The Daily Circuit
👋 Hello from the Middle East!
Today in The Daily Circuit, we’re looking at the funding challenges facing Mubadala-backed grocery startup Getir, Alef Education’s rocky IPO in Abu Dhabi, a pharmaceutical acquisition by Egypt’s sovereign wealth fund and how the UAE’s Zayed National Museum will keep visitors cool when it opens next year. But first, Brazil’s Copacabana rocks to the music of billions in Saudi investment.
From food security to professional football, Saudi Arabia is ready to deploy billions of dollars to invest in Brazil and its Latin American neighbors as the kingdom’s sovereign wealth fund expands its scope of global investments.
That’s the message being delivered in Rio de Janeiro by Public Investment Fund Governor Yasir Al-Rumayyan who opened a three-day conference on Wednesday aimed at cementing the Gulf country’s financial links with resource-rich nations on the South American continent.
“We started investing in Brazil in 2016… in food securities [and] we are interested in investing in technology, renewable energy, and mining, and hopefully in football too,” Al-Rumayyan said as he opened the PIF’s Future Investment Initiative Priority Summit overlooking the city’s legendary Copacabana Beach.
Touting the sovereign fund’s $2 trillion in assets, Al-Rumayyan, who is also Chairman of Saudi Aramco, the world’s biggest oil company; English soccer club Newcastle United and the two-year-old LIV Golf tournament, said the kingdom is particularly interested in companies that are developing infrastructure for artificial intelligence in the Southern Hemisphere.
“We should look for solutions [as to] how to power the AI revolution through renewable energy,” he said, “Brazil is well-positioned to be one of the major players. What you need is the right regulations and government backing, along with an investment mix.” Brazilian Energy Minister Alexandre Silveira said the kingdom intends to invest some $15 billion in Brazil.
Brazilian President Luiz Inacio Lula da Silva followed Al-Rumayyan onstage, telling the conference’s 1,500 participants that his visit to Riyadh last November provided “tremendous impetus” for collaboration with Saudi Arabia.
“We are not just the Brazil of soccer or Brazil of the violence,” Lula said. “We are also the Brazil of the men and women who want to grow and develop.”
📰 Developing Stories
HUNGRY INVESTORS
Turkish grocery delivery startup Getir, which counts Mubadala as its largest shareholder, plans to address a management dispute that has been blocking a funding lifeline from existing investors. Abu Dhabi sovereign wealth fund Mubadala demanded in April that additional cash be conditional upon changes to the board and senior management. Getir CEO Nazim Salur has this week agreed to convene an annual general assembly and vote on a new board, as the two sides work to move past the feud, Bloomberg reports. Salur founded the company in 2015, operating at its peak over 1,100 so-called “dark stores” which worked as fulfillment centers in high-density neighborhoods. At its peak, Getir raised $768 million in a Series E round at a valuation of $11.8 billion in March 2022 amid a flood of investment into the delivery space during the Covid-19 pandemic. The cash infusion spurred the company to continue its aggressive expansion into Europe and the U.S. which it has since unwound, now focusing on its home market of Turkey. It was most recently valued at $2.5 billion as of September. Other investors include Sequoia and Tiger Global, as well as the Abu Dhabi Growth Fund and Alpha Wave Global.
GOT SCHOOLED
Abu Dhabi edtech platform Alef Education struggled on its first day of trading on the ADX, in a rare down day for an IPO on a Gulf exchange. The shares closed 13% lower than the offer price of 1.35 dirhams despite strong demand for the stock when the IPO was rolled out. Investors poured in over $20 billion worth of orders, pricing Alef at the top of the range and raising 1.89 billion dirhams ($515 million) for the company. But Abu Dhabi’s first initial share sale of 2024 marks the worst debut since 2021. The 14 companies that had gone public since the start of 2021 saw their shares rise by about 31% on average in the first session, according to Bloomberg data. “Opening up below IPO price reflects negatively on the valuation it was sold at and the risk appetite of investors and liquidity of the market at that point,” Mohammed Ali Yasin, founder and chief executive officer of Oracle Financial Consultancy and Investments, told the news agency.
💲 Sovereign Circuit
ADQ: AD Ports Group, which counts ADQ as its largest shareholder, will invest $4.7 million over the next 15 years to operate three cruise terminals in Egypt. The deal with the Red Sea Ports Authority will see the ports operator develop, operate and manage the terminals at Safaga, Hurghada, and Sharm El Sheikh ports, expected to be operational by 2025.
The Sovereign Fund of Egypt: E-Z International, TSFE’s health-focused subsidiary fund, has acquired about 20% of Care Pharmacies for $1.6 million, Asharq Business reports, buying 45 of the company’s 220 branches nationwide.
↪↩ Closing Circuit
🚢 Port Investor: China’s COSCO Shipping Ports is planning to invest $375 million in Egyptian ports this year, including in Ain Sokhna port on the Red Sea’s Gulf of Suez, Asharq Business reports.
🩺 Restructuring Adviser: UAE-based hospital operator NMC Healthcare hired Rothschild & Co. to advise on its restructuring plans, including a potential IPO and sale of the business.
🇪🇬 Funding Fintech: HSBC Egypt is planning to launch a $32 million fund to invest in small and medium-sized enterprises operating within the Egyptian fintech sector, Asharq Business reports.
🐟 Financing Fish: Saudi Fisheries, an aquaculture company traded on the Tadawul Stock Exchange, secured $5 million in financing from Riyad Bank.
💳 Digital Payment: Sahl, an Egyptian startup that helps facilitate digital transactions, raised $6 million in Series A and seed funding rounds, led by Ayady for Investment and Development.
💊 Drug Supplier: Egyptian pharmaceutical distribution startup i’SUPPLY raised $2.5 million in a pre-Series A funding round with investors including Disruptech Ventures and OneStop Capital.
✂️ Cutting In: Omorfia Group, majority-owned by Abu Dhabi-based Multiply Group, has acquired UAE salon group The Grooming Co. for an undisclosed sum from private equity investor CedarBridge Capital Partners.
🗣 Circuit Chatter
📊 Bond Boost: Saudi Arabia is working on a series of steps to strengthen its bond market, including a possible easing in taxes that could make local corporate debt more appealing to foreign investors, Bloomberg reports.
⛽ Gas Hub: The UAE national oil company ADNOC approved plans to build a major liquefied natural gas export terminal as it seeks to tap into a growing global market for the fuel.
☀️ Temperature Rising: Egypt’s blazing summer heat provides an ominous warning for global economies on what to expect from a changing climate, Bloomberg reports.
⛏️ Precious Metals: Zambia will set up a new entity for investment and trading in minerals as it seeks to earn more from its natural resources, the government said on Wednesday. Abu Dhabi conglomerate International Holding Co. recently purchased a 51% stake in Mopani Copper Mines as Gulf customers line up to tap into Africa’s second largest copper producer.
💸 Asset Shelter: Abu Dhabi’s emergence as a magnet for the world’s wealthiest people is becoming a draw for Britain’s high net worth individuals who seek to shelter their assets, Bloomberg reports.
🚰 Desalination Leader: Saudi Arabia established itself as the world’s leading producer of desalinated water in 2023, boosting its production capacity to 11.5 million cubic meters.
🌍 Power Circuit
Ukrainian President Volodymyr Zelensky said he held “productive and energetic” talks with Saudi Crown Prince Mohammed bin Salman in Jeddah on Wednesday focusing on this week’s “Peace Summit” in Switzerland and improving bilateral ties.
Sheikh Mohammed bin Rashid, Vice President and Prime Minister of the UAE and Ruler of Dubai, chaired a cabinet meeting in which ministers approved a new $458 million housing assistance package.
➿ On the Circuit
Tarek Sultan, Vice Chairman of Kuwait logistics giant Agility, is considering plans to dual list shares of its Abu Dhabi-listed subsidiary Agility Global on Saudi Arabia’s Tadawul stock exchange, he told The National in an interview.
Khalaf Ahmad Al Habtoor, the Chairman and founder of Dubai-based Habtoor Group, received threats of physical violence that led the company to cancel the launch of a new Lebanese television channel, Reuters reports.
Sam Altman, CEO of OpenAI, told staff this week that annualized revenue has reached $3.4 billion – double its earnings since late last year, The Information reports. Most of revenue is from OpenAI’s subscriptions and API access, suggesting a broad uptake of its generative AI offerings. The California tech firm has a partnership with Abu Dhabi’s G42 to deploy AI tools tailored to Middle Eastern markets.
🎶 Culture Circuit
😎 Cool Building: The eye-catching winged form of the nearly-complete Zayed National Museum taking shape on Abu Dhabi’s Saadiyat Island is drawing attention from architecture buffs for its sustainability credentials. Designed by British firm Foster + Partners, the building’s decorative steel wings, ranging in height from 83m to 123m, will help maintain a naturally cool interior by drawing heat up and out of the building.
📷 Photo of the Day
🗓️ Circuit Calendar
June 11-13, Rio de Janeiro, Brazil: Future Investment Initiative Priority Summit. Saudi Public Investment Fund holds FII conference for first time in Latin America. Copacabana Palace.
June 13-15: Fasano, Italy. G7 Conference. Leaders of the G7 nations gather for annual conference with trade, climate, AI and regional conflicts in Ukraine and Gaza on the agenda.
June 16-18, Across MENA: Eid Al Adha. Government offices and businesses are closed throughout the region for the Islamic holiday.
June 22-23, New York City: Mubadala New York Sail Grand Prix. Flying catamarans compete at SailGP’s two-day racing festival in New York Harbor. Governors Island.
June 23-26, National Harbor, Maryland: SelectUSA Investment Summit. The highest profile event in the U.S. to facilitate business investment by connecting thousands of investors, companies, economic development organizations and industry experts to make deals. Gaylord National Resort and Convention Center.
July 15-26, Granada, Spain: ADIA Lab International Summer School. A course of lectures and case studies to explore the critical role of trust and safety in AI, examining the ethical, technical and societal implications of AI applications. University of Granada.