The Daily Circuit
👋 Hello from the Middle East!
Today in The Daily Circuit, we’re looking at the IMF’s uncertain MENA forecast, Saks Fifth Avenue’s parent company in talks to enter Saudi Arabia, new Gulf mining deals and Mubadala’s backing for a weight-loss drug. But first, the power player casting a big shadow on Saudi Arabia’s VC investment landscape.
Saudi Venture Capital Co. is emerging as the driving force behind Saudi Arabia’s meteoric rise in VC investing. For the first time, the kingdom clinched the top spot last year as the investor with the most funds raised in the MENA region, a sudden challenger to more mature ecosystems in the UAE and Egypt. VC capital pouring into Saudi startups has surged over 20x between 2018 – the year SVC was formed with backing from the National Development Fund – and 2023, as more deals have been done and check sizes have grown.
A new report from SVC shows it has invested in 40 funds that have in turn invested in over 700 startups and SMEs so far. Total committed investments have reached over $700 million since its inception and total investments including partners are estimated at $3.6 billion. “This is only the beginning,” Dr. Nabeel Koshak, the firm’s CEO, said in the report. Crown Prince Mohammed bin Salman sees startups and entrepreneurship as linchpins of his economic diversification drive under the banner of Vision 2030.
SVC is on the rise amid a global slowdown in private capital investing. “Q1 was in no way ecstatic,” Philip Bahoshy, CEO of funding data platform Magnitt, said this week. “Though there were a few big wins, our latest numbers report a decline in almost every metric.” Bahoshy will host a public meeting next week with Sharif El-Badawi, CEO of the Dubai Future District Fund, to discuss the state of venture capital in the region and what may lie ahead for the rest of the year.
📰 Developing Stories
DIMMING OUTLOOK
OPEC production cuts and regional conflicts led the IMF to cut its 2024 growth forecast for the Middle East and North Africa. In a report published on Thursday during the international lender’s spring meeting in Washington, the IMF said MENA economies will probably grow 2.7% this year, a revision of its 3.4% forecast last October. That would still be an improvement from 2023 when the region registered 1.9% growth. The IMF attributed the downward revision to conflict in Sudan, as well as Gaza and the West Bank. It also cited the OPEC+ agreement last year to extend voluntary output cuts of 2.2 million barrels per day until the end of June, which has kept oil prices high. “The voluntary oil production cuts – most notably by Saudi Arabia – are expected to continue to put a temporary damper on growth this year,” the report said. If the regional conflicts subside, the IMF said it expects a recovery in 2025, issuing an early growth forecast of
4.2%
INVESTORS WANTED
As Saudi Arabia has indicated that the timetable for its NEOM megaproject may have been too ambitious, the kingdom is prospecting for outside investment to build the $63 billion luxury shopping and residential development going up in Riyadh’s historic Diriyah district. HBC, the parent company of Saks Fifth Avenue, is among the international retailers in talks to help develop Diriyah Square, Axios reports. Mohamed Saad, President of project leader Diriyah Co. told the news agency he was “delighted with the response” from companies attending its colorful presentation this week at the World Retail Congress in Paris. “We anticipate securing a wide-ranging mix of retail partners and investors,” Saad said. The project, backed by Saudi Arabia’s Public Investment Fund, is designed to include more than 400 retail outlets and 100 restaurants and cafés in a complex featuring 300-year-old motifs in Arabian architecture.
💲 Sovereign Circuit
International Holding Co.: The mining investment arm of Abu Dhabi’s most valuable company has made an offer of more than $1 billion to buy a 51% stake in Vedanta Resources’ Zambian copper assets, Reuters reports.
Mubadala: Mubadala Capital has participated in a $290 million fundraise in weight-loss drug developer Metsera, a round led by biotech investor ARCH Venture Partners and with participation from SoftBank.
Public Investment Fund: David Phillipps was named chief financial officer of the PIF-backed LIV Golf tournament, reporting to CEO and Commissioner Greg Norman. Meanwhile, PIF-backed Manara Minerals Investment Co. is nearing a deal to acquire a minority stake in a Pakistan mine controlled by Barrick Gold Corp., Bloomberg reports. The firm plans to invest at least $1 billion in the Reko Diq copper and gold mining project, sources told the news agency.
↪↩ Closing Circuit
⚡ Energy Fund: Chevron’s venture capital arm has launched its third fund to invest in renewable energy technologies with a $500 million commitment, Reuters reports.
⛽ Gasoline Bonds: Abu Dhabi National Oil Co. will pay out almost $1.2 billion to bondholders of Adnoc Distribution, the energy giant’s network of service stations in the UAE.
⚙️ Digital Casting: Magnus Metal, an Israeli startup that develops digital casting technology for metal alloys, raised $74 million in a funding round led by Entrée Capital and Target Global.
☁️ Standing Guard: Wiz, an Israeli cloud security company, is in advanced talks to buy U.S. cloud security company Lacework for between $150 million to $200 million, Calcalist reports.
🪙 New Frontiers: Singapore-based cryptocurrency trading firm QCP and the UAE’s Further Ventures announced a partnership in Dubai on Wednesday to expand into the Middle East by offering new digital-asset financial and derivatives product offerings.
🗣 Circuit Chatter
🛫 First Class: Doha’s Hamad International Airport was ranked the world’s best airport in a survey by the Skytrax travel website, overtaking Singapore’s Changi Airport, which came in first place last year.
🏦 Financial Talk: Egypt’s New Administrative Capital outside Cairo will play host to a meeting of Arab Finance Ministers in May, according to Fahd Al Turki, Director General and Chairman of the Board of Directors of the Arab Monetary Fund.
🚦 Green Lit: Crypto venture capital fund Token Bay has been granted an in-principle approval to operate in Abu Dhabi Global Market, expanding its footprint from Hong Kong as it plans to raise a second fund.
🛫 Journey Continues: Emirates airline has extended a suspension of passenger check-ins for those transiting in Dubai until 11:59 p.m. Friday as DXB continues to clear a backlog of passengers whose flights were disrupted by record-breaking rain on Tuesday.
⚽ Going Pro: New York City Football Club is bringing the first professional soccer stadium to NYC. The club is majority-owned by City Football Group, backed by UAE Deputy Prime Minister Sheikh Mansour bin Zayed.
🌍 Power Circuit
UAE President Mohamed bin Zayed met with Romanian Prime Minister Ion-Marcel Ciolacu in Abu Dhabi on Thursday to discuss trade and investment between the two countries. Prime Minister Ciolacu also laid a wreath of flowers at the Wahat Al Karama memorial, accompanied by Sheikh Theyab bin Mohamed, Deputy Chairman of the Presidential Court for Development and Fallen Heroes’ Affairs.
➿ On the Circuit
UAE Minister of State for Artificial Intelligence Omar Al Olama hailed Microsoft’s $1.5 billion investment in Abu Dhabi’s AI company G42, speaking on Thursday at the World Bank/IMF meetings in Washington. Outlining the UAE’s ambitions to become a global AI development center, Al Olama said, “We want to ensure that we are players.”
Paul Griffiths, Dubai Airports CEO, told CNBC Friday morning that the airport is “not even beginning to count” the financial impact of the UAE’s storm earlier this week that has crippled the airport for days, adding that he hopes to see a schedule approaching normality within the next 24 hours.
Pragya Misra, a former Meta employee, has been tapped to become OpenAI’s first employee in India, leading public policy affairs and partnerships, Bloomberg reports.
🎶 Culture Circuit
💙 Heart of Sharjah: A heritage and arts district planned for Sharjah, Dubai’s neighboring emirate to the north, is scheduled for completion in 2025. Called Heart of Sharjah, the neighborhood will give visitors a rare glimpse of history in the Gulf with an old souk and museums in historic buildings, Ziad Dioud writes in an op-ed for Bloomberg. He describes the preservation work being done in Sharjah and laments the destruction of centuries-old architecture across the Gulf following the creation of oil wealth and a desire to build modern cities.
Ahead on The Circuit
April 19, Washington D.C.: The Atlantic Council will host a FrontPage Conversation with the UAE’s Minister of State for Artificial Intelligence Omar Sultan Al Olama. Register for the livestream through the webpage link.
Apr. 23-25, Dubai, UAE: GISEC Global. A forum for furthering the key discussions that are helping to define cyber resilience and connecting the global cybersecurity community. Dubai World Trade Center.
Apr. 25-26, Abu Dhabi, UAE: DriftX. An event for smart, autonomous and sustainable urban mobility across air, land, and sea organized in partnership with the Abu Dhabi Investment Office, Abu Dhabi’s Smart and Autonomous Vehicles Industry (SAVI) cluster and Bayanat. Yas Marina.
Apr. 28-29, Riyadh, Saudi Arabia: World Economic Forum Special Meeting. A gathering of investors, politicians and experts on topics of collaboration, growth and energy for economic development. TBC.
Apr. 29-May 1, Riyadh, Saudi Arabia: Future Hospitality Summit. An international gathering hosted in cities around the world bringing together the most influential hospitality investors and developers. Mandarin Oriental Al Faisaliah.
Apr. 29 – May 5, Abu Dhabi, UAE: Abu Dhabi International Book Fair. A key event for the publishing industry in the Middle East and North Africa. Abu Dhabi National Exhibition Center.
Apr. 30-May 1, Abu Dhabi, UAE: Mobility Live. A conference and exhibition sponsored by the Abu Dhabi transport regulators, gathering disruptive technology developers in transportation and the public sector. Abu Dhabi National Exhibition Center.
Apr. 30-May 1, Abu Dhabi, UAE: Middle East Rail. The leading conference in the region for rail innovation, technology and strategy. Abu Dhabi National Exhibition Center.
May 5-8, Los Angeles: Milken Institute Global Conference. Politicians, financiers, media and philanthropists convene to discuss challenges across themes like innovation and technology, health and medical research, diversity and inclusion. The Beverly Hilton.
May 13-15, Abu Dhabi, UAE: Abu Dhabi Global Healthcare Week. A conference focusing on investments, and innovation to solve the most important global health challenges. Abu Dhabi National Exhibition Center and Abu Dhabi City.
May 14-15, Abu Dhabi, UAE: J.P. Morgan Asset Management: Life Sciences Innovation Summit. A gathering aimed at drawing startups and investors from the life sciences sector to Abu Dhabi. Cleveland Clinic Abu Dhabi.
May 14-16, Doha, Qatar: Qatar Economic Forum, Powered by Bloomberg. A news-driven event dedicated to global business and investment. This year’s theme is “A World Remade: Navigating the Year of Uncertainty.” Request your invite here. Fairmont & Raffles, Doha.
May 29-31, Marrakech, Morocco: GITEX Africa. The second edition of the biggest tech and startup gathering in Africa. Place Bab Jdid.
