Knesset Archives

Weekly Circuit: Israelis go back to the polls + Saudi ‘Davos’ gives stage to Leumi chief

👋 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].

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COMING OUT

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.

GOING GREEN

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.

Circuit Chatter

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.

Closing Circuit

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.

Culture Circuit

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.

Israeli start-ups confront economic slowdown + Arab culture on DC’s National Mall

👋 Good Monday morning in the Middle East!

Israeli Prime Minister Naftali Bennett’s coalition government has collapsed and the business community is yawning. As the Knesset, Israel’s 120-seat parliament, debates this week when to schedule the next round of elections – likely to be held in early November – tech industry leaders who have been driving economic growth see little impact from the government’s instability. What does make a difference is the prospect of recession in the U.S., where funding for startups is getting harder to tap, as Entrée Capital founder Avi Eyal tells The Circuit below.

Techno Campus: Many of those leaders will be milling around Tel Aviv University for Cyber Week, the annual jamboree that draws prominent figures in the digital security realm. Among corporate figures expected on campus are Check Point Software CEO Gil Schwed, CyberArk CEO Udi Mokady and Jane Horvath, Apple’s chief privacy officer. From the White House come both National Cyber Director Chris Inglis and Deputy National Security Advisor for Cyber and Emerging Technologies Anne Neuberger. Prime Minister Bennett, a former cybersecurity CEO, had been scheduled to address the conference, but his appearance is in question due to recent political circumstances.

Trending in the Gulf: Analyzing future business trends in the Middle East was top of the agenda at last week’s Qatar Economic Forum, although more headlines were generated from a video interview during the conference with billionaire Elon Musk. In Washington, the United Arab Emirates introduced Americans to Gulf Arab culture with a weekend fair of music, crafts and food on the National Mall, as The Circuit’s Gabby Deutch reports.

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].

Circuit Interview

Entrée Capital’s Eyal pushed start-ups to raise cash quickly, prepare to slash expenses

Avi Eyal, co-founder of Israel-based Entrée Capital, said he and his partners have spent the past year trying to prepare cash-burning startups for the economic slowdown that has hit technology businesses around the world. The venture capital firm, one of the biggest operating in Israel, manages about $1 billion in assets and has current investments in some 150 companies internationally. His message last year — the most lucrative ever for Israeli technology — was that CEOs should accelerate fundraising efforts and determine where expenses could be reduced.

Backup Plan: “We actually went to most of our portfolio companies, and in between June and December, we raised money for the bulk of them,” Eyal said in an interview with The Circuit’s Jonathan Ferziger. “At the same time, we told all the companies to have a backup plan, have a simulation of how they would cut costs very quickly, and how they would use that money, not to achieve the same growth but to achieve a quarter of their profits or less,” he said, “Some did, some didn’t.”

Serial Entrepreneur: Born in Israel and raised from age 6 in South Africa, Eyal is an engineer and a serial founder of start-ups who opened Entrée Capital in 2010 with internet entrepreneur Martin Moshal, a childhood friend. The firm was an early investor in Monday.com, a maker of workplace management software that held its initial public offering on the Nasdaq a year ago, and fraud-detecting Riskified, which trades on the New York Stock Exchange. Tracking the markets, both have shrunk in value since their 2021 IPOs.

Gulf Investments: Recently, Entrée has been investing in the Gulf, deepening relationships with Mubadala, the $284 billion Abu Dhabi sovereign wealth fund, and other Emirati businesses, after starting quietly before the September 2020 Abraham Accords. As the collapse of Israel’s coalition government sets up the fifth national election in three years, Eyal, 51, said the political instability holds much less of a threat to tech companies than the prospect of recession in the U.S., where many seek to raise money. “Governments come and go and I don’t think it has any impact on the technology space,” he said.

Read the full story here.

World Cup warmup

Elon Musk, oil prices, World Cup soccer dominate stage at Qatar Economic Forum

Heads of state, oil executives and the richest man in the world pondered the prospects for a U.S. recession last week during the Qatar Economic Forum. The three-day conference in the capital city of Doha focused on matters ranging from the global economic slowdown and escalating crude prices to whether Qatar can rustle up enough beds to handle 1.2 million ticket-holders for soccer’s 2022 World Cup in November.

Twitter Riddle: Elon Musk, however, stole the show when he injected new uncertainty into the question of whether he will ultimately buy Twitter and talked about where he’s spending other portions of his $220 billion personal fortune. Musk, the 50-year-old chief executive of electric carmaker Tesla and rocket company SpaceX, said there were still “unresolved matters” holding up his $44 billion bid for the popular social media platform.

Recession Inevitable: Asked about the U.S. economy in an interview by video feed with John Micklethwait, editor-in-chief of Bloomberg News, Musk said a recession is inevitable and outlined the job cuts he’s ordered at Tesla that will reduce the salaried workforce by 10%. “As to whether there is a recession in the near-term, that is more likely than not.”

Energy Deals: Also at the conference was ExxonMobil CEO Darren Woods, who said oil companies will need three to five years to “catch up” on the investments required to assure adequate world supply. He spoke on a panel with Qatari Energy Minister Saad Al-Kaabi, with whom he also signed an investment agreement to take a 6.25% stake in Qatar’s $29 billion North Field liquefied natural gas project.

Read the full story here.

Gulf Encounter

An Emirati ‘majlis’ presents Arab culture at Smithsonian Festival on the National Mall

On a scorching summer afternoon, tourists to Washington, D.C., came to relax in the shade of the makeshift wooden majlis, Arabic for a sitting room, on the National Mall. The Washington Monument towered in the background. Children picked up brushes to paint watercolor pictures of flowers. A veiled Emirati girl held a falcon on her wrist, demonstrating the Bedouin discipline of handling the predatory bird.

Traveling Falcons: The dozens of interactive demonstrations and events were part of this year’s Smithsonian Folklife Festival, spotlighting the culture of the United Arab Emirates. More than 90 participants flew in from the UAE to showcase the nation’s vibrant, diverse culture. (No special plane was needed for the falconry participants; travelers on Etihad Airways can bring a caged bird with them on the plane.)

Saffron Perfume: Mona Haddad, a young woman mixing scents from saffron and rosewood to create perfumes, said she learned the craft from her mother. She dabbed a bit of oil on her fingers and rubbed it behind one visitor’s ears, telling her the fresh scent would last for three days. The festival concludes its first week on June 27 and picks up again from June 30-July 4.

Read the full story here.

Circuit Chatter

Russian Exit: Russian commodities dealers are leaving Switzerland and setting up businesses in Dubai because of sanctions stemming from Russia’s invasion of Ukraine, which are making it difficult for them to operate.

DXB-TLV: Emirates Air inaugurated daily flights between Dubai and Tel Aviv, joining five other UAE and Israeli carriers that fly the route.

Spanish Trains: Etihad Rail signed an agreement with Spain’s CAF Group worth $327 million to supply passenger trains for the UAE’s new rail network, connecting 11 cities across the country.

Friendly Skies: Qatar Airways said the company is trying to work with Saudia, Kuwait Airways and other Gulf airlines to enable soccer fans to get to Qatar for the World Cup in November.

Egyptian Spree: Saudi Arabia and Egypt signed 14 investment deals worth $7.7 billion during a visit to Egypt by Saudi Crown Prince Mohammed bin Salman, including an agreement to build the Egypt Center for Petroleum and Petroleum Products Storage.

Orbiting the UAE: Abu Dhabi-listed companies International Holding Company and Alpha Dhabi will invest a combined $50 million in Elon Musk’s SpaceX.

African Medicine: The UAE’s Etihad Credit Insurance Co. and Israel Export Insurance Corp. agreed to collaborate in financing construction of four hospitals and a medical storage facility in Ghana.

Closing Circuit

On the Radar: U.S. aerospace company Leonardo DRS will acquire Israel’s RADA Electronic Industries, which makes tactical radar systems, paying a 34% premium in a deal that values Rada at $775 million.

Energy Trade: The Abu Dhabi National Energy Company and Abu Dhabi National Oil Company will acquire major stakes in Masdar, an Emirati renewable energy company, from Abu Dhabi’s sovereign wealth fund, Mubadala Investment Company, in a deal that values Masdar at $1.9 billion.

No Borders: Israeli e-commerce platform Global-e Online said it will buy Borderfree, which specializes in international shipping, from Pitney Bowes in a $100 million cash deal.

Flying High: Israir, which runs a low-cost Israeli airline and tourism business, raised $7.3 million in an IPO on the Tel Aviv Stock Exchange.

Dream House: Huspy, a UAE-based home financing startup, raised $37 million in a Series A funding round led by Sequoia Capital India, with participation from the San Francisco-based Founders Fund.

No Hacking: U.S. media giant Comcast agreed to acquire Levl, an American-Israeli startup that develops technology for authenticating wireless devices, for an estimated $50 million.

Buy More: Israel’s Amy, which uses artificial intelligence to help sales representatives build relationships with customers, raised $6 million in a seed round of funding co-led by Next Coast Ventures and Lorne Abony.

Very Large: Abu Dhabi-based Al-Seer Marine bought two ships known as VLCCs (very large crude carriers) and worth $110 million to expand its fleet amid higher global oil demand.

Making Babies: AiVF, an Israeli fertility tech startup, raised $25 million from Insight Partners and WeWork founder Adam Neumann’s family office.

Startup Fund: Vine Ventures, a New York-based early-stage venture capital firm, raised $140 million for its second fund, with half of the money dedicated to Israeli startups.

On the Circuit

Yair Lapid: The Israeli foreign minister and leader of the Yesh Atid party is expected to become acting prime minister this week, replacing Naftali Bennett, as the Knesset decides when to schedule new elections after the splintering of the government coalition.

Ted Sarandos: The Netflix CEO met Israeli Communications Minister Yoaz Hendel in a bid to stop international streaming services from being required to produce original material in Israel. He said Netflix may reduce investment in Israel if the law is passed.

Moti Eliav: Intuit appointed Eliav as site leader and general manager for the U.S. software company’s activities in Israel, succeeding Gene Golovinsky.

Ahead on the Circuit

June 27-30, Tel Aviv: Cyber Week. International conference brings companies from 80 countries to talk about latest trends in digital security. Tel Aviv University.

July 4, Haifa: Blue 2022 Economy Conference. Maritime industry leaders meet with government, energy and environmental figures, launch National Center for Innovation and Blue Economy. Bahai World Centre.

July 19, Nazareth: Economic Conference on Arab Society in Israel, Central Bank Governor Amir Yaron meets business and government leaders. Golden Crown Hotel.

Circuit Culture

Saudi Netplay: After Saudi Arabia rattled the Professional Golf Association by organizing a rival tournament earlier this month and offering star players as much as $200 million to join, the kingdom has approached the Women’s Tennis Association about hosting an event. Golfers who participated in the LIV tour were accused of “sportswashing” Saudi human rights abuses, including the 2018 murder of dissident journalist Jamal Khashoggi.

Circle of Life: Abu Dhabi will host “The Lion King” in November when the Tony Award-winning Disney musical makes its Middle East debut with a four-week run at the Etihad Arena.

Classical to Klezmer: Israel’s annual Voice of Music Festival offers performances this week ranging from classical and jazz to klezmer and oud at Kibbutz Kfar Blum in the Upper Galilee. June 28 to July 2.