👋 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.

👋 Good Monday morning in the Middle East!

Amid the global meltdown in cryptocurrencies and tech stocks, Middle East investors can still find companies that are bucking the bear market. Nearly everyone, though, will have to contend with higher borrowing costs across the region following the U.S. Federal Reserve’s June 15 decision to raise its benchmark interest rate by 0.75% in a bid to tame rampaging U.S. inflation. It was the biggest rate hike in 28 years. Members of the six-nation Gulf Cooperation Council with dollar-pegged currencies, which excludes Kuwait, raised rates in line with the Fed. The Bank of Israel makes its decision later this month.

Fueling Europe: A glimmer of light appeared on the Mediterranean last week with the European Union’s agreement to buy offshore natural gas from a joint Israel-Egypt venture, as The Circuit’s Ruth Marks Eglash reports below. While the quantities will be modest, the deal is part of an EU drive to make up for fuel supplies that its member countries previously bought from Russia. And along with efforts to punish Moscow for invading Ukraine, the U.S. Treasury’s Deputy Secretary Wally Adeyemo visits Turkey and the UAE this week to promote sanctions on Russian assets.

Digital Doom: The crypto crisis is swiftly rewriting the scripts for both private investors and institutions in the Middle East that have poured fortunes into digital currencies. From Abu Dhabi to Tel Aviv, the biggest players in the region have been cutting staff and trimming perks. At the center of last week’s carnage was the American-Israeli lender, Celsius Network, which froze all withdrawals and transfers for some 1.7 million customers as its own cryptocurrency lost 95% of its value and Bitcoin plunged below $20,000 to its lowest since December 2020.

Welcome to The Weekly Circuit, where we cover the Middle East and North Africa 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

The European Union’s commitment to buy Mediterranean gas through an Israeli-Egyptian partnership will be a boon to the energy industries in both countries, even if it’s only a fraction of what’s needed to reduce the continent’s dependence on Russia.

Exporting LNG: Following the agreement signed in Cairo last week, government officials hailed the benefits for Israel and Egypt in working together to export liquefied natural gas to markets outside the region. Energy analysts noted, though, that it would take years to ramp up supply through the Idku and Damietta liquefaction plants on Egypt’s northern coast, limiting the prospect of actually filling the gaps in gas flow that have hiked Europe’s energy costs since Russia invaded Ukraine in February.

Relatively Small: “On a practical level, Israel is already supplying close to maximum capacity” for its domestic gas needs and the amount sent via an undersea pipeline to Egypt, Amit Mor, chief executive of Israeli consulting firm Eco Energy, told The Circuit. While “nice and symbolic,” he said, the three-way agreement “will not have a significant effect on the gas supply to Europe because it is a relatively small amount.”

Wake-Up Call: As the gas deal has clearly been in the works for several years, said Middle East political risk consultant Ghanem Nuseibeh, “what has happened with the Ukraine crisis is a wake-up call.” The fact that the countries involved have realized that they face serious and common challenges has allowed a “shift in geopolitics,” said Nuseibeh, a founder of London-based Cornerstone Global Associates. This has forced previous regional concerns and rivalries to “become of secondary importance compared to the real challenges of energy and food security faced by all the countries,” he said.

Lebanon Conflict: The cooperative effort by Egypt and Israel to supply gas to Europe stands in contrast to the saber-rattling between Lebanon and Israel that has flared over deep-water gas fields straddling the two countries’ maritime borders. Just two days before the Cairo ceremony, U.S. Special Envoy Amos Hochstein flew to Beirut in an attempt to restore calm and find a solution to the dispute between Lebanon and Israel that has simmered for years and has threatened to escalate into a military confrontation.

Read the full story here.

World Cup warmup

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

Tamara Cofman Wittes, the Biden administration’s nominee to be the assistant administrator of the U.S. Agency for International Development for the Middle East, expressed support for the Abraham Accords under questioning by Republicans on the Senate Foreign Relations Committee about past comments critical of the normalization agreements, Jewish Insider’s Marc Rod reports. Wittes was testifying at a June 16 confirmation hearing alongside Michael Ratney, formerly the chargé d’affaires at the U.S. Embassy in Israel, who has been nominated to be the ambassador to Saudi Arabia.

Background: Wittes had previously expressed skepticism about the agreement’s durability and whether other countries beyond the United Arab Emirates would join them. She described the deals as having been “oversold,” a “betrayal of Palestinian interests” by Arab signatories and an overall setback for the Palestinians. Senator Todd Young, an Indiana Republican, said that Wittes had promoted on social media an article that called the deal a “triumph for authoritarianism.” Her Twitter account is now private.

Voicing Support: At the hearing, Wittes praised the Accords, which she said brought “profound transformation” and “strengthen[ed] the pro-American coalition” in the Middle East. She said she had encouraged the Biden administration to build on the agreements before she was nominated. “The Accords offer a foundation for more cooperation between Arab States and Israel… If I’m confirmed, I look forward to engaging with you on how we can build on the Abraham Accords to bolster positive engagement across the region.”

Reverse Course: Wittes acknowledged that she was initially “skeptical” that the Accords could be expanded beyond the UAE, “and I was wrong about that.” Young, who is the top Republican on the Senate panel’s Middle East subcommittee, indicated to JI after the hearing that her remarks had not mollified his concerns, saying that her early comments about the Accords should “probably” disqualify her from the position for which she was nominated. “I think it’s notable how wrong she was as a scholar of the region,” he said.

Read the full story here.

Circuit Chatter

House-Hunting: Some 4,000 wealthy Russians fleeing their homeland because of the Ukraine conflict will move to the United Arab Emirates, while about 2,500 will hunt for homes in Israel, according to UK consulting firm Henley and Partners.

World Cup Tents: Qatar plans to pitch 1,000 Bedouin-style tents in the desert to help fill the gap in hotel rooms for soccer fans coming in November for the World Cup.

Tunnel View: Saudi Arabia’s $500-billion megacity, NEOM, has awarded contracts to two joint ventures connected to China and South Korea to build two 28-kilometer (17-mile) tunnels for high-speed trains. The massive project on Saudi Arabia’s northwestern coast reportedly will also include a desalination plant powered entirely with renewable energy.

Green Machine: Israel Aerospace Industries unveiled a new rocket-detection system called the Green Lotus, which is laden with sensors that can alert military forces to artillery and mortar fire, and assess the enemy’s surveillance capabilities.

Masked Again: The UAE will require wearing masks again in malls and all other indoor public spaces following a rise in COVID-19 cases. Saudi Arabia, on the other hand, has dropped mask requirements as fewer cases have been recorded.

Grow Your Own: Egypt, the world’s biggest importer of wheat, said the nation’s farmers must double sales of the crop to the government or face prison, to make up for disruption of supplies stemming from the Ukraine conflict.

Hong Kong Crypto: Israel’s central bank and its Hong Kong counterpart will test the feasibility of a government-issued digital currency that has bolstered protection against cyber risks.

Closing Circuit

Chips Ahoy: U.S. semiconductor maker Qualcomm said it will acquire Israeli startup Cellwize, which accelerates the deployment of 5G networks, for $350 million.

IPO Fever: Oman is mulling an initial public offering for two units of state oil company OQ, following similar shares sales in Saudi Arabia and the UAE.

Sportsbot: Pixellot, an Israeli startup that automates the broadcast of sporting events using artificial intelligence, raised $161 million in a funding round led by PSG Equity.

Waste Not: Right Farm, a Dubai startup that helps food retailers and restaurants reduce waste of fruits and vegetables, raised $2.8 million from investors, including ADQ and Enhance Ventures.

SPAC Travel: Holisto, an Israeli online travel booker, will merge with a SPAC (special purpose acquisition company) and sell shares on Nasdaq at a value of $405 million.

Better Image: Aidoc, an Israeli developer of radiology software, raised $110 million in a funding round co-led by TCV and Alpha Intelligence Capital.

Career Starter: Canditech, an Israeli company that develops software to evaluate job candidates, raised $9 million in a seed funding round co-led by Insight Partners and StageOne Ventures.

Hit the Accelerator: AnD, a Tel Aviv venture capital platform, and New York-based 25madison are joining forces to help accelerate the ability of Israeli startups to operate in the U.S. market.

On the Circuit

Salim Al-Aufi: Oman appointed Al-Aufi as energy minister, replacing Mohammed Al-Rumhi, who held the office for 24 years.

Fahad bin Abdullah Al-Dosari: Saudi Arabia’s General Authority for Statistics appointed Al-Dosari as president, succeeding Konrad Pesendorfer. Al-Dosari was previously deputy governor of the Saudi Central Bank.

Doron Almog: The Jewish Agency appointed Almog, a retired general, to direct the quasi-governmental institution that promotes immigration to Israel.

Ahead on the Circuit

June 20-22, Doha, Qatar: Qatar Economic Forum. The conference, sponsored by Bloomberg, focuses on new Middle East frontiers for technology. Ritz-Carlton, Doha.

June 21, Dubai: Energy & Sustainability Summit. The international conference examines the MENA region’s energy transition, focusing on how the construction industry is putting sustainability into practice. St. Regis Hotel, Dubai.

June 21-22, Jerusalem: Eli Hurvitz Conference on Economy and Society. Israel’s top political, business leaders gather for annual conference to ponder future economic and social directions. Orient Hotel.

June 27-30, Tel Aviv: Cyber Week. International conference brings companies from 80 countries. Speakers include Israeli Prime Minister Naftali Bennett, White House cyber adviser Anne Neuberger. Tel Aviv University.

Circuit Culture

Turning the Page: Dubai’s new Mohammed bin Rashid Library, the biggest in the Gulf, cost 1 billion dirhams ($272 million) to build, and resembles a huge open volume sitting on a bookstand. As visitors poured into the gleaming stone-and-glass structure at its opening last week, they were greeted by robot librarians boasting about the collection of more than 1.1 million printed and digital books. The library houses a broad selection of rare books, atlases and manuscripts, some dating back to the 13th century. It also has a collection of unique versions of the Quran, Latin translations of Islamic scholarly works and a first edition of Napoleon’s Description de l’Égypte, an 18th-century encyclopedic register of Egyptian history and archaeology.

Buzz Cut: Disney’s “Lightyear” has been banned in the UAE over content in the cartoon film that includes a same-sex kiss. Some 14 other countries across the Middle East and Asia, including Lebanon, Egypt, Kuwait and Malaysia have also forbidden showing the film, produced by Disney and Pixar, that expands on the tale of “Toy Story” spaceman Buzz Lightyear. Muslim countries that have protested Western films for portraying homosexual behavior on screen say they’re not alone, pointing to polls in the U.S. that show such content offends many in American audiences as well. Variety reported that the studios cut the kissing scene between two female characters in “Lightyear” at one point but restored it after a group of LGBTQ+ employees and their allies released a statement accusing them of censoring same-sex affection.

👋 Good Monday morning in the Middle East!

Saudi Arabia is stretching its wings as the kingdom prepares for President Joe Biden’s expected trip to Riyadh in July. Rising global gas prices, sparked by the Russia-Ukraine conflict, are filling Saudi Aramco’s coffers with cash and fueling the state-owned petroleum producer’s drive to eclipse Apple as the world’s biggest company, with a recent market value of $2.4 trillion. The president’s imminent Mideast swing, which will also take him to Jerusalem, is shaping up as a coming-out party for Crown Prince Mohammed bin Salman, the country’s de facto ruler, who retreated from the limelight in 2018 after accepting responsibility but not blame for the murder of Washington Post columnist and Saudi dissident Jamal Khashoggi.

Got Game: Prince Mohammed is now trying to make good on his promises to wean Saudi Arabia off its historic oil dependence. In opening up the economy to non-traditional businesses, the kingdom acted on the 36-year-old king-in-waiting’s well-known interest in gaming last week when its Public Investment Fund bought a $1 billion stake in Sweden’s Embracer Group video game and media holding company. While the government allocated $100 million on a program to train 100,000 people to perk up the country’s tourist trade, a Saudi-funded $25 million golf tournament outside London tangled with the PGA, prompting the suspension of Phil Mickelson and other top players from the sport’s flagship league. It also fueled talk of Saudi “sportswashing.”

Diplomatic Response: When Israeli Prime Minister Naftali Bennett touched down last week in Abu Dhabi, Ambassador Amir Hayek was waiting on the tarmac to whisk him to the royal court. Most days, people have to wait for Hayek, Israel’s first ambassador to the UAE, whose schedule is jammed with Israeli company executives who want his help to break into Gulf markets, as he told The Circuit’s Jonathan Ferziger in an interview. Back in Israel, many of those businesses are feeling the heat from Wall Street’s plunge and demands from VC investors to tighten their belts, according to a survey outlined below.

Welcome to The Weekly Circuit, where we cover the Middle East and North Africa through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please write to [email protected] to tell us what you like and what we can improve. Story tips are welcome.

Circuit Interview

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

Bombarded by requests for personal assistance from startup executives hoping to launch business operations in the United Arab Emirates, Israeli Ambassador to the UAE Amir Hayek has developed a technique for identifying the winners and being candid with the rest.

Meeting Needs: “In one hour, I meet 11 companies,” Hayek, Israel’s first ambassador to the oil-pumping Gulf state, told The Circuit’s Jonathan Ferziger. “It’s speed-dating. Some I tell not to come, some I say if you make a little switch in your approach, you can meet Emirati needs, and some I say, run, because we are looking for the technology you’ve got.”

Mideast Beachhead: Hayek ticks off several reasons why the UAE offers a unique opportunity for Israeli companies: access to capital from some of the world’s biggest investment funds; a diverse expatriate workforce; its position as an international shipping and logistics hub; a government-led “infrastructure for innovation” that includes grants and tax incentives; and the country’s willingness to serve as a beachhead to markets in Arab and Islamic states that Israelis haven’t been able to reach before.

Coalition Woes: Hayek, whose fluent Arabic comes from growing up in an Iraqi Jewish family that fled persecution in Baghdad in the 1950s, says the precarious state of Israel’s current coalition government won’t keep trade with the Gulf from growing. In April, Prime Minister Naftali Bennett lost his majority in the 120-seat parliament, and predecessor Benjamin Netanyahu is gathering strength to make a comeback. “Any Israeli government will support the Abraham Accords,” Hayek said. “Even if the government falls, you won’t see any gap.”

Read the full story here.

World Cup warmup

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

The global tech slowdown is slowly seeping into the consciousness and corporate decision-making of Israeli executives and employees, according to a new survey conducted by data consultant Startup Snapshot.

Wake Up: Among the findings in a report released June 8, startup founders are increasingly worried about their ability to raise money, venture capital funds are pressuring companies to cut costs and employees haven’t woken up to how vulnerable they’ve become. The project was developed by Startup Snapshot founder Yael Benjamin and supported by Intel Ignite, Leumitech, The Zell Entrepreneurship Program and the Yigal Arnon & Co. law firm.

Warning Calls: Based on more than 450 responses and conducted over the past two months, the survey found that the tightening of venture funding has eclipsed hiring and retention of employees as the most pressing concern of company founders. Some 52% said they received warning calls from board members about pressure from venture capital firms to cut costs and extend their cash runway.

Hiring Slows: To reduce spending, 45% of companies surveyed said they’re slowing down hiring growth, 18% are freezing hiring altogether and 4% are firing employees. Many said company shutdowns present an opportunity for stronger firms to hire talented staff. At the same time, 68% of employees said they aren’t worried about their company’s survival. The report suggested that is due to a “clear asymmetry of information, as employees are not privy to rising investor concerns that founders hear behind closed doors.”

Stop the Burn: Startup founders are under pressure “to show investors growth while also cutting burn rates,” Benjamin said in the report. The survey shows their need to “make everything stretch and rethink their cost structure, including head count,” she said.

New Allies

Abraham Accords Caucus urges integrated Middle East air-defense program

In its first legislative initiative since its founding earlier this year, the congressional Abraham Accords Caucus, comprised of members of both the House and Senate, introduced legislation on Thursday to encourage the U.S. to pursue a joint missile-defense architecture with Israel and the U.S.’s Arab allies and partners in the Middle East — including Saudi Arabia and Iraq, Jewish Insider’s Marc Rod reports.

Drone Alert: The bipartisan Deterring Enemy Forces and Enabling National Defenses (DEFEND) Act advances a priority of both lawmakers on Capitol Hill and U.S. military command in the Middle East — building an integrated air- and missile-defense capability among the U.S.’s regional partners and allies to ward off ongoing drone and missile attacks by Iran and its proxies. The legislation calls for Israel, Saudi Arabia, the United Arab Emirates, Iraq, Bahrain, Jordan, Egypt, Kuwait, Oman, Qatar and other regional partners and allies to be included within this cooperative framework.

Engaging Riyadh: While Capitol Hill is split on the issue, with some Democrats urging President Joe Biden not to upgrade relations with Saudi Arabia, the lawmakers introducing the DEFEND Act were supportive of improving U.S.-Saudi ties. “It is important that our president is engaging with Saudi Arabia. We know that there have been human rights abuses… but in order for that to change we have to have dialogue,” Sen. Joni Ernst, an Iowa Republican, one of the legislation’s cosponsors, said.

Read the full story here.

Circuit Chatter

Saudi Golf Clash: The PGA suspended 17 top professional golfers, including Phil Mickelson and Dustin Johnson, for participating in the maiden event of the rival Saudi-backed LIV Golf tournament outside London. South Africa’s Charl Schwartzel won the $25 million purse.

Islamic Lending: The $2.2 trillion global Islamic finance industry will expand by about 10 percent through the end of 2023, according to a report by S&P Global Ratings.

High-Rent District: Tel Aviv is the world’s sixth most expensive city, according to ECA International. Hong Kong led the annual list of 207 major cities, followed by New York, Geneva, London and Tokyo. Ankara, Turkey, was the cheapest. Abu Dhabi was 22 on the list, Dubai 23, Riyadh, 28 and Doha, Qatar, 35.

Emirati Growth: The UAE economy is projected to grow by an annual 5.4 percent this year, up from 3.8 percent in 2021. Dubai’s non-oil private sectorreached its strongest point in nearly three years.

Teaching Tourism: Saudi Arabia will spend $100 million to train 100,000 people to work in the tourism and sustainability sectors as it seeks to become a global tourism hub.

Closing Circuit

Setting Sail: DP World will sell a minority share in three top assets to CDPQ, a Canadian investment group. CDPQ said it will invest $2.5 billion in the Jebel Ali Port, the Jebel Ali Free Zone and Dubai’s National Industries Park.

Gaming in Riyadh: Saudi Arabia’s Public Investment Fund has acquired an 8.1% stake worth $1 billion in Swedish gaming business Embracer Group.

Gas Option: Israeli real estate developer Aaron Frenkel plans to exercise an option and buy an 11% stake in the Tamar natural gas field from Abu Dhabi-Mubadala Petroleum for $485 million, according to Globes.

Controlled Environment: Mubadala Investment Company, Abu Dhabi’s strategic investment arm, and EQT Private Equity agreed to acquireEnvirotainer, a global temperature-controlled supply chain solutions company for the biopharmaceutical industry.

Growing Diamonds: Lusix, an Israeli producer of lab-grown diamonds co-founded by digital printing entrepreneur Benny Landa, raised $90 million in financing from LVMH Luxury Ventures, Ragnar Crossover Fund and More Investments.

Jordanian Tech: Abu Dhabi’s holding company ADQ has launched a $100 million technology-focused venture capital fund to invest in Jordanian tech companies.

Turkish Flight: Shares of Turk Hava Yollari AO, Turkey’s national airline,have climbed almost 150% this year as a weak currency makes the country more affordable for foreigners.

IPO Fever: Dubai will sell a 12.5% stake in Tecom Group, which operates business districts housing some 7,800 companies, with an IPO on the Dubai Financial Market.

Pay Up: Nymcard, an Abu Dhabi-based banking payment startup, raised $22.5 million in a funding round co-led by DisruptAD, Reciprocal Ventures and Shorooq Partners.

On the Circuit

Sheila Al-Ruwaili became the first woman to join the board of the Saudi Central Bank. Al-Ruwaili is CEO of Wisayah Investment Co., a board member of Saudi Aramco Power Co.

Danielle Wolfson, the only Israeli woman to reach the top of Mount Everest, secured sponsorship from Israel’s Tadiran Group in her bid to scale Alaska’s Mount Denali, the highest peak in North America.

Yoel Razvozov, Israel’s tourism minister and a former judo champion, went to Athens last week to sign an agreement with his Greek counterpart, Vassilis Kikilias, promoting travel between their two countries and joint packages for visitors from Asia and the U.S.

Ahead on the Circuit

June 13-17, Paris: Eurosatory, the European defense and security conference, will include a booth by Israel Aerospace Industries, unveiling the Othello-P gunfire-detection system, which uses artificial intelligence to alert troops to small arms, snipers, machine guns and RPGs.

June 14, Haifa, Israel: Technovation Conference 2022. Contemplating the future of technology businesses in Israel. Churchill Auditorium, Technion Israel Institute of Technology.

June 20-22, Doha, Qatar: Qatar Economic Forum. Sponsored by Bloomberg,the conference focuses on new Middle East frontiers for technology. Ritz-Carlton, Doha.

June 21-22, Jerusalem: Eli Hurvitz Conference on Economy and Society. Israel’s top political, business leaders gather for annual conference to ponder future economic and social directions. Orient Hotel.

Circuit Culture

World Cup Breakthrough: Qatar will allow Israeli soccer fans to enter its borders for the World Cup in November even though the two countries don’t have diplomatic relations. Under terms reached with FIFA, world soccer’s governing body, Israelis seeking to attend a game must first purchase a ticket, then apply online for a Fan ID card. Once they’re approved, they will be admitted to the Gulf state.

Jazz is Back: The Jerusalem Jazz Festival takes off next month for its eighth year, presenting a mix of international and Israeli musicians. Based at the Israel Museum, the festival offers a broad variety of jazz, ranging from Dixieland and Swing to tunes influenced by pop, hip hop and groove. Along with Israeli artists led by trumpeter Avishai Cohen, the festival’s artistic director, the lineup includes American pianist Fred Hersch as well as performers from North and Central Africa, Switzerland, Turkey, the U.S. and South America.

The Connector

To crack Emirati market, CEOs line up for ‘speed-dating’ with Israel’s ambassador in Abu Dhabi

Amir Hayek, Israel’s first UAE embassy chief, says tech companies will fuel trade growth between the two countries even in rocky political terrain

Kobi Gideon/Israel Government Press Office

UAE President Mohamed bin Zayed Al Nahyan meets Israeli Ambassador Amir Hayek in Abu Dhabi

By

Jonathan H. Ferziger

June 13, 2022

Bombarded by requests for personal assistance from startup executives hoping to launch operations in the United Arab Emirates, Israeli Ambassador Amir Hayek has developed a technique for identifying the winners and being candid with the rest.

“In one hour, I meet 11 companies,” said Hayek, Israel’s first ambassador to the oil-pumping Gulf state, whose first encounters often take place through a Zoom screen. “It’s speed-dating. Some I tell not to come, some I say if you make a little switch in your approach, you can meet Emirati needs, and some I say, run, because we are looking for the technology you’ve got.”

While the silver-haired, 58-year-old diplomat escorts Prime Minister Naftali Bennett and other Israeli officials in Abu Dhabi when they meet Sheikh Mohamed bin Zayed Al Nahyan, who acceded last month to become president of the UAE, it’s the business side of the job that lights him up. Since the Abraham Accords were signed on the White House lawn in September 2020, normalizing ties with the UAE and Bahrain, the Gulf states have become some of Israel’s biggest trade partners.

Hayek ticks off several reasons why the UAE offers a unique opportunity for Israeli companies: access to capital from some of the world’s biggest investment funds; a diverse expatriate workforce; its position as an international shipping and logistics hub; a government-led “infrastructure for innovation” that includes grants and tax incentives; and the country’s willingness to serve as a beachhead to markets in Arab and Islamic states that Israelis haven’t been able to reach before.

“You might find each and every one of these in another country, but combined, you can find them only in the UAE,” he said from Abu Dhabi in a Zoom interview with The Circuit.

Israel and the UAE signed a free-trade agreement in May that will eliminate customs duties from both countries on some 96 percent of goods, including food, agricultural products, cosmetics, medications and medical equipment. Last week, the Dubai International Chamber announced it will open a Tel Aviv office to help connect Emirati and Israeli businesses. Bilateral trade is projected to increase from $1 billion to $10 billion over the next five years.

Hayek, whose fluent Arabic comes from growing up in an Iraqi Jewish family that fled persecution in Baghdad in the 1950s, says the precarious state of Israel’s current coalition government won’t keep trade with the Gulf from growing. In April, Bennett lost his majority in the 120-seat parliament, and former Prime Minister Benjamin Netanyahu is gathering strength to make a comeback.

“Any Israeli government will support the Abraham Accords,” Hayek said. “Even if the government falls, you won’t see any gap.”

Similarly, he sees little chance that the UAE will pull out of the U.S.-brokered normalization deal it signed alongside Bahrain. Morocco and Sudan joined soon after. Hayek said he wasn’t ruffled when he was summoned to the Foreign Ministry in Abu Dhabi last month to hear the UAE’s official protest against Israel’s response to clashes with Palestinians at holy sites in Jerusalem.

“We had a good conversation,” he said. “You can tell one thing about the Emiratis – they don’t watch the movie from the middle. They play the movie from the beginning to the end. I trust that the Emiratis see the whole picture and understand what happened on the Temple Mount. No one wants anything bad to happen there and Israel is doing its best to keep the status quo. I hope we will not see those scenes again.”

The Palestinian Authority opposed the Abraham Accords and argues that Arab countries should reject normalization until a just solution is found to the Palestinian-Israeli conflict. Saudi Arabia, the biggest Arab economy, maintains that fairly addressing Palestinian concerns must precede establishing official ties with Israel. U.S. President Joe Biden is planning a Mideast trip to Israel and Saudi Arabia in July that may include a meeting with Palestinian Authority President Mahmoud Abbas.

By the end of 2022, the UAE-Israel Business Council expects that close to 1,000 Israeli companies will be operating inside the UAE – or through it to manage activities in the Middle East and Asia. The largest deal between the two countries was the 22% stake that Mubadala Petroleum bought in Israel’s offshore Tamar gas field from Delek Drilling for $1 billion in 2020. It may soon sell half of that to an Israeli investor.

The giant energy company is controlled by Mubadala Investment Co., an Abu Dhabi sovereign wealth fund, which has more than $230 billion in assets under management and has invested about $100 million in Israeli venture capital firms. OurCrowd, a Jerusalem-based funding platform for startups with multiple investments in the Gulf, was the first Israeli VC to open an office in the UAE that is licensed to operate in the Abu Dhabi Global Market financial center.

Hayek, a father of four, grew up in the Tel Aviv suburb of Petah Tikvah and graduated with an accounting degree from Tel Aviv University. He has held a series of senior positions in the Israeli government, including director-general of the Industry and Trade Ministry. Hayek was also at various points chief of the Israeli Export Institute, the Israel Manufacturers Association and the Israel Hotel Association.

“He’s a talented connector,” said Shalom Lipner, a non-resident senior fellow at the Atlantic Council, who recalled that Hayek was invaluable when the Washington-based think tank organized its N7 conference in the Abu Dhabi desert last year, attracting senior officials from all the Arab countries that have official ties with Israel, including Egypt and Jordan.

“With his track record in business and government, Hayek has the right skill-set to manage the delicate details of bringing Arabs and Israelis together,” said Lipner, who was a policy advisor and strategist during his government career for seven Israeli prime ministers.

Hayek’s small staff in the UAE, supplemented by temporary personnel sent from Jerusalem, will grow this year to house one of the largest commercial delegations of any Israeli embassy in the world, he said. Among possible joint ventures are proposals for Emirati investment in Israeli energy exploration, rail projects, airports and seaports, he said. Israeli technology companies with the best chances of success in the UAE are involved with water conservation, energy, telemedicine, medical devices, agrotech, foodtech and fintech, according to Hayek. He also said he’s in frequent touch with his counterpart, Mohamed Al Khaja, the UAE ambassador to Israel.

“We didn’t come here for a 200-meter sprint and neither did the Emiratis,” he said. “We came to run the marathon. We came to build this right, to build the infrastructure, to let people get to know each other, to know each other’s manners, habits, way of doing business, and it takes time. We started very quickly and we are running faster every day.”

👋 Good Monday morning in the Middle East!

Record IPO: Investors this week will be watching Borouge after the petrochemical plastics maker carried out Abu Dhabi’s biggest-ever IPO and surged more than 20 percent on its first day of trading. The company, a joint venture between the Abu Dhabi National Oil Company and Austrian chemical maker Borealis AG, raised $2 billion in its June 3 share sale, which was oversubscribed by 42 times. Borouge’s market value soared to above $24 billion.

Growth Enabler: The Abu Dhabi IPO’s success is another example of how investors are fueling a stock market boom across the Gulf while the rest of the world buckles under the weight of the Ukraine conflict and spreading economic slowdown. In the words of Sultan Al Jaber, the UAE Minister of Industry and Advanced Technology, who is chairman of Borouge and managing director of ADNOC, the stunning debut reinforces the national oil company’s “continued role as the critical enabler of growth and expansion of the UAE economy and private sector.”

Where’s Joe: This week’s top guessing game is whether President Joe Biden will be visiting the Middle East anytime soon. First he appeared to be on track to land in Israel later this month. Then the White House started buzzing about Air Force One heading from Tel Aviv to Riyadh for a bid at rapprochement with Saudi Crown Prince Mohammed bin Salman, whom Biden has long said should be held to account for the killing of journalist Jamal Khashoggi. Before the weekend, the administration pulled back and said no Mideast trip is being planned before July.

Calling Qatar: Gulf investors, meanwhile, are showing interest in the multitude of tech start-ups germinating in Israel, as Michael Eisenberg, co-founder of the Tel Aviv-based venture capital fund Aleph, told The Circuit in an interview excerpted below. Among the standout companies in his portfolio is Freightos, which secured a Nasdaq listing last week through a SPAC merger and disclosed that Qatar Airways is one of its key inventors.

Welcome to The Weekly Circuit, where we cover the Middle East and North Africa through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please write to [email protected] to tell us what you like and what we can improve. Story tips are welcome.

Looking east

Gulf-Israel investors can weather political discord by cultivating personal ties, Aleph’s Eisenberg says

As an early investor in WeWork, Michael Eisenberg says he doesn’t let the inevitable ups and downs of a young, disruptive company shake his faith when he strongly believes in its product.

Confident in Gulf: Similarly, the co-founder of Tel Aviv-based venture capital fund Aleph told The Circuit’s Jonathan Ferziger in an interview that he’s confident in Israel’s budding relationship with the Arab Gulf states and excited about the prospects it presents for the more than 40 companies in his investment portfolio. Ongoing conflict with the Palestinians and lingering hostility even in countries such as Egypt and Jordan that signed peace treaties, he said, are unlikely to derail the 2020 Abraham Accords, which normalized Israel’s ties with the United Arab Emirates, Bahrain and Morocco.

Building Trust: “The Emiratis are relationship people and they believe in long-term relationships,” said Eisenberg, 51, a native New Yorker who immigrated to Israel after college and whose fund has about $850 million under management. “It will last if we build trust.”

Qatar Invests: Aleph’s stable of startups has proven attractive to Gulf investors. Freightos, an online marketplace that helps businesses find favorable sea and air cargo shipping rates, said last week that Qatar Airways is among its investors — together with FedEx and several airlines in Europe and Latin America. The disclosure came as Freightos agreed to merge with a special purpose acquisition company (SPAC) that will give it a Nasdaq listing and a pro forma enterprise value of $435 million. Freightos is registered in the Cayman Islands. It has offices in Jerusalem; Hong Kong; Barcelona, Spain; Miami, Florida; and Ramallah, West Bank.

Tapped by Abu Dhabi: Aleph itself was one of six funds chosen by Mubadala, the $250 billion sovereign wealth fund of Abu Dhabi, to distribute $100 million in investment to Israeli startups, according to the Wall Street Journal. Eisenberg declined to confirm the report, though he said Mubadala executives recently came to visit his team at Aleph’s airy downtown Tel Aviv offices, which is in a restored century-old hotel on Rothschild Boulevard.

Read the full story here.

Circuit Interview

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

The free-trade agreement signed last week between the United Arab Emirates and Israel is generating interest among investors in Saudi Arabia who are making plans for the possibility their own government will soon normalize relations with the Israelis, an Emirati venture capitalist said.

Looking for an opening: “I would expect that Saudi businessmen are just going to watch, learn and try to position themselves for if and when anything opens up” with Israel, said Sabah al-Binali, executive chairman of OurCrowd Arabia, a UAE-based unit of Israel’s OurCrowd venture capital platform.

Signed in Dubai: Al-Binali spoke to reporters following a May 31 ceremony in Dubai in which Israeli Minister of Economy and Industry Orna Barbivai and Emirati Minister of State for Foreign Trade Thani Al Zeyoudi signed the agreement. Some 96 percent of goods traded between the two countries, including food, agricultural products, cosmetics, medications and medical equipment, will be exempt from customs duty under the pact.

Biden in Mideast: The effort to tear down trade barriers between Israel and the UAE comes nearly two years after the two nations and the Gulf state of Bahrain signed the U.S.-brokered Abraham Accords, normalizing relations between the former Middle East adversaries. U.S. President Joe Biden may travel to both Israel and Saudi Arabia next month.

GCC next?: As Arabs and Israelis grow more comfortable with each other, Al-Binali said it’s time to start work on a more comprehensive regional framework for the holdouts to the Abraham Accords: Saudi Arabia, Kuwait, Qatar and Oman. “It’s one thing to go do six bilateral free-trade agreements,” Al-Binali said in the discussion with reporters by Zoom. “The interesting question is can Israel end up at some point in the future doing a single, bilateral, free-trade agreement with the GCC [Gulf Cooperation Council] itself?

Read the full story here.

Circuit Chatter

Desert Towers: Saudi Arabia is planning to construct the world’s largest buildings in Neom, its futuristic $500 billion megacity. The twin skyscrapers are expected to be about 500 meters (1,640 feet) tall and stretch horizontally for dozens of miles. Meanwhile, the Wall Street Journal reports that expatriate executives recruited to help build Neom are leaving amid workplace culture clashes with Saudi executives.

Going Up: Tel Aviv housing prices rose 14 percent in the first quarter of 2022, four times Israel’s national average. An average apartment in Israel’s biggest city now costs almost $1 million.

Avoid Disaster: The World Bank said Lebanon will have to adopt a credible, comprehensive and equitable macro-financial stabilization program if it wants to avoid total destruction of its social and economic fabric.

Crypto Gulf: Oman’s central bank is developing a digital currency and opening up banking services, Executive President Tahir Al Amri said at a conference in Muscat.

Screen Time: The size of the Middle East and North Africa gaming market is projected to increase to more than $5 billion by 2025, a 19 percent jump from 2019.

Green Hydrogen: Egypt’s Suez Canal Economic Zone and H2-Industries have signed a memorandum of understanding to build a waste-to-hydrogenfacility in east Port Said with an estimated cost of $4 billion, with capacity to produce 300,000 tons of green hydrogen per year.

Closing Circuit

Saudi Search: Google will set up two new offices in Saudi Arabia, located in Riyadh and al-Dammam. The U.S. search giant is also building a data partnership with Saudi Aramco.

Bus Fare: Nearly all the shareholders in Israel’s Egged bus companyapproved the sale of a 60% stake to the Keystone Fund, which invests in infrastructure development, for 2.8 billion shekels ($838 million).

Steak Stake: The owner of the Nusr-Et steakhouse, known by its founder’s Salt Bae meme, is in talks to sell a stake to Qatar’s $450 billion wealth fund.

Green Tarmac: UAE airport services unit dnata plans to invest $100 million on green operations in the next two years, as part of wider plans to halve its carbon footprint by 2030.

Funds for Labor: Hourly.io, an Israeli-founded payroll startup based in Palo Alto, Calif., said it has raised $27 million in a Series A funding round led by Glilot Capital Partners.

Data Dollars: Israeli data analytics startup Coralogix said it has raised $142 million as part of a series D funding round.

On the Circuit

Ted Sarandos, CEO of Netflix, plans to visit Israel in late June in an effort to stop legislation that would require international streaming services to invest in the production of original Israeli content.

Omran Sharaf, project director of the Emirates Mars Mission, was namedthe next chairman of the United Nations Committee on the Peaceful Uses of Outer Space and will serve a two-year term.

Nelson Peltz, whose Trian Fund Management LP owns a 1.5 percent stake in Unilever, will join the company’s board this summer. Peltz met with Unilever last year in a bid to stop the company from dropping its Israeli licensee because it sells products in what Unilever subsidary Ben & Jerry’s called “Occupied Palestinian Territory.”

Ahead on the Circuit

June 7-8, Dubai: Bonds, Loans and Sukuk Middle East. Conference brings together issuers, investors and bankers to discuss bond, syndicated loan and sukuk markets. Madinat Jumeirah.

June 14, Haifa, Israel: Technovation Conference 2022. Contemplating the future of technology businesses in Israel. Churchill Auditorium, Technion Israel Institute of Technology.

June 20-22, Doha, Qatar:Qatar Economic Forum. Sponsored by Bloomberg,the conference focuses on new Middle East frontiers for technology. Ritz-Carlton, Doha.

Circuit Culture

What’s Old is new

In Egypt, an effort to restore the country’s historic synagogues and bolster tourism

Since mid-April, Cairo’s 1,140-year-old Ben Ezra Synagogue has been under renovation as part of the Egyptian government’s efforts to resurrect the slumbering Jewish heritage in Egypt that resonates around the world. According to popular folklore, the synagogue is situated on the site where baby Moses was discovered. It is by far the oldest Jewish temple in Cairo. Rebecca Anne Proctor reports from Cairo for Jewish Insider on the restoration work underway.

Built by history: Located amid some of the oldest Coptic churches in the country as well as the oldest mosque in Egypt, the Mosque of Ibn Tulun, the synagogue, which dates to circa 882 CE, is sometimes referred to as the El-Geniza Synagogue or the Synagogue of the Levantines. The area where it is situated, formerly the center of El Fustat, the first Islamic capital of Egypt built by Amr Ibn El Aas in 642 CE, presents a unique cluster of ancient religious buildings spanning all monotheistic religions. “The building serves as witness to the freedom of religious belief Egypt had,” Femony Anwar Okasha, an Egyptian researcher in heritage who guides tours through Old Cairo, told The Circuit.

Government support: The renovations are funded by the Egyptian Ministry of Tourism and Antiquities. The head of the committee supervising the restoration process, Mustafa Abdel-Fattah, told El Watan News that the renovation work includes insulating surfaces to protect against moisture, treating cracks, cleaning the walls and protecting color layers from the ravages of weather.

New friends: Analysts say that the project is part of the Egyptian government’s aim to attract more tourists to the country. It is also, says Yoram Meital, a professor in Ben-Gurion University’s Middle East studies department and Egypt specialist, indicative of a growing Egyptian interest in its Jewish heritage dating back to the 2011 Arab Spring uprisings, which has increased since normalization between Israel and several Gulf Arab nations. “The Jewish past in Arab countries, not only in Egypt, has gained widespread public recognition and respect in recent years, and this is a new development,” explained Meital.

Read the full story here.

As an early investor in WeWork, Michael Eisenberg says he doesn’t let the inevitable ups and downs of a young, disruptive company shake his faith when he strongly believes in its product.

Similarly, the co-founder of Tel Aviv-based venture capital fund Aleph is confident in Israel’s budding relationship with the Arab Gulf states and excited about the prospects the ties present for the more than 40 companies in his investment portfolio. Ongoing conflict with the Palestinians and lingering hostility even in countries such as Egypt and Jordan that signed peace treaties, he said, are unlikely to derail the 2020 Abraham Accords, which normalized Israel’s ties with the United Arab Emirates, Bahrain and Morocco.

“The Emiratis are relationship people and they believe in long-term relationships,” said Eisenberg, 51, a native New Yorker who immigrated to Israel after college and whose fund has about $850 million under management. “It will last if we build trust.”

Aleph’s stable of startups has proven attractive to Gulf investors. Freightos, an online marketplace that helps businesses find favorable sea and air cargo shipping rates, said last week that Qatar Airways is among its investors — together with FedEx and several airlines in Europe and Latin America. The disclosure came as Freightos agreed to merge with Tel Aviv-based Gesher, a special purpose acquisition company (SPAC) that will give it a Nasdaq listing and a pro forma enterprise value of about $435 million. Freightos is registered in the Cayman Islands. It has offices in Jerusalem; Hong Kong; Barcelona, Spain; Miami, Florida; and Ramallah, in the West Bank.

Aleph itself was one of six funds chosen by Mubadala, the $250 billion sovereign wealth fund of Abu Dhabi, to distribute $100 million in investment to Israeli startups, according to the Wall Street Journal. Eisenberg declined to confirm the report, though he said Mubadala executives recently came to visit his team at Aleph’s airy downtown Tel Aviv office, which is in a restored century-old hotel on Rothschild Boulevard.

“I’m super bullish about the Emirates serving not only as a target market, not only as a place for joint ventures, but also as a gateway to Asia,” Eisenberg said. Saudi Arabia, which has many business ties with Israeli companies but has resisted the normalization drive, will come to terms with Israel eventually, he said. President Joe Biden is mulling plans to visit both Israel and Saudi Arabia next month.

The other funds distributing Mubadala Investment Co.’s money to Israeli technology companies are Mangrove Capital Partners, Entrée Capital, Viola Ventures, Pitango and MizMaa, according to the Journal.

Eisenberg stuck with WeWork in the shared-office space business even as other investors pulled out when a planned IPO was scrapped in October 2019. That sent the company’s market valuation plummeting from $47 billion to $8 billion and forced CEO Adam Neumann to resign. Neumann, a former Israeli Navy officer who acquired U.S. citizenship, raised billions of dollars from Japan’s Softbank Vision Fund, whose primary investors were Mubadala and the $600 billion Saudi Arabia’s Public Investment Fund. WeWork finally went public through a SPAC merger in October 2021 and is currently worth roughly $4.5 billion, down 18 percent since the end of last year.

“Very few people could have transformed the real estate market the way he did and if you walk into any office now, they’re all designed like WeWork,” Eisenberg said, noting that the company sells $3 billion in services annually. “You know, it takes a little bit of crazy to be an entrepreneur and be told ‘no’ all the time and be abused by the press all the time. And you know, God bless [Neumann] and God bless [new CEO] Sandeep Mathrani for taking it over.”

Eisenberg, an Orthodox Jew and Yeshiva University graduate who covers his head with a yarmulke and lives in Jerusalem, has eight children and writes books in Hebrew applying biblical wisdom to investing. His The Tree of Life and Prosperity: 21^st Century Business Principles from the Book of Genesis was published in English last year. His latest book, Milk, Honey and Uncertainty, hasn’t yet come out in translation. He said regular visits to the Gulf has given him a better appreciation of Islam and reinforced the belief he describes in his books as “respectful tribalism.”

Besides Freightos, Aleph’s interests include Windward, a favorite of risk managers that uses online mapping and artificial intelligence to track maritime traffic around the world. It trades on the London Stock Exchange and Eisenberg says the company has benefited from the global breakdown in shipping logistics.

“Business is good because whenever there are sanctions, you want to know what’s really happening on the seas,” he said. “Not just that, but at the same time we’ve had these COVID-19 lockdowns in China and the supply chain is all snarled up. People want to know, where are my goods?”

Other standouts in Eisenberg’s portfolio include empathy.com, an online platform that helps relatives handle the details of death, such as dealing with probate court, funeral arrangements and settling finances. Healthy.io, which developed a telemedicine app that enables patients with chronic kidney failure to take a urine test at home and deliver the data to a lab by smartphone for analysis, is another Aleph investment.

For Israel, much of the value of normalization with the Gulf is its geographical position and longtime experience as a platform to reach the most dynamic nations and business centers in Southeast Asia, including India and Indonesia, Eisenberg said.

“This whole Eastern Rim opens up to Israel via the Emirates, and it’s going to be very meaningful because Asia is ascendant,” Eisenberg said. “I think you’re going to see alignment between the ascendant nations going forward. Israel and the Emirates are a big part of that.”

free style

Saudis positioning for next move as Israel, UAE sign free-trade pact, Emirati VC chief says

Trade agreement signed by Cabinet ministers in Dubai eliminates customs duty on 96% of goods traded between Israel and the Emirates, giving stimulus to business deals after Abraham Accords

GPO

Israeli Minister of Economy and Industry Orna Barbivai and Emirati Minister of State for Foreign Trade Thani Al Zeyoudi

By

Jonathan H. Ferziger

May 31, 2022

The free-trade agreement signed yesterday between the United Arab Emirates and Israel is generating interest among investors in Saudi Arabia who are patiently making plans for the possibility their own government will soon normalize relations with the Israelis, an Emirati venture capitalist said.

“I would expect that Saudi businessmen are just going to watch, learn and try to position themselves for if and when anything opens up” with Israel, said Sabah al-Binali, executive chairman of OurCrowd Arabia, a UAE-based unit of Israel’s OurCrowd venture capital platform.

Al-Binali spoke to reporters following a ceremony yesterday in Dubai in which Israeli Minister of Economy and Industry Orna Barbivai and Emirati Minister of State for Foreign Trade Thani Al Zeyoudi signed the agreement. Some 96 percent of goods traded between the two countries, including food, agricultural products, cosmetics, medications and medical equipment, will be exempt from customs duty under the pact.

The effort to tear down trade barriers between Israel and the UAE comes nearly two years after the two nations and the Gulf state of Bahrain signed the U.S.-brokered Abraham Accords, normalizing relations between the former Middle East adversaries. U.S. President Joe Biden is preparing a visit to the Jewish state in late June amid indications that his administration is pressing the Saudis to allow more open business relations with Israel.

Those include a report in the Israeli business publication Globes that dozens of Israeli executives have been allowed to enter Saudi Arabia recently using their Israeli passports, instead of being required to use second passports from other countries, as has long been the practice. Two senior Biden administration officials, meanwhile, traveled to Riyadh last month to discuss a possible agreement between Israel, Saudi Arabia and Egypt that would increase oil production in the region, according to Axios. The White House is also pressing for an agreement finalizing the transfer of two Red Sea islands from Egyptian to Saudi sovereignty, which would facilitate the oil deal.

As Arabs and Israelis grow more comfortable with each other, Al-Binali said it’s time to start work on a more comprehensive regional framework for the holdouts to the Abraham Accords: Saudi Arabia, Kuwait, Qatar and Oman. The pact signed in Dubai covers regulatory enforcement, customs regulations, government procurement, protection of intellectual property rights and e-commerce.

“It’s one thing to go do six bilateral free-trade agreements,” Al-Binali said in the discussion with reporters by Zoom. “The interesting question is can Israel end up at some point in the future doing a single, bilateral, free-trade agreement with the GCC [Gulf Cooperation Council] itself? Let’s not forget that the GCC is its own economic and political bloc.”

Trade between the UAE and Israel is expected to reach $5 billion in the “upcoming few years,” Al Zeyoudi said last week at the World Economic Forum in Davos, Switzerland. He said trade volume between the two countries since the Abraham Accords were signed has already exceeded $2.5 billion and will probably exceed $2 billion in 2022.

A private-equity fund run by Jared Kushner, the son-in-law of former President Donald Trump who led negotiations on the Abraham Accords, has arranged a deal to invest millions of dollars from Saudi Arabia’s sovereign wealth fund in Israeli startups, the Wall Street Journal reported last month. Jerusalem-based OurCrowd, which invests in some 340 companies through its crowdfunding platform and is the first Israeli venture capital firm licensed in the UAE through the Abu Dhabi Global Market, hired Al-Binali to run its operations in the Gulf.

Al-Binali minimized concern that the UAE might retreat from its growing ties with Israel because of recurring friction with the Palestinians, including clashes in East Jerusalem and the death of Al Jazeera reporter Shireen Abu Akleh during a firefight between Israeli soldiers and Palestinian gunmen in the West Bank city of Jenin.

“The Emirati culture is one that, yes, you can sit there and say we don’t like this or we like that and so on, but you know, we stay on course,” Al-Binali said, noting that the relationship was already “stress-tested” by the Israel-Hamas missile battles in Gaza in May 2021. Emiratis “spend a lot of time thinking about these things, and I believe that we will see a lot of resilience.”

👋 Good Monday morning in the Middle East!

Here comes Air Force One: As President Joe Biden prepares to visit Israel toward the end of June, reports that Israeli business executives have been finding their way to Saudi Arabia are fueling speculation that the U.S. leader may also touch down there and push the kingdom to join other Gulf states that have normalized relations with the Jewish state.

Israelis in Riyadh: In an indication that business ties often warm up before diplomatic relations are consummated, Globes reported that dozens of Israeli executives have been allowed to enter Saudi Arabia recently on their Israeli passports. That’s a break from previous Saudi practice of admitting only those Israelis who hold passports from second countries. The Israelis even came out of Riyadh with signed contracts, according to Globes, including two multimillion-dollar deals for water-saving systems tailored to desert agriculture.

Dynamic Duo: The Saudi-Israel waltz choreographed by the White House apparently doesn’t stop in Washington. The Biden administration’s Middle East coordinator, Brett McGurk, and special envoy for international energy affairs, Amos Hochstein, were in the kingdom in May to discuss a possible agreement between Israel, Saudi Arabia and Egypt that would increase oil production in the region, according to Axios. To clinch a deal, the White House is pressing for an agreement finalizing the transfer of two Red Sea islands from Egyptian to Saudi sovereignty.

Rising Volume: Even without the Saudis on board, Emirati-Israel trade volume is expected to reach $5 billion in the next few years. In one major development, Israel Aerospace Industries participated for the first time at the Global Aerospace Summit in Abu Dhabi. Morocco is also promoting business with Israel, as The Circuitreported from Casablanca last week, where government ministers said they want to give their own country a dose of Israel’s start-up culture.

Welcome to The Weekly Circuit, where we cover the Middle East and North Africa through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please write us at [email protected] to say what you like and what we can improve. Story tips are welcome.

Looking east

Gulf-Israel investors can weather political discord by cultivating personal ties, Aleph’s Eisenberg says

In another debut for Israel stemming from the Abraham Accords, the country’s leading aviation manufacturer — Israel Aerospace Industries (IAI) — participated in a major industry conference last week in the United Arab Emirates, The Circuit’s Rebecca Anne Proctor reports from Abu Dhabi.

Breaking Ground: The three-day Global Aerospace Summit covered topics ranging from aviation and space travel to cybersecurity and innovation. It brought together more than 1,000 senior executives from the aerospace and defense sectors in countries around the world that are eager to foster global collaboration and partnerships. The presence of IAI, which produces aerial and aeronautic systems for both military and civilian use, broke new ground for Israel nearly two years after it signed normalization agreements with the UAE and several other Arab nations.

Mideast Leader: “What is important is that we are in the UAE and this summit is a semi-historical event for us because we are attending it for the first time ever,” Sharon Biton, IAI’s vice president of marketing for the Middle East and North Africa, told The Circuit.

Drones, Missiles, Avionics: A leader in both the defense and commercial markets delivering state-of-the-art technologies in air, space, naval, cyber and homeland defense, IAI is fully owned by the Israeli government. It designs, produces, develops and maintains civil aircraft, drones, fighter aircraft, missile, avionics and space-based systems. In 2021, IAI reported annual sales of approximately $4.5 billion with an order backlog of $13.4 billion.

Start-Ups and Defense: In a panel on R&D investments, Eytan Eshel, IAI’s chief technology officer, stressed the company’s work as a bridge. “IAI’s Innovation Center is a prime example of bringing together start-ups and the defense ecosystem to develop new, unique solutions,” he said.

Forging Ties: Jacob Rozmann, vice president and general manager of Lahav Aerostructures in IAI’s Aviation Group, emphasized the importance of forging ties between Israel and its Arab neighbors. “Regional cooperation for transforming supply chains will result in quicker shipment, lower costs and a stronger industry network,” Rozmann said.

Read more here.

Circuit Interview

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

As Sudan’s relations with Israel remain in limbo following a military coup in the East African nation last year, the State Department is urging Israel not to proceed with normalization until a civilian-led government is restored in Sudan, Jewish Insider’s Gabby Deutch reports. Sudan signed onto the Abraham Accords in January 2021, during a brief period of relative stability between a 2019 uprising that saw Omar al Bashir, the dictator who ruled the country for 30 years, wrested from power and last year’s coup that led to military control of Sudan.

Strong words: “We strongly encourage the State of Israel to join us and the broader international community in vocally pressing for Sudan’s military leaders to cede power to a credible, civilian-led transitional government,” a State Department spokesperson told JI. Israel has not condemned the coup, which was followed by a violent crackdown against protestors, despite repeated entreaties from the U.S. government. An Israeli military delegation that visited Sudan just before the coup has reportedly stayed in contact with the Sudanese military.

Put on pause: Additionally, the U.S. “will not resume currently paused assistance to the Sudanese government until a credible civilian government is in place,” the State Department spokesperson said of promised financial and debt-related assistance, including “assistance originally committed to Sudan’s civilian-led transitional government in connection with its efforts to improve Sudan’s bilateral relationship with Israel.”

Hindsight: “There was an interest in getting as many countries as possible, as quickly as possible,” Victoria Coates, who worked on Middle East politics first at the National Security Council and then at the Department of Energy in the Trump administration, said of the Abraham Accords. “But in hindsight, that was probably a bridge too far, just for where [Sudan] was in its development.”

Read more here.

Circuit Chatter

Raising the Volume: Trade between the UAE and Israel is likely to reach $5 billion over the next few years, Emirati Minister of State for Foreign Trade Thani Ahmed Al Zeyoudi predicted at the World Economic Forum in Davos. He said trade volume will exceed $2 billion in 2022 and 1,000 Israeli companies will be operating in his country by year’s end.

Renewable Mideast: In other Davos news, Israeli President Isaac Herzog told the WEF that the Middle East should be “a global hub of sustainable solutions in food, water and health” and “a source of energy, mostly solar energy, to Europe, Asia and Africa.”

Egypt Needs Bread: Egypt is scrambling to find new sources of wheat to replace Russia and Ukraine, which collectively supplied 80 percent of its supply before the current conflict.

Lebanese Woes: Lebanon’s currency hit a new low after its May 15 election showed no clear majority for any faction, leaving the parliament divided between pro- and anti-Hezbollah legislators.

It’s a Gas: The European Union is working on a deal with Israel and Egypt that would see Israeli gas processed in Egypt and shipped to ports in Europe, as part of a larger effort to reduce European reliance on Russian supplies.

Clipped Wings: Responding to public criticism, Israel mothballed the Boeing 767 jetliner it renovated at a cost of $241 million for use by the prime minister and president.

Closing Circuit

Neumann’s Goddess: Crypto startup FlowCarbon, which counts Israeli-American WeWork founder Adam Neumann as an investor, announced it raised $70 million. It closed on a $32 million venture capital round led by Andreesen Horowitz and raised another $38 million in a private presale of the company’s Goddess Nature Token.

Hiltons Galore: Hilton Hotels & Resorts plans to operate 59 more hotels in Saudi Arabia over the next 10 years, more than tripling the current number.

Koch Raises Funds: NeuraLight, an Israeli startup that uses smartphones to measure the progression of neurological disorders such as Parkinson’s disease, raised $25 million in a Series A funding round led by Koch Disruptive Technologies.

Soccer Flights: The CEOs of five Gulf airlines said they will add 160 daily flights to Qatar in November so that ticket holders can attend World Cup soccer matches.

Get a Job: Ogram, a UAE-based digital platform to help businesses hire staff,raised $3 million in a Series A funding round led by Modus Capital and Aditum Investment Management.

Financial Disruptor: Israel’s Viola Credit announced the closing of a $700 million fund to provide credit lines to fintech companies that disrupt traditional lending sectors.

Miami-bound: El Al Israel Airlines will move its U.S. headquarters from New York to a building in Miami owned by controlling shareholder Kenny Rozenberg, saying the shift will save $500,000 a year.

On the Circuit

Avi Gabbay: Israeli mobile phone company Partner Communications named Avi Gabbay as its new CEO. Gabbay, who fought a losing bid for prime minister as head of Israel’s Labor Party, was previously CEO of Israeli telecoms Bezeq and Cellcom.

Majida Alazazi: The chairwoman of M Glory Holding Group, Majida Alazazi, said that by the end of June the company expects to launch the first electric car made in the UAE.

Safra Catz: The Israeli-born CEO of Oracle, Safra Catz, met with Emirati officials, business executives and a visiting delegation of Jewish leaders while in the UAE, talking about technology, start-up companies, artificial intelligence and the Abraham Accords.

Ahead on the Circuit

May 29-June 1, Tel Aviv and Jerusalem: 2022 Forbes Under 30 Summit EMEA. A gathering of young leaders from across Europe, the Middle East and Africa in the fields of business, art and philanthropy.

May 31-June 1, Dubai: Seamless Middle East 2022 conference focuses on e-commerce, retail, payments, identity and fintech. Dubai World Trade Centre.

May 31-June 2, Abu Dhabi: 7th Ports Authorities Roundtable brings senior executives from major commercial ports around the world, sponsored by AD Ports Group. Four Seasons Hotel, Maryah Island.

June 1, Tel Aviv: Silicon Valley Comes to Tel Aviv conference, featuring partners from VCs Andreessen Horowitz, Coatue Management and Spark Capital. Sponsored by Ventura Partners. Tel Aviv Stock Exchange.

June 20-22, Doha, Qatar: Qatar Economic Forum, sponsored by Bloomberg, focuses on new Middle East frontiers for technology. Ritz-Carlton, Doha.

Circuit Culture

Celebrating Israel in Bahrain: Hundreds of people turned out for an Israel Independence Day party hosted by Israel’s new embassy in Bahrain. The event, which was the first time the Israeli government held a large-scale celebration for the national holiday in a Gulf Arab nation, drew government officials and business executives from both countries, according to the embassy. Headlining the affair was singer and “Fauda” star Tsahi Halevi. Bahrain’s Interior Ministry band played the Israeli and Bahraini national anthems at the party, which was catered by Israeli chef Doron Sasson. Israel’s ambassador to Bahrain, Eitan Na’eh, said the event demonstrated “the authentic, warm and genuine relationship” that has developed between the two countries since they signed the Abraham Accords in September 2020.

Saudi Arts Complex: Construction has begun on a massive Royal Arts Complex in the Saudi capital of Riyadh. The 125-acre project, located in the city’s King Salman Park, will include a 2,300-seat capacity National Theatre, a 330-foot-high Museum of World Cultures and the Royal Institute of Traditional Arts. In its sculpture pavilion, the complex will have three cinemas, two theaters and a library devoted to art and culture holding a collection of more than 250,000 books.

All that Glitters: Warner Music Group announced the launch of Warner Music Israel in Tel Aviv, which will promote both the New York-based entertainment company’s international stars and popular Israeli artists such as Noga Erez and Noa Kirel.

Weekly Circuit

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CIRCUIT INTERVIEW

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GULF ENCOUNTER

An Emirati ‘majlis’ spreads out on the National Mall in Washington

WORLD CUP WARM-UP

Musk, oil prices, soccer dominate stage at Qatar Economic Forum

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