The Weekly Circuit
👋 Good Monday morning in the Middle East!
Investors are making their way to the United Arab Emirates this week, where the head of Abu Dhabi’s $232 billion Mubadala sovereign wealth fund, Khaldoon Al Mubarak, will be speaking on Thursday at the Investopia x SALT conference. The two-day, invitation-only meeting at the Hilton Abu Dhabi Yas Island resort is a joint production of the UAE government and SkyBridge Capital, the alternative investment firm co-founded by former White House adviser Anthony Scaramucci.
In Israel, the annual conference of the Institute for National Security Studies will bring a mix of cabinet ministers, economists and executives to the Tel Aviv University campus on Wednesday, where the government’s proposed judiciary overhaul will be the center of debate. More than 100,000 protesters filled the streets again on Saturday night, and leaders are promising roadblocks and other acts of civil disobedience on Wednesday when the legislation comes up for a committee vote in the Knesset, Israel’s parliament.
Shlomo Dovrat, co-founder of Israel’s Viola Group, which has $4.5 billion under management, said in a TV interview that “billions of dollars are exiting Israel every day” and that Israeli Prime Minister Netanyahu must “take action quickly” to retain foreign investment. Bessemer Venture Partners recommended that money managers reduce exposure to the shekel because of uncertainty in the Israeli economy caused by the judicial reform package.
Thousands of defense and security companies from around the world that attended the IDEX and NAVDEX exhibitions in Abu Dhabi last week produced $6.4 billion in contracts. The lion’s share involved UAE’s Edge Group, a conglomerate of 25 Emirati defense companies, which signed agreements worth $5 billion. Among the deals unveiled at NAVDEX was an unmanned maritime vessel jointly developed by Israel Aerospace Industries, Abu Dhabi Ship Building and Edge. The marine drone is fitted with sensors, sonar and imaging systems integrated into a remotely operated control system that does not require human intervention.
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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ANDY OF ARABIA
Saudis aim to display cultural change with Warhol exhibition
In a white-cubed gallery space, like one that could be found in New York or London, a multitude of metallic balloons float like pillows in space while joyful visitors come to play with the installation: Andy Warhol’s 1966 work “Silver Clouds.” It would have been a spectacle common in any major world capital with a bustling contemporary art scene had it not been for the fact that the gallery was stationed in the mirror-clad Maraya Concert Hall in AlUla, Saudi Arabia’s ancient desert region, and that this was Warhol’s first show in the kingdom, Rebecca Ann Proctor reports for The Circuit.
Unthinkable scene: The reveling spectators, a mix of international visitors mingling with local Saudi men and women in traditional dress, revealed a fascinating scene — one largely unthinkable prior to around 2016. That was when Crown Prince and Prime Minister Mohammed bin Salman unveiled Vision 2030, his grand reform agenda to wean his country off a reliance on oil through investment in creative entrepreneurship, innovation, tourism and implementing wide sweeping social change. Warhol’s balloons shine with glamor akin to that of the Maraya Concert Hall, which won a Guinness World Record in 2020 as the largest mirrored building in the world; the concert hall is a standout feature of the area, about 700 kilometers (435 miles) north of Jeddah, which until around 2020 was barely visited by either locals or foreigners, as it vies to become a global art hub for art and culture.
Dali & Dylan: The playful balloons are part of the exhibition “FAME: Andy Warhol in AlUla,” which headlined the second edition of the AlUla Arts Festival (Feb. 16-28). The Warhol show, which runs through May 16, offers a unique look at the renowned 21st-century American Pop artist known as a great disruptor for his spirited works that seamlessly appear to defy categorization, freely occupying both artistic, documentary and commercial artistic genres yet belonging to neither. They are on view alongside Warhol’s best-known portraits of Muhammad Ali, Salvador Dali, Bob Dylan, Dolly Parton and Elizabeth Taylor, among others. “I thought it would be quite intoxicating to stage a Warhol exhibition in AlUla due to the combination of extraordinary natural wonders combined with the growth of the contemporary art scene here,” said Patrick Moore, director of The Andy Warhol Museum in Pittsburgh, who curated the exhibition.
Perfect metaphor: Moore said the show was conceived after he was invited to AlUla on a trip in 2021. “There is a certain sameness to everything at times in the art world, and I thought it would be interesting to do something here in this place that is so physically dramatic and beautiful,” he told The Circuit. “I was quite taken with Maraya, which seemed to be the perfect metaphor for Warhol — this giant mirrored building that reflects whatever it is surrounded by.” Inside the Maraya Concert Hall in a series of makeshift white gallery spaces hang 70 iconic works by the artist who is considered to be one, if not the, defining artist of the 21st century. The show looks at Warhol’s legacy through works that focus particularly on his obsession with fame, stardom and celebrity through images of some of the most famous names of the times, coupled with shots of more anonymous personages who also serve as counterculture icons themselves through their rendering by Warhol.
Gay life: Despite the fanfare, political and social tensions around staging the exhibition in Saudi Arabia still permeated the ambiance. Before the show’s opening, Western media pointed out the dissonance in that Warhol was openly gay and Saudi Arabia still carries harsh sentences – including the death penalty – for homosexuality. Yet Moore, like his Saudi counterparts at the Royal Commission for AlUla who staged the show, urged visitors to focus on Warhol as the artist and not on his personal life. The show, Moore said, is not about his sexuality; it is about his fascination with fame and celebrity that so defined his work throughout his life. “Not every exhibition of Warhol needs to focus on the fact that he was a gay artist,” Moore told The Circuit. Instead, the works in the show were carefully tailored to the audience that would view them in AlUla: there are no controversial works in the show. It is meant to be a strong yet concise introduction to Warhol’s most iconic works for a public that perhaps is not as familiar with the artist’s legacy.
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From Cleveland to Jerusalem, tech startup drives auto sales
Aharon Horwitz, an immigrant to Israel from Cleveland, thought he had a terrific startup idea that would give small- and medium-sized businesses the types of data tools used by global operations like Pizza Hut to track customers and build sales, Brian Blum reports for The Circuit. The Jerusalem-based company, dubbed 40Nuggets, had moderate success with clients ranging from Israeli homebuilders to newsletter publishers, but Horwitz ultimately burned through his cash reserves. After a venture capital investor advised Horwitz to pivot back to the U.S. and focus on car dealerships, the business soon took off. Israel was far from his target market.
Raising funds: Rebranding the company as AutoLeadStar with the mission to “upend digital marketing” in the car industry, Horwitz has since raised $57 million and racked up close to 1,000 dealers in cities across the country from Manchester, N.H., to Tacoma, Wash. He has doubled revenue for each of the last three years. “No one wanted to talk to a company overseas,” Horwitz, 43, told The Circuit. “I got on a plane, flew to Cleveland, where I used family connections to get introductions. I essentially started volunteering. It was like I was interning at these car dealerships.” AutoLeadStar is an example of the thousands of Israeli companies with dual identities, which opt to incorporate in the U.S., spreading their sales teams from coast to coast. The company’s R&D core, meanwhile, is concentrated near Horwitz’s home in Jerusalem and filled with software engineers and data scientists.
Competitors ailing: Horwitz’s business is making money and attracting investment at a time that others in the industry are struggling. The online automotive retailer Carvana, for example, saw its valuation plunge 98% in the last 18 months. One of its competitors in the U.S. market, Jerusalem-based Vroom, was trading at $1 a share in recent trading, a far cry from $65 in 2020. AutoLeadStar, on the other hand, managed to raise $40 million as recently as November, at a time when investment has been drying up for startups both in Israel and the U.S., forcing many companies to lay off employees and others to shut down entirely. AutoLeadStar’s most recent funding round was led by Riverwood Capital with investment from PICO Venture Partners, Aleph and Target Global.
Torrents of data: Horwitz never planned to get into the car business – he studied political science at Columbia University – and knew little about it when his key investor, PICO CEO Elie Wurtman, suggested in 2015 that his customer engagement software could fill a gap in the $1.5 trillion auto industry. The systems developed originally by 40Nuggets were able to help smaller car dealers compete with the majors in compiling torrents of customer data, massaging it through artificial intelligence and automation tools, and generating the leads that produce repeat sales – now and years in the future. “It became quickly apparent that what we were developing was exactly what they were looking for,” Horwitz said in an interview at his office in Jerusalem’s Talpiot neighborhood, which is filled with repair shops and auto parts stores alongside higher-end shopping malls. Over time, he said, he “fell in love with the industry and with the potential there.”
Social entrepreneur: When Horwitz moved to Israel in 2006, his passion was social entrepreneurship. He and some friends founded the nonprofit organization PresenTense, which provides education and work opportunities to poor and marginalized populations in Israel. Gradually, Horwitz’s interest shifted to business and the devastating impact that big retailers can have on urban centers. Once Horwitz set his sights on cars, everything he learned before about using customer data fell into place. Crisscrossing North America, his team pitched AutoLeadStar’s software as a one-stop shop for car dealers to integrate their sales records and contact files with business functions such as social media marketing, email campaigns and website optimization. “Aharon’s expertise is infectious,” said Derek DeBoer, general manager of TC Chevy in Ashland, Ore. “It’s hard to leave a meeting with him without being really excited about technology and your business.”
Gulf Shortcut: Oman will open its skies to all airlines, joining a policy announced by Saudi Arabia last year, and enabling Israeli carriers to cut flight times and costs on routes to India and other Asian destinations.
Desert Tracks: Oman Etihad Rail Co. signed an agreement with Mubadala Investment Co. to start building a $3 billion train route that will connect Oman and the UAE.
Cyber Center: China’s consumer electronics maker Lenovo said it will establish a cybersecurity research center with Ben-Gurion University of the Negev in Beersheva.
Cloudy Ahead: China’s Alibaba Cloud started service to Israeli businesses through Israel’s Sela Co., which also provides cloud services for Microsoft, Google and Amazon.
Baghdad-Bound: UAE-based Air Arabia will start direct flights from Abu Dhabi to Iraq’s Baghdad and Erbil airports, starting June 22.
Fill ’er Up: The Dubai Electricity and Water Authority will team up with the Emirates National Oil Company to develop filling stations for vehicles that use hydrogen fuel.
Rising Sun: Baynouna Solar Energy Co., a joint Emirati-Finnish venture, has started operating Jordan’s largest sustainable energy project with a total capacity of 200 megawatts.
Port Bid: The Abu Dhabi Investment Authority may bid for a 34% stake in Associated British Ports, the U.K.’s biggest port operator.
Chips Ahoy: Israeli semiconductor maker Chain Reaction raised $70 million in a funding round led by Morgan Creek Digital with participation from Hanaco and JVP.
Financing Chaos: Israel’s Chaos Labs, which develops technology for securing crypto transactions, raised $20 million in a funding round led by Galaxy and PayPal Ventures.
Data Fortress: Israel’s Techtonic, which builds secure data centers, said it will open a $55 million underground facility that will be able to withstand a direct missile hit.
Network Gatekeeper: Israeli’s Entitle, which guards access to a company’s computer network, raised $20 million in a seed financing round led by Glilot Capital Partners.
On the Circuit
Sultan Al Jaber, managing director of Abu Dhabi National Oil Co., was endorsed as president of the next United Nations climate summit in a Bloomberg editorial that said environmental critics should recognize his value as an ally and “give him a chance.”
U.S. Senate Majority Leader Charles Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) visited Israel last week, holding meetings with Prime Minister Benjamin Netanyahu and President Isaac Herzog.
Riad Salameh, governor of Lebanon’s Central Bank, has been charged with embezzling public funds, forgery, illicit enrichment and money laundering.
Ahead on the Circuit
March 1, Tel Aviv, Israel: INSS Annual Conference. Top Israeli government officials, corporate executives, researchers discuss regional political and financial landscape. MUZA – Eretz Israel Museum.
March 2-3, Abu Dhabi, UAE: Investopia x SALT conference. Investor conference sponsored by SkyBridge Capital and the UAE government. Hilton Abu Dhabi Yas Island.
March 7-10, Abu Dhabi, UAE: Forbes 30/50 Summit. Women’s business conference featuring Hillary Rodham Clinton, Gloria Steinem, Nobel Peace Prize Winner Malala Yousafzai. Louvre Abu Dhabi and other locations.
March 7-8, Dubai, UAE: Women’s Empowerment Convention. More than 2,000 expected for conference connecting female leaders across the world. Dubai Opera and Armani Hotel.
March 7-10, Dubai, UAE: Crypto Expo Dubai 2023. Investors, executives speak on opportunities and challenges facing cryptocurrency industry. Festival Arena.
March 20-21, Dubai, UAE: World Blockchain Summit. Technology leaders, executives, investors meet to discuss latest trends in blockchain industry. Atlantis The Palm Dubai.
Closed Books: Some of Israel’s best-known authors, including David Grossman, Yaara Shehori and Haim Be’er, signed a petition with some 300 other writers to stop Prime Minister Benjamin Netayahu’s government from consolidating control over the country’s National Library. Netanyahu’s cabinet voted its preliminary approval last week for the move that would give the education minister authority over appointments to the library’s board. The Hebrew University in Jerusalem, which transferred ownership of the library to the government in 2008 on condition that it would remain independent, said it would take back its materials if the measure isn’t withdrawn.
Speed Hump: The winner of the world’s richest camel race, which takes place in Saudi Arabia next month, will bring home a grand prize of more than $21 million. The four-day AlUla Camel Cup starts March 14, with Saudi Crown Prince Mohammed bin Salman as official patron. The kingdom is also home to the world’s richest horse race, the Saudi Cup, which has a total prize pool of about $35 million. Japanese longshot Panthalassa won the $20 million top prize on Saturday.