The Weekly Circuit
👋 Good Monday morning in the Middle East!
Israeli business leaders are appealing to Prime Minister Benjamin Netanyahu to call off proposed changes in the judicial system that they believe will harm the economy. Amid weekly protests that have brought more than 100,000 demonstrators into the streets of Tel Aviv, bankers, investors and tech executives were invited to meet with the prime minister last week to discuss the controversy. Netanyahu, who faces corruption charges in an ongoing trial, said their concerns were overwrought, but he’s willing to engage in dialogue. The Tel Aviv Stock Exchange’s index of the country’s largest banks dropped 4.3% on Sunday.
As talk of capital flight emerged, Papaya Global CEO Eynat Guez announced that her Israeli payroll management company would pull its money out of the country, asserting that the proposed judicial reforms will “harm democracy and the economy.” Her opposition was buttressed by a letter sent to the prime minister by hundreds of Israeli economists, including Nobel laureate Daniel Kahneman; Eugene Kandel, who in 2009 was appointed by Netanyahu to head the National Economic Council and is now chairman of Start-Up Nation Central; and former Finance Ministry Director-General Avi Ben-Bassat. “The damage to the independence of the judiciary will greatly increase the likelihood of damage to the credit rating of the Israeli government and the capital-raising of Israeli companies,” the letter said. A member of the Bank of Israel’s interest rate-setting monetary committee, Moshe Hazan, resigned to work with the protest movement against the reforms.
Responding to the growing opposition, Netanyahu said that his plan for the courts, which would bolster political control over judicial appointments and weaken the Supreme Court’s ability to overturn legislation, would be good for the economy. When the judicial reform passes, he said, “I am convinced that everyone will see that rule of law is intact and has even been strengthened.”
A few business leaders defended Netanyahu, including Eyal Ben Simon, CEO of Phoenix Insurance Holdings, which is the subject of an offering by Abu Dhabi’s ADQ sovereign wealth fund to buy control of Israel’s biggest insurer. “There is high interest from investors in the Israeli economy in general and in the Phoenix and its subsidiaries in particular,” he said in an interview with Globes. “Not only have I not seen a decline in interest but even an increase…. Nobody is talking to me about the judicial reform and I haven’t heard anybody talking about cutting the rating or harming the position of Israel.”
Elsewhere in the region, The Qatar Investment Authority raised its stake in Credit Suisse to 6.9% to become the Zurich-based lender’s second largest shareholder, Saudi Aramco’s Wa’ed Ventures investment unit waded into Asia to lead a $14 million fundraising round for Japan’s Terra Drone, and top executives left the Saudi-backed LIV Golf tournament, which is in increasing disarray after trying to challenge the PGA tour for top talent. Details below.
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].
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Freightos’ $80 million IPO funds shipping platform’s expansion
Freightos, an online platform for shipping goods around the world, will use some $80 million raised in a Wall Street public offering to upgrade its booking technology and expand operations globally, particularly in Asia, founder and CEO Zvi Schreiber told The Circuit’s Jonathan Ferziger. The Jerusalem-based company sold shares for the first time on Thursday through a merger with Gesher, a special purpose acquisition company, or SPAC, which enabled Freightos’ listing on the Nasdaq exchange. The new stock, bearing the ticker symbol CRGO, rose as high as $30 a share in early trading before closing at $10.49. It dropped 22% on Friday to $8.20.
Expedia for cargo: “It’s all about expanding the product and expanding the customer footprint,” Schreiber, 53, said in an interview from New York, where he rang Nasdaq’s opening bell surrounded by cheering Freightos executives. “We’re already in a fast-growth trajectory, which is great, and we want to carry that on.” Founded in 2012, Freightos disrupted the international shipping industry by allowing businesses to shop online for the best prices to move goods by sea and air – similar to comparing flight and hotel costs on sites like Expedia and Booking[dot]com. Sales revenue boomed last year as Freightos benefited from high cargo prices amid world shipping delays. Prices have since declined.
Suez blocked: “People were sort of lazy when supply chains were all running smoothly,” said the London-born Schreiber, who lives in Israel. “Now it’s clear that because of [factors such as] the pandemic, increasingly erratic weather, labor disputes, things are changing all the time. That just underlines the need to have a booking platform that is digital.” Freightos also brought a wealth of data analytics to the freight industry, introducing real-time information on pricing, vessel location and available cargo space that were historically held tightly by shipping lines. “Now when a port goes down, you just go to a website and find the alternative,” Schreiber said. “ If the Suez Canal is blocked, you can go to the website and find the ship that would sail through the Pacific route.”
Qatar on board: Of the $80 million raised in the IPO, $10 million came from Qatar Airways, the world’s largest air cargo carrier, and $60 million from M&G Investments and Prudential Assurance Co., both based in London, according to a Freightos statement. Shareholders include the Israeli venture capital firms Aleph, OurCrowd and Sadara; Singapore’s SGX Group; FedEx Logistics; and Bob Mylod, chairman of Booking Holdings, which owns Booking.com and Priceline.com. While Freightos is registered in the Cayman Islands, Schreiber said its Israeli roots have not presented a barrier to its close connections with Qatar Airways, whose chief cargo officer, Guillaume Halleux, sits on the company’s board. Qatar has no official diplomatic relations with Israel and declined to join the 2020 Abraham Accords in which its Gulf neighbors, the United Arab Emirates and Bahrain, normalized ties with Israel.
Leaning in: “We’re pragmatic and they’re pragmatic,” Schreiber said of the Qatari airline. “It’s just doing what makes sense from a business perspective.” Freightos also does significant business with the Dubai-based carrier, Emirates. The new funds will help Freightos grow and extend the company’s influence in a variety of ways, said Michael Eisenberg, co-founder of Aleph, which co-led the first investment round in Freightos a decade ago. “The infusion of capital allows Freightos to lean in when so many other companies are leaning back,” Eisenberg told The Circuit. “Going public also brings brand recognition and credibility, which opens doors with enterprises, shippers and airlines and ocean carriers.”
Mamilla Hotel, where luxury meets history in Jerusalem
It’s already a well-established landmark in modern-day Jerusalem, but the backstory of Mamilla, the swank outdoor shopping mall that leads from the Old City to the new, is perhaps best captured, and preserved, within the luxury boutique-style hotel that bookmarks the avenue’s western flank, Ruth Marks Eglash reports for The Circuit. Opened more than a decade ago, the Mamilla Hotel is a rare journey into the history of a once-embattled Jerusalem neighborhood, a no-man’s land and a slum, that stood on the unstable seam line between the eastern and western sides of the city, between the watchful eyes of Israeli and Jordanian soldiers from 1948 to 1967.
Enjoying life: “We have four values in this hotel,” marketing manager Maia Wiener said; “Location, luxury, holistic and joie de vivre, or a cheerful enjoyment of life… guests get to feel Jerusalem in all of these ways.” One of the first neighborhoods built outside the walls of the Old City, Mamilla sits on what was the main road leading from the bustling port of Jaffa to what is called in English (and Hebrew) the Jaffa Gate. While its foundations date back some 2,000 years, during the 19th century as the Old City’s population expanded, Mamilla served as a busy commercial district with shops, banks and even a guesthouse where the founder of modern Zionism, Theodore Herzl, is said to have stayed on his visits to the city.
Novel twist: The outdoor mall, with its high-end stores and upscale restaurants, was developed by the Alrov Group and opened for business in 2007. The Mamilla Hotel, a cluster of older buildings with a new and modern façade, opened three years later at the far end. Both were designed by renowned Israeli architect Moshe Safdie, who oversaw the renovation of the handful of remaining 18th-century buildings. The interior was designed by Italian architect Pierro Lissoni, who is known for his fun contemporary works, a feature that is incorporated into the 194 modern-style guest rooms. High-tech features such as glass-walled bathrooms that turn opaque at the flick of a switch give the rooms a unique and novel twist.
Old & new: Lissoni’s mixing of the old and the new is evident throughout the rest of the hotel, too. Part of the building’s original structure from the 1800s remains in the lobby, golden Jerusalem stones provide a warm touch to the business lounge on the first floor, and the wine cellar on the second. On the lower floors sit an indoor pool, a conference room and a huge dining room serving a rich Israeli-style breakfast buffet. A few floors above, adjacent to the outdoor mall, across a narrow footbridge, is the hotel’s Akasha spa and opposite is a fish restaurant cheesily called “Happy Fish.”
Breathtaking views: Probably the finest gem in this hotel, however, is at the top: the Rooftop restaurant. With breathtaking views of the ancient Old City walls, the elegant dining room provides an adventure in kosher cuisine and Israeli wines.Dishes ranging from sashimi salmon to goose breast to lamb chops and char-grilled entrecôte have been reimagined with a fresh and modern twist that gives diners both a historic and luxurious experience, just like the hotel itself.
Goodbye BBC: The British Broadcasting Corp. discontinued its Arabic-language radio service after 85 years. The BBC will continue to host Arabic programs on its website.
Desert Rainmakers: The UAE doubled the use of cloud-seeding flights over the past six years and is looking for other ways to generate rainfall in the desert nation.
Neom Dreams: London-based Yotel will open one of its stylish, compact hotels in Saudi Arabia’s Neom development with contactless check-in and a robot concierge.
Digital Clues: Israel’s Cellebrite signed a five-year agreement worth some $14 million to let Singapore’s national police agency use its product for collecting digital evidence.
Jobless in Gulf: The UAE has instituted an unemployment benefits program aimed at enabling Emirati and expatriate employees to subsist between jobs.
Gaming Bank: Saudi National Bank signed a deal with Mastercard and the Saudi Esports Federation to help develop the kingdom’s gaming and esports infrastructure.
Swiss Stake: The Qatar Investment Authority raised its stake in Credit Suisse to 6.9%, becoming the bank’s second largest shareholder after Saudi National Bank.
Raising Funds: Israel’s PayEm spending and procurement management platform raised $20 million in a funding round joined by Viola Credit and Mitsubishi Financial Group.
Tokyo Calling: Saudi Aramco’s Wa’ed Ventures investment unit led a $14 million fundraising round for Japan’s Terra Drone, its first foray into Asia.
Artificial Learning: McKinsey consulting acquired Tel Aviv-based AI and machine learning startup Iguazio, its first acquisition in Israel, for an estimated $50 million.
Cloudy Picture: Dell Technologies, the Austin, Texas-based computer maker, acquired Israel’s Cloudify, which enables applications to run across multiple data centers, for an estimated $100 million.
Open Arms: Israel’s OpenWeb media engagement platform, which counts The New York Times among its customers, bought its Israeli rival Jeeng for $100 million.
On the Circuit
Gautam Adani, the Indian billionaire and richest person in Asia, will visit Israel this week for a ceremony to assume ownership of Haifa Port, which his investor group bought for $1.2 billion last year from the Israeli government.
Wassim Al-Khatib was hired by Lazard as CEO for the investment firm’s business in the MENA region, which will be headquartered in Riyadh, Saudi Arabia. Al-Khatib was previously head of Citigroup’s Saudi operations.
Mark Kelly, the Democratic senator from Arizona and former astronaut, returned from a Middle East congressional tour and told Jewish Insider that leaders he met in Bahrain and the UAE are hopeful other countries will normalize ties with Israel.
Nadhim Zawahi, the Baghdad-born chair of the U.K.’s Conservative party, faces a tax investigation ahead of the upcoming publication of his memoirs.
Majed Al Sarour left his job as managing director of the Saudi-backed LIV Golf tournament, the Wall Street Journal reported. Kerry Taylor, LIV’s chief marketing officer, and Jonathan Grella, the chief communications officer, are also leaving.
Ahead on the Circuit
Jan. 31-Feb. 1, Tel Aviv, Israel: Ilan Ramon International Space Conference. Event draws space agency administrators from the U.S., UAE and around the world. David Intercontinental Hotel.
Feb. 1-3, Tel Aviv, Israel: DLD Tel Aviv 2023 and Innovation Summit. Annual international gathering of tech startups, investors. Expo Tel Aviv.
Feb. 12-14, Dubai, UAE. Jewelry, Gem & Technology Dubai Conference. Annual meeting of the jewelry industry. Dubai World Trade Centre.
Feb. 14, Beersheva, Israel: Israel Climate Change Conference. Gathering of environmentalists, researchers, business executives and government officials. Ben- Gurion University campus.
Feb. 15, Jerusalem, Israel. OurCrowd Global Investor Summit. Thousands of investors and startup executives from around the world are expected at the annual conference. Jerusalem International Convention Center.
Feb. 20-24, Dubai, UAE. Gulfood Exhibition. More than 4,000 companies from 120 countries attend the world’s largest food and beverage industry conference. Dubai World Trade Centre.
Dubai Golf Tournament Soaked: Heavy rain forced the Dubai Desert Classic golf tournament to add an extra day for the first time in its 34-year history. The unusually strong downpours led to flooding around the Majlis golf course and made it impossible to wrap up the 72-hole event by its traditional Sunday conclusion. It ends today.
‘Fauda’ a Hit in Lebanon: Israeli TV series “Fauda,” which portrays an Israel commando group operating against Palestinian forces, is building an audience in the Arab world. The season premiere last week was Netflix’s most streamed show in Lebanon and was among the top 10 in the UAE, Jordan, Qatar and Morocco.
Hail to the Chef: Taste of Dubai, the city’s annual open-air food festival, returns this week after a two-year absence owing to the pandemic. The three-day festival, which opens Friday, will feature 15 top restaurants offering their signature dishes at discount prices and a bevy of celebrity chefs teaching master classes on their cooking techniques.
Gilded Mummy: Archaeologists excavating in Cairo’s Saqqara necropolis discovered a mummy that was wrapped in gold leaf and sealed in a limestone sarcophagus 4,300 years ago. Many of the country’s most notable artifacts will soon be on display at the new Grand Egyptian Museum near the pyramids in Giza, which is scheduled to open in 2023 after five years of delays.
Dubai Torah: A private museum in the UAE has put a Torah scroll on display that survived the Holocaust. Ahmed Obaid Al Mansoori, founder of the Crossroads of Civilizations Museum in Dubai unveiled the scroll last week to mark International Holocaust Remembrance Day. He said it will help combat Holocaust denial in the Middle East. The scroll is on permanent loan to the museum from the Memorial Scrolls Trust, which looks after more than 1,000 Czech scrolls saved from the Holocaust and later sent to London.