness of the Egyptian economy at the heart of this strategy.”

Topics: main

Saudi entertainment authority to provide up to $26.6m in support to SMEs

Updated 16 September 2024
Nour El-Shaeri 
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Saudi entertainment authority to provide up to $26.6m in support to SMEs

  • Initiative aims to enhance and empower the entertainment industry in the Kingdom
  • Program offers coverage of up to 90%, depending on the size of the enterprise
Updated 16 September 2024
Nour El-Shaeri 

RIYADH: Saudi Arabia’s General Entertainment Authority has increased its financial support for small and medium enterprises in the sector to up to SR100 million ($26.6 million), according to an official announcement. 

The initiative, in partnership with the Kafalah financing guarantee program for SMEs, aims to enhance and empower the entertainment industry in the Kingdom, as stated in a post by the GEA on the X platform. 

The program offers coverage of up to 90 percent, depending on the size of the enterprise. 

Initially launched in 2022, the initiative provided financing of up to SR15 million for medium enterprises, SR5 million for small companies, and SR2.5 million for micro-businesses through approved banks and financing firms. Specific details about the new SR100 million support have not yet been disclosed. 

This program is part of a broader effort to support and stimulate investments in the entertainment sector, coordinated by the Ministry of Finance, the General Entertainment Authority, and the Quality of Life Program Center. It aligns with the objectives of Saudi Vision 2030, which is to support and develop the entertainment industry in the Kingdom. 

Vision 2030 aims to transform Saudi Arabia’s entertainment sector by increasing household spending on recreation from 2.9 percent to 6 percent by 2030. 

It seeks to generate over SR120 billion in investments, create 100,000 direct and indirect jobs, and enhance the sector’s contribution to the economy.

Since its inception in July 2022, the undertaking has provided approximately SR70 million in financing and guarantees to entertainment establishments across Saudi Arabia. 

By the end of June 2023, a total of 16 establishments had benefited from the program, with the value of guarantees reaching SR31.3 million, supporting micro, small, and medium-sized enterprises. 

The initiative aims to further develop the entertainment sector by contributing to the growth of beneficiary establishments, helping them evolve into a major entity within the industry. 

It also seeks to provide necessary guarantees for financing and increase funding for businesses in entertainment and related services, including the sector’s supply chain and infrastructure. 

Additionally, the initiative aims to enhance the entertainment sector’s ecosystem and promote sustainability. 

Topics: main General Entertainment Authority small and medium enterprises (SMEs) Saudi Arabia Saudi entertainment Vision 2030

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Saudi Arabia to develop map of iron, steel manufacturers as industry leaders meet in Riyadh

Updated 16 September 2024
MOHAMMED AL-KINANI
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Saudi Arabia to develop map of iron, steel manufacturers as industry leaders meet in Riyadh

  • Kingdom ranked fourth globally in terms of largest producers of reduced iron and 20th in terms of production capacity, said head of Federation of Saudi Chambers
  • Saudi Arabia has 41 factories with a production capacity of 14 million tonnes, employing 15,000 workers
Updated 16 September 2024
MOHAMMED AL-KINANI

JEDDAH: Saudi Arabia aims to create a comprehensive map of iron and steel manufacturers across the Kingdom and the Arab world, as top leaders have gathered in Riyadh to discuss the latest sector developments.

Speaking during the first Saudi International Iron and Steel Conference, Walid bin Hamad Al-Arenan, secretary-general of the Federation of Saudi Chambers, said that the Kingdom’s steel industry is one of the most crucial economic sectors.

The country’s efforts to advance its mineral and mining industry are part of Saudi Arabia’s broader strategy to diversify an economy that has long been dependent on oil. 

The event is especially significant in light of ongoing domestic and global developments shaping the vital sector, a cornerstone of economic growth.

Under the patronage of the Minister of Industry and Mineral Resources, Bandar Alkhorayef, the three-day event began on Sept.16 at the King Faisal International Conference Hall, according to the Saudi Press Agency.

Organized by the Federation of Saudi Chambers through the National Committee for Steel Industry, the event featured a range of local and international industry leaders and experts.

Al-Arenan said that an important objective of the private sector is to increase the gross domestic product from 40 percent to 65 percent, adding: “This is a significant target, reflecting both the role of the private sector and the support provided by the government.”

Presenting data on the industry within the Kingdom, Al-Arenan said: “We have 780 million tonnes of reserves, and we are ranked fourth in the world in terms of the largest producers of reduced iron and 20th in terms of production capacity.” 

He added that the country has 41 factories with a production capacity of 14 million tonnes, employing 15,000 workers.

He further said the steel and iron event will be held quarterly to support the sector.

Bandar Al-Sulaim, chairman of NCSI, said that the forum aims to discuss local and global updates in the steel sector.

He added that the committee represents 70 percent of steel producers in the Kingdom and is working on creating and disseminating a map of steel manufacturers in Saudi Arabia and the greater region, in addition to being a member of global and Arab steel associations. 

Participants voiced concerns over the decline in manufacturing in regions like the EU, where raw steel production dropped to a record low of 126 million tons in 2023. In contrast, India, the second-largest steel producer, and the US have reported positive growth rates.

The Kingdom is ranked 12th worldwide in terms of production capacity for steel billets and slabs. The market size for long and flat steel products is 18 million tons.

Saudi Arabia’s iron and steel industry generated a production value of $5.4 billion in 2023, representing 7.2 percent of the total production in the Middle East and North Africa region, highlighting the nation’s significant role in regional industry and its growing influence in the sector.

This is based on a May 2023 report by London-based market research company Euromonitor International on Saudi Arabia’s basic iron and steel industry, following the International Standard Industrial Classification of All Economic Activities.

The industry’s export share rose to 27 percent of total production output, indicating an increasing focus on international markets. The growth in exports is contributing to the sector’s improved profitability, which stood at 22.9 percent, making it the ninth highest in the region. This indicates that the industry is performing efficiently compared to its regional counterparts.

In terms of market structure, the number of companies decreased to 300, reflecting a trend toward industry concentration. The top five firms alone accounted for 57.1 percent of total production value, demonstrating the dominance of a few large players in the market, according to the analytical report. 

Among them, Saudi Iron and Steel Co. emerged as the largest player, contributing 33 percent of the industry’s total production value.

The Kingdom’s market size for basic iron and steel reached $11.6 billion in 2023, making it the fifth largest in the region. Investments played a crucial role, accounting for 54.4 percent of total demand, driven by infrastructure and industrial projects, which are key growth drivers for the industry.

Topics: Saudi Arabia manufacturing Saudi steel industry main

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Closing Bell: Saudi markets end in red across all indices

Updated 16 September 2024
Nour El-Shaeri
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Closing Bell: Saudi markets end in red across all indices

  • Parallel market, Nomu fell by 36.02 points, or 0.14%, to end the day at 25,733.93
  • MSCI Tadawul 30 Index decreased by 1.94 points, or 0.13%, closing at 1,476.66
Updated 16 September 2024
Nour El-Shaeri

RIYADH: Saudi Arabia’s Tadawul All Share Index closed at 11,867.37 points, down by 32.93 points or 0.28 percent on Monday.

The parallel market Nomu also saw a decline, falling by 36.02 points, or 0.14 percent, to end the day at 25,733.93. The MSCI Tadawul 30 Index decreased by 1.94 points, or 0.13 percent, closing at 1,476.66.

The main index, TASI, recorded a trading volume of SR5.4 billion ($1.44 billion), with 65 stocks advancing and 160 declining. Nomu, in contrast, reported a trading volume of SR32.7 million.

Year-to-date, TASI has dropped 100.02 points or 0.84 percent, while Nomu has gained 1,204.95 points or 4.91 percent. This time last year, TASI was around 11,104 points, and Nomu stood at 22,791.81 points.

Among the top performers on TASI, Al-Baha Investment and Development Co. saw its share price rise by 5.88 percent to SR0.18. Riyadh Cement Co. followed with a 4.48 percent increase, closing at SR26.80.

Rasan Information Technology Co. also made gains, climbing 4.32 percent to SR60.4. Saudi Paper Manufacturing Co. and SEDCO Capital REIT Fund increased by 4 percent and 3.74 percent, respectively, closing at SR67.60 and SR8.05.

Conversely, Saudi Fisheries Co. experienced the largest decline, falling 5.33 percent to SR24. Saudi Arabian Cooperative Insurance Co. and Mediterranean and Gulf Insurance and Reinsurance Co. also faced losses, with shares decreasing to SR17.80 and SR24.80, reflecting declines of 4.61 percent and 4.06 percent, respectively. Al-Babtain Power and Telecommunication Co. and Saudi Reinsurance Co. also reported losses.

On Nomu, Al-Modawat Specialized Medical Co. was the top performer, with its share price surging 11.15 percent to SR14.56. Meyar Co. and Meyar Co. also saw significant gains, closing at SR68 and SR34.80, representing increases of 8.11 percent and 7.41 percent, respectively. Banan Real Estate Co. and Saudi Lime Industries Co. also performed well.

On the downside, Saudi Azm for Communication and Information Technology Co. was the worst performer in Nomu, declining by 4.62 percent to SR21.90. Other underperformers included Qomel Co. for Education and Mohammed Hadi Al Rasheed and Partners Co., with share prices falling by 4.3 percent and 4.28 percent to SR129.20 and SR76, respectively.

Naas Petrol Factory Co. and Al Rashid Industrial Co. also experienced declines, ending the day at SR67.20 and SR34, respectively.

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

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