The Weekly Circuit
👋 Good Monday morning in the Middle East!
Israelis cast their ballots tomorrow for the fifth time in four years as polls indicate that the government’s political stalemate is not likely to end anytime soon. Former Prime Minister Benjamin Netanyahu’s Likud party is expected to win the most seats in the Knesset, Israel’s 120-member parliament. But to regain the premiership, Netanyahu will have to cobble together a governing coalition with allied right-wing parties. The latest polling indicates that even with those allies, Netanyahu may fall just short of the requisite 61 seats to hold the majority. Yair Lapid, the acting prime minister who heads the Yesh Atid party, will try to repeat his feat from the last election in which parties from both right and left united to topple Netanyahu, who was Israel’s longest-serving premier.
Two days before the election, Lapid sought to remind Israelis of the economic benefits they stand to receive from last week’s maritime border agreement with Lebanon that allocated natural gas fields in the Mediterranean Sea to both countries. On Sunday, Lapid visited the floating gas rig off Israel’s northern coast that is operated by London-based Energean. “Producing gas from the Karish field will lower energy costs in Israel, will turn Israel into a regional energy supplier, and will help Europe deal with the energy crisis,” Lapid said.
Israel’s developing ties with Saudi Arabia were on display last week at the Future Investment Initiative, the annual economic conference known as “Davos in the Desert.” As The Circuit’s Jonathan Ferziger reports from Riyadh, Samer Haj-Yehia, the chairman of Bank Leumi, Israel’s biggest lender, was invited to appear onstage at the event even though the two countries don’t have diplomatic relations. He said the Saudi kingdom represents great potential for the region and he would “love” to tap into it. Also attending the three-day event were Jonathan Medved, founder of the Jerusalem-based venture capital platform OurCrowd; Jared Kushner, the former White House advisor who founded a Saudi-backed private equity fund; and Asher Bennett, CEO of an electric-truck manufacturer and brother of Naftali Bennett, the former Israeli prime minister.
Welcome to The Weekly Circuit, where we cover the Middle East through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please send comments and story tips to [email protected].
Spread the word! Invite your friends to sign up.👇
Israelis take the stage as Saudi economic summit wraps up
The glittering economic summit held in the Saudi capital last week turned into a modest coming-out party for Israeli business leaders who raised the prospect of making investments in the kingdom, The Circuit reports. Interactions between Israelis and Saudis took place throughout the King Abdulaziz Convention Center and adjoining Ritz Carlton, a temple of luxury that is among the most expensive hotels in Riyadh. Under the building’s massive crystal chandeliers, dozens of Israelis from a variety of startups and investment funds could be seen sipping coffee, nibbling on chocolate-covered figs and talking about possible deals with Arab counterparts.
Catching up: “The potential for the region is just huge,” Jonathan Medved, founder and CEO of the Jerusalem-based venture capital platform OurCrowd, told The Circuit before appearing onstage for an Oct. 27 panel on investing in technology startups. “The politics will catch up.” Israeli companies are increasingly being allowed to operate in the Saudi kingdom despite the fact that it has not established diplomatic relations with the Jewish state, as the United Arab Emirates, Bahrain, Morocco and Sudan did in 2020 with the normalization agreements known as the Abraham Accords.
Leumi chief: Medved wasn’t the only Israeli making a public appearance at the three-day Future Investment Initiative conference, better known by its nickname as “Davos in the Desert.” Samer Haj-Yehia, chairman of Tel Aviv-based Bank Leumi, the country’s largest lender, spoke earlier in the day at a keynote finance panel. “We can see that there is a lot of investment going on,” said the 53-year-old economist, an Arab citizen of Israel. “We want to tap into that kind of investment, whether it is on the payment side, whether it is on the cryptocurrency side, anything we can leverage from the micro-services and the cloud, we would love to do that.”
No comment: While Haj-Yehia shared the stage with senior executives from such leading world lenders as Saudi Exim Bank, Société Générale, Wells Fargo and Rothschild & Co., it was the political significance of his presence as a prominent Israeli in Saudi Arabia that commanded attention. Surrounded by reporters after addressing attendees, the Leumi chairman refused to answer questions and elaborate on his invitation to address the conference, which is sponsored by Saudi Arabia’s $620 billion sovereign wealth fund.
Read the full story here.
Israeli entrepreneur looks to sell electric trucks in Saudi Arabia
It sounds counterintuitive, even like the start of a gag: An Israeli tech entrepreneur comes to an Arab desert kingdom that is the largest oil producer in the Middle East, and whose entire economy runs on crude, and he’s hawking zero-emission e-trucks. But Asher Bennett, the brother of former Israeli Prime Minister Naftali Bennett and the founder of the London-based e-truck maker Tevva Motors, may be looking down the road clear-eyed and he may just have the right vehicle, and the right technology, at the right time. Even Saudi Arabia is setting new environmental standards to reduce reliance on fossil fuels.
Submarine officer: “There’s a lot of interest in the Gulf for our technologies, so I’m here from time to time,” Bennett told The Circuit on the second day of the Future Investment Initiative conference. Bennett, 53, said he developed an interest in e-vehicles through his service as a naval officer on an Israeli submarine, which was propelled by batteries attached to a large electric motor. Unlike other successful Israeli companies such as Mobileye, the maker of sophisticated navigation systems and software for self-driving cars that was bought by Intel for $15 billion, Tevva builds vehicles, he said. “I’m the Israeli tech entrepreneur who figured out the one business step that we’re not good at in Israel and that’s automotive, the hardware side,” he said. “We don’t build cars in Israel, we don’t teach the engineering side in Israel, so I moved to the U.K.”
UPS fleet: Tevva, which developed a dual-motor system that includes a hydrogen fuel cell to extend the vehicle’s range, produced a small fleet of trucks for the UPS package delivery service in London. “The average car drives one to two hours a day where the average truck goes out for eight, nine or 10 hours a day,” Bennett said. “Batteries alone don’t do it, so we mix batteries with hydrogen fuel cells. We can go much farther but also make it more economical.”
Gulf investors: Tevva, which means nature in Hebrew, has raised more than $90 million in investment, including a $57 million funding round that closed in November 2021. Bennett declined to disclose the total amount. He said investors come from Europe, the U.S., India and the Gulf.
Read the full story here.
New Office: Third Point Ventures, an investment arm of U.S. billionaire Dan Loeb that has made investments in six Israeli startups since 2015, opened an office in Tel Aviv.
We Fly: The Dubai International Airport is opening a co-working space with the capacity to host nearly 400 people every day and will provide office services for travelers between flights.
Greening Up: Saudi Aramco will invest $1.5 billion in a fund to support transition from fossil fuels to sustainable energy sources, including research on carbon capture, greenhouse gas emissions, energy efficiency and synthetic fuels.
Gulf Jump: Israeli paratroopers jumped out of a plane flying over Bahrain and clasped hands in the air with counterparts from the Gulf kingdom, the UAE and the U.S. to mark the second anniversary of the Abraham Accords.
Back Together: Qatar’s BeIN Media Group, a sports broadcaster previously banned in Saudi Arabia, signed a strategic partnership with Saudi Media Co. a month before the World Cup soccer tournament in Doha.
Blockchain Trading: The Tel Aviv Stock Exchange will overhaul its ownership structure and create a blockchain platform to allow more trading of cryptocurrencies that complies with international standards.
Mobileye Soars: Mobileye Global, the maker of autonomous car technology owned by Intel, became the largest Israeli company on Wall Street when it rose 38% on its first day of Nasdaq trading last week and reached a market value of $23 billion.
Kushner Classifieds: Jared Kushner’s Affinity Partners led a $200 million funding round in Dubai-based Emerging Markets Property Group, whose interests include classified advertising websites in the Middle East and Asia.
Digital Nomads: Shares of Selina Hospitality, a company founded by Israelis that finds rooms and office space for travelers around the world, rose more than 400% on its first day of Nasdaq trading.
No Friction: Israel’s Trigo, which develops systems for retail stores that allow customers to bypass the checkout counter, raised $100 million in a financing round led by Singapore’s Temasek Holdings.
Crypto Payments: BitOasis, a cryptocurrency exchange based in the United Arab Emirates, signed an agreement with Mastercard to launch payment cards linked to cryptocurrencies.
Medical Data: Israel’s Navina, which uses artificial intelligence to sort through medical data and give doctors a clearer view of patients’ health record, raised $22 million in a funding round led by ALIVE Israel HealthTech Fund.
Printing Pink Slips: HP is consolidating its Scitex and Indigo printing units in Israel, which will result in layoffs of about 60 employees.
On the Circuit
Bella Hadid and fellow supermodels Naomi Campbell and Poppy Delevingne attended the Fashion Trust Arabia Prize ceremony in Qatar’s capital city of Doha last week amid controversy over the country’s human rights record as it prepares to host soccer’s World Cup.
Shai Babad was appointed CEO of Israeli food company Strauss Group after serving as director-general of the Israeli Finance Ministry. He replaces Giora Bardea at the company’s helm.
Dan Propper stepped down after 17 years as chairman of Osem, an Israeli food manufacturer owned by Nestle. Prior to serving as chair, he led the company as CEO for 25 years.
Ahead on the Circuit
Oct. 31-Nov. 2, Cramim, Israel: Future of Health Summit, Doctors, hospitals, international health organizations discuss challenges facing the medical system. Cramim Spa Hotel.
Oct. 31-Nov. 3, Abu Dhabi, UAE: ADIPEC 2022: Energy conference brings together industry executives and international policy makers. Abu Dhabi National Exhibition Centre.
Nov. 6-18, Sharm el-Sheikh, Egypt: United Nations Climate Change Conference (COP 27). Heads of state from 90 countries expected at event to chart global efforts at protecting the environment. Sharm el-Sheikh International Convention Centre.
Nov. 9-10, Bahrain: Bahrain International Air Show. Exhibition with 140 companies expected from aviation, defense, space and logistics industries. Sakhir Air Base.
Nov. 17-18, Abu Dhabi, UAE: The Milken Institute Middle East and Africa Summit. Experts gather to ponder the future of the region in the realms of business and geopolitics. Rosewood Hotel.
Film Flare-Up: Controversy surrounds director Meg Smaker’s film “Jihad Rehab,” which focuses on four Yemeni citizens and one Saudi who were arrested on terrorism charges in the U.S. and later released from the Guantanamo detention facility to enter a rehabilitation program in Saudi Arabia. There, the men take classes, play Ping-Pong, paint pictures and undergo counseling sessions to prove they can be safely released. The film’s screening at the annual Sundance Festival triggered charges of cultural insensitivity. The film has since been rejected by distributors and film festivals, while being repudiated by its most prominent financier, Abigail Disney.
Saudi-Israel Sports: Triathlete Shachar Sagiv became the first Israeli athlete to compete in Saudi Arabia. Entering the Super League Triathlon on Saturday, Sagiv was eliminated during the NEOM leg of the race when he fell off his bicycle. In another face-off between the two countries, Saudi Arabia’s Yara Al-Hogbani, the kingdom’s first female professional tennis player, beat Israel’s Isabell Bilaus in the semifinals of the J5 Isa Town Tournament in Bahrain.