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Weekly Circuit

Biden heads to Middle East + Saudi art show examines impact of change

AFP via Getty Images

AFP via Getty Images

On previous visit as vice president in 2011, Joe Biden greeted by Saudi offiicials on landing in Riyadh

By
Jonathan H. Ferziger
July 11, 2022

👋 Good Monday morning in the Middle East!

President Joe Biden heads to the region this week with a series of objectives that include bringing down gas prices and pushing forward Israel’s integration into the region. Unlike his predecessor, former President Donald Trump, whose first foreign trip started in Saudi Arabia, Biden waited a year and a half to visit, having pledged during the campaign season to make the Gulf kingdom a “pariah” for the murder of dissident journalist Jamal Khashoggi. With energy costs soaring around the world in the wake of the Russia-Ukraine conflict, Biden acknowledges that he doesn’t have much choice. Writing on Sunday in The Washington Post, the U.S. leader said his intention is “to reorient — but not rupture — relations with a country that’s been a strategic partner for 80 years.”

Before he makes the flight on Air Force One to the Saudi port city of Jeddah, Biden will spend three days in Israel, where he may have a surprise or two in store connected to the Trump-brokered Abraham Accords. Israeli investors tell The Circuit they see increasing signs that Saudi Arabia could soon take some initial steps to normalize relations with the Jewish state. That may not happen officially while Biden is in the region, but those who have been plying the Gulf-Israel channel for years say the buzz is getting louder. And while public declarations may not come immediately, both sides acknowledge that lots of commercial activity is going on quietly between Israelis and Saudis.

With business in the Gulf at a lull for the Eid al-Adha holiday this week, Rebecca Ann Proctor takes a journey to eastern Saudi Arabia, where Ithra, the King Abdulaziz Center for World Culture, is mounting a show that examines the impact of change on some of the most beloved places of 28 artists. Among the works are prayer-filled walls in downtown Jeddah, watercolors from the Gaza Strip and a lone tree in Baghdad.

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].

Eid Mubarak!

MIDEAST JOURNEY

Biden trip kindles Israeli hopes for broadening business connections with Saudi Arabia

President Joe Biden’s visit to the Middle East this week is raising expectations that he will coax some gestures from Saudi Arabia that will bring the kingdom closer to open business ties with Israel, The Circuit’s Jonathan Ferziger reports. Though U.S. officials have indicated that an official extension of the Abraham Accords to include Riyadh won’t occur on this trip, Biden’s itinerary, which includes a direct flight from Tel Aviv to the Saudi port city of Jeddah, is too tantalizing for Israelis to treat casually.

Fear of missing out: “They see that there’s something brewing,” said Tally Zingher, managing director of Blue Laurel, a Middle East strategic advisory firm. With the Biden trip shining a spotlight on Saudi Arabia, Zingher said, people are approaching her for guidance and saying, “We want to be in, we don’t want to miss this.”

No longer a pariah: Biden is scheduled to arrive on Wednesday at Israel’s Ben Gurion International Airport, where he will be greeted by newly installed Prime Minister Yair Lapid. The three-day visit will also include a brief trip to the West Bank for a meeting with Palestinian Authority President Mahmoud Abbas. On Friday, Biden flies across the Red Sea to Jeddah, where the next day he will meet leaders of the Gulf Cooperation Council at the “GCC+3” summit. While the meeting will focus on Biden’s efforts to bring down oil prices, it will also be where he meets with Crown Prince Mohammed, known as MBS.

Overcoming reservations: The president’s Mideast trip comes nearly two years after the United Arab Emirates and Kingdom of Bahrain signed the U.S.-brokered Accords with Israel. The deal’s success bolsters the argument that normalizing ties could also be useful for Saudi Arabia, the Middle East’s biggest economy, analysts say, but probably not enough yet to overcome the preferences that the Saudi Royal Court retains in keeping relations with Israel unofficial and under the radar. Saudi leaders acknowledge their interest in developing closer ties with Israel but have said no formal agreement will be signed until a resolution to the Israeli-Palestinian conflict is reached. “There clearly are moves that will happen,” said Ghanem Nuseibeh, a political risk consultant and co-founder of Cornerstone Global Associates, which has offices in London and Dubai. “The question is how much will be public and how much behind the scenes.”

No more make-believe: Though Saudi-Israeli connections are likely to remain low-key for at least the coming months after Biden’s visit, those involved say business relations between the two countries have changed dramatically since just a few years ago, when contacts were disguised through second passports and shell companies. “It used to be, OK, pretend to be American, pretend to be British, pretend to be this or that,” said Shmuel Bar, chief executive of IntuView, an Israeli company that has in the past acknowledged selling its sentiment-analysis software to Saudi customers. “That’s no longer the case. When you talk to them, it’s not, ‘let’s play make-believe.’”

Read the full story here.

Circuit Chatter

Top in Tech: The UAE unveiled a package of incentives aimed at attracting 300 top global technology firms to set up operations in the country.

Ice Cream Wars: Ben & Jerry’s sued its parent Unilever to block the sale of its Israeli business to a local licensee, saying the sale was inconsistent with its values to sell ice cream in what Ben & Jerry’s called “Occupied Palestinian Territory.”

Suez Unstuck: The Suez Canal’s annual revenue rose 20 percent in the 2021-2022 fiscal year to $7 billion, its highest ever.

Crypto Cuts: Israeli-American cryptocurrency platform Celsius laid off 150 employees after halting withdrawals on June 13 in a move that triggered a worldwide sell-off of digital currencies.

Non-Fungible Planes: Etihad Airways will sell non-fungible tokens (NFTs) based on the models it flies of the Boeing 787 Dreamliner aircraft, each NFT priced at $349 plus tax.

Halal Economy: UAE Economy Minister Abdulla Al Marri said new trade pacts with Indonesia and India, two of the most populous nations, will be a boon to the halal foods market that serves the world’s 2.5 billion Muslims.

Tax Shelter: The U.S. is investigating how Perrigo, one of the largest makers of non-prescription drugs, used Israel as a tax shelter and switched accounting firms to engineer the arrangement.

Closing Circuit

Swedish Buses: Volvo Group is investing in Israel’s Optibus to help accelerate deployment of its electric buses in 85 countries.

Seventh-Biggest Bank: Kuwait Finance House agreed to fully acquire Ahli United Bank for $11.6 billion, creating the Gulf’s seventh-largest lender, worth $115 billion.

Catching Bad Data: IBM acquired Israel’s Databand.ai, paying a reported $150 million for the company, which enables users to catch “bad data” through its artificial intelligence software.

Colostrum Extraction: Israel’s Maolac, which extracts proteins from bovine colostrum to use as a food ingredient, raised $3.2 million in a funding round led by OurCrowd.

Nasdaq Awaits: Israeli cybersecurity HUB Security plans to delist from the Tel Aviv Stock Exchange ahead of its SPAC merger, which will enable the company to sell shares on the Nasdaq.

Cutting Back: Israeli online trading platform eToro said it is laying off 6% of its workforce after dropping a SPAC merger that would have brought it to the Nasdaq.

Seed Fund: Israel’s F2 Venture Capital closed its third seed fund of $150 million for Israeli companies, as well as a $100 million fund for those already in its portfolio.

Hackers Beware: Apple plans to release a new “Lockdown Mode” for its iPhones, iPads and Macs that it says can stop hackers who use NSO’s Pegasus application. Israeli security firm Cirotta, meanwhile, has introduced a smartphone case that employs a non-software solution to stop intruders.

On the Circuit

Mohammad Barkindo: The secretary general of the Organization of Petroleum Exporting Countries died on July 6 at 63. He will be succeeded by Kuwait’s Haitham Al-Ghais.

Rajeev Misra: The head of SoftBank’s venture capital unit will play a reduced role in the Japanese investment giant and lead a new $6 billion fund backed by Abu Dhabi sovereign wealth funds.

Doron Cohen: The chief executive of Israeli holding company Discount Investment Corp. Ltd. said he plans to step down and bid with a group of investors for control of Cellcom, Israel’s largest mobile phone company.

Ahead on the Circuit

July 14-28, Israel: The 2022 Maccabiah Games. The athletic tournament, now in its 21st year, draws Jewish athletes from some 60 countries for competition in sports ranging from track and gymnastics to soccer and ice hockey. Opening ceremony in Jerusalem with events at various sites across Israel.

July 17, Lebanon: The annual Baalbeck International Festival’s final night features a performance by pianist Simon Ghraichy, dancer Rana Gorgani and digital composer Jacopo Baboni Schilingi.

July 19, Israel: Nazareth Conference on Arab Society in Israel. Bank of Israel Governor Amir Yaron appears with Arab business and government leaders. Golden Crown Hotel, Nazareth.

Circuit Culture

DISCOVERING ITHRA

Saudi art show examines impact of places and change

Cracks in the wall: Brick fragments and pieces of coral, stone and wood are held loosely together to form a wall. Slips of paper containing prayers and Islamic texts sprout from the cracks. Created out of construction rubble from Jeddah’s historic district of Al-Balad, the work by Saudi artist Asma Bahmim titled “Wandering Walls” is an ode to her birthplace. As the port city’s streets are being torn up in a $20 billion government-financed urban facelift, Bahmim’s piece recalls her growing up there with an aunt who filled their home with her scribbled supplications.

Works by 28 artists: Bahmim’s work is part of “Amakin,” an exhibition featuring works by 28 artists from Saudi Arabia and around the world, taking inspiration from the idea of “place,” or makan, in Arabic, as Rebecca Anne Proctor reports in The Circuit. Organized by Venetia Porter, curator of Islamic and Contemporary Middle Eastern art at the British Museum, the exhibition runs through Sept. 30 at Ithra, the King Abdulaziz Center for World Culture, which was built by the state-owned oil company Saudi Aramco in the eastern city of Dhahran.

Emotional connection: The works on display, which range from paintings and collages to sculptures and film, document places from a variety of locations that carry emotional connections for each artist. “They interface between art and documentation,” Porter told The Circuit during a visit to Ithra. “There’s a strong Iraqi-Saudi connection in the show, but then I also wanted to bring in the work of Pakistani artists — their makan is further away but connected.”

Weekly Circuit

Israeli tech workers look for jobs + Emirati minister expects new Abraham Accords members

Ilan Shacham/Getty Images

Business towers filled with Israeli start-ups frame the night landscape in south Tel Aviv

By
Jonathan H. Ferziger
July 4, 2022

👋 Good Monday morning in the Middle East!

Investors are looking for a silver lining to the grim announcements coming almost daily that Israeli start-ups are being forced to trim their costs and lay off staff. Some see the reductions as an inevitable correction to the financial exuberance that characterized the past two years of record fundraising, as The Weekly Circuit’s lead story points out below. Others expect a long-term contraction, spurred by the global economic slowdown, the rise in energy prices unleashed by the Russia-Ukraine conflict and the technology slide on Wall Street.

Even as VC money is tougher to raise for tech start-ups in Israel, Emirati leaders are increasingly bullish on the Abraham Accords. With more than $1 billion in trade recorded between Israel and the UAE during the first quarter of 2022, the Gulf state’s foreign trade minister, Thani Al Zeyoudi, told a Washington audience last week that he’s confident more countries in the region will soon be normalizing ties with the Jewish state. In Israel, Naftali Bennett spent one of his last days as prime minister at a cybersecurity conference on the Tel Aviv University campus, where he joined politicians, CEOs and academics from around the world to discuss cooperation against digital threats.

Israel starts the week with a new leader as Yair Lapid, who was a TV talk show host and amateur boxer before entering politics, took over as interim prime minister from Bennett. Lapid, 58, who leads the Yesh Atid (There is a Future) party, is expected to hold the office for four months after which Israel will hold national elections. The new premier will be on the tarmac at Ben Gurion International Airport next week to greet President Joe Biden when he makes his first trip to the region, taking him to Israel and Saudi Arabia.

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].

STAYING ALIVE

Cash tightens for free-spending Israeli start-ups, ushering in new era of job cuts

Israel’s tech workers are polishing their LinkedIn profiles. The trend toward tougher times is clear with fundraising for Israeli companies in the second quarter of 2022 down 31% from the same period last year, according to a survey by Greenberg Partners. And as the money disappears, The Circuit’s Robert Lakin found, so go the jobs. 

One After Another: Just this week comes news that cybersecurity outfit Snyk plans to lay off 30 employees after a September 2021 investment round that raised $530 million. StreamElements, which helps users draw revenue from streaming video, cut 20% of its staff last week, less than a year after Softbank led a $100 million investment round for the company. Alibaba, the Chinese e-commerce juggernaut, told employees it plans to shut its Tel Aviv R&D center, leaving 40 people looking for work.

Another Bust?: The frequency and intensity of the news stories could have you wondering if the Start-Up Nation is facing a new version of the dot-com bust of 20 years ago? Not so fast, industry insiders say.

Keeping Cautious: In the most recent survey by OurCrowd, a Jerusalem-based venture capital funding platform, some 48% of the businesses polled reported “cautious hiring plans” for the balance of 2022, higher than earlier this year. More said they planned to freeze bringing on new employees. At the same time, many of those affected by layoffs at Israeli companies are, in fact, employed overseas or they don’t hold coveted roles in development and engineering. 

Talented Engineers: When they have those jobs, employees being laid off are still likely to find other companies seeking their talent, analysts say. There are still far more open positions today than available employees, especially in technical talent areas like engineering and data science, where Israel is considered strong. The shrinking market  may also reduce wage inflation, which could  lead more companies to hire locally rather than offshore to Europe or India.

Read the full story here.

Part of the club

More countries will soon join Abraham Accords, Emirati trade minister says

Almost two years after the United Arab Emirates and Bahrain signed the Abraham Accords — followed months later by Morocco and Sudan –— an Emirati cabinet minister said he expects additional nations will soon establish ties with Israel.

Great Expectations: “The expectation is high that many countries are going to join,” Thani Al Zeyoudi, the UAE’s minister of state for foreign trade, said at a June 28 meeting organized by the Abraham Accords Peace Institute. While he refrained from naming which ones, Al Zeyoudi said they would come “from the region and Islamic countries that don’t have relations with Israel.”

Biden Prelude: Al Zeyoudi spoke in Washington less than a month before President Joe Biden travels to the Middle East, where he will visit Israel and meet leaders of the Gulf states at a gathering in Saudi Arabia. Trade between the United Arab Emirates and Israel is accelerating and will probably exceed $4 billion for 2022, according to Al Zeyoudi.

Building Momentum: “The numbers are growing,” he said during the discussion, which was recorded and posted on YouTube. “The numbers are going to show that we’re going in the right direction, and I’m sure that with this momentum, many things are going to be harvested very soon.”

Free Trade: Even before signing a free-trade agreement in May, economic activity between the UAE and Israel reached $1 billion in the first quarter of 2022, Al Zeyoudi said. Besides Israel, the UAE has also signed a Comprehensive Economic Partnership Agreement (CEPA) this year with both India and Indonesia. It is negotiating similar pacts with South Korea, Ethiopia, Kenya, and Turkey.

Watch the recorded meeting here.

MIDEAST JOURNEY

Biden trip kindles Israeli hopes for broadening business connections with Saudi Arabia

International cybersecurity experts from business and government converged on Tel Aviv University last week to share ideas and strategies for combating digital crime.

Stop Cyber-Pandemic: Among the leaders in the field appearing at “Cyber Week 2022” was Gil Shwed, founder and CEO of Israel’s Check Point Software Technologies, who said the key goal is developing means for “preventing the next cyber pandemic.” The entire world is vulnerable because “very sophisticated tools for attacks on nation-states are available as a commodity to every hacker with Wi-Fi,” he said.

Paying a Price: Headlining the opening June 28 session was Israeli Prime Minister Naftali Bennett, who stepped down two days later as his governing coalition collapsed and started preparing for new elections. Bennett, a cybersecurity company founder himself in a previous career, used the podium to address Iran, saying the Islamic Republic will “pay a price” if it attacks Israel’s digital infrastructure.

Keyboard Combat: “We can get stuff done hitting an enemy through cyber,” Bennett said. “Before we needed to send 50 to 100 commandos behind enemy lines with huge risks. Now we get a bunch of smart folks together sitting at a keyboard and achieve the same effect.”

Malign Actors: Representing the White House was Anne Neuberger, deputy national security advisor for cyber and emerging technologies, who told the Tel Aviv conference that the use of cyber attacks in Russia’s assault on Ukraine requires an international response. “We’re using the full range of our capabilities in concert with allies to impose costs on malign actors for their actions in cyberspace, much as we would in the physical world,” she said

Circuit Chatter

Return of Ben & Jerry’s: Unilever, the parent company of Ben & Jerry’s, reached an agreement with the Israel-based manufacturer of the ice cream products, American Quality Products Ltd., to continue selling in Israel and the West Bank. Ben & Jerry’s announced in July 2021 that it would cease sales of its products in what it referred to as “Occupied Palestinian Territory,” triggering several states with laws prohibiting the boycott of Israeli products to announce they would divest from Unilever.

Hedge Magnet: Dubai is becoming more attractive to hedge fund managers, according to Bloomberg, which reports Izzy Englander’s Millennium Management and Michael Gelband’s ExodusPoint Capital Management are among those bolstering their offices in the UAE.

Hajj Glitch: Thousands of Muslims planning to make the hajj pilgrimage to Mecca were bumped from flights because of glitches in Saudi Arabia’s new Motawif web portal through which all reservations must be processed.

Apple’s Palestinian Hub: Apple said it will expand its engineering R&D hub in the Palestinian city of Rawabi in the West Bank, which currently employs some 60 engineers.

OPEC Soars: Oil revenue for the 13-member Organization of Petroleum-Exporting Countries rose 77% in 2021 to $561 billion, with higher demand as prices rebounded from the COVID-19 slowdown.

Free Mickey: Disney+ and Israel’s satellite broadcaster Yes canceled an exclusivity agreement, opening the streaming service to competitors in the country.

Speedy Delivery: Amazon opened a new delivery station in Abu Dhabi, enabling the world’s biggest online retailer to offer same-day service throughout the city.

Indonesian Trade: The UAE signed a free-trade agreement with Indonesia, aiming to boost annual business volume between the Gulf state and Southeast Asia’s biggest economy to $10 billion within five years.

Closing Circuit

Kushner Invests: Affinity Partners, the private equity firm formed by former President Donald Trump’s son-in-law Jared Kushner that reportedly raised money from Saudi Arabia to finance Israeli startups, has agreed to invest in Mosaic, an Oakland, Calif.-based company that provides loans for residential solar installations, according to Axios.

Canine Detection: SpotItEarly, an Israeli startup that trains dogs to detect cancers through scent, raised $6.2 million in a seed round led by Hanaco Ventures.

Egyptian Cargo: Abu Dhabi’s AD Ports will acquire a 70% stake in Egypt’s International Associated Cargo Carrier for about $140 million.

Send Cash: Dubai-based YAP, a digital banking platform operating in the Middle East, Africa, and South Asia, raised $41 million in a funding round that included participation by Saudi Arabia’s Aljazira Capital, Abu Dawood Group and Astra Group.

Online Casinos: Private equity firm Joffre Capital bought a 25.7% stake in Israeli online gambling company Playtika from Chinese shareholders for $2.2 billion.

No Milk Today: Saudi Prince Khaled bin Alwaleed’s KBW Ventures joined a $40 million fundraising round for Eclipse Foods, a U.S. maker of plant-based dairy alternatives.

Risky Business: XM Cyber, which has former Mossad director Tamir Pardo as a co-founder, will acquire Israel’s Cyber Observer to expand its risk management platform.

Keeping Cool: Strata, the aerospace unit of Abu Dhabi’s Mubadala Investment Co., signed an agreement with Germany companies Hyperganic and EOS to create an air-conditioning system it says will be the world’s most efficient.

On the Circuit

Khalid Al-Falih, the Saudi minister of investment, met in Washington with U.S. company CEOs in preparation for President Joe Biden’s visit to Saudi Arabia in mid-July.

Albert Bourla, the CEO of Pfizer, was awarded the $1 million Genesis Prize in Jerusalem and said he would donate the money for a Holocaust museum being built in Thessaloniki, Greece, his birthplace.

Al Gore, the former U.S. vice president, is a co-founder of Generation Investment Management, which led a $90 million funding round for Gloat, an Israeli company that uses artificial intelligence to help employees advance their careers within large organizations where they work.

Ahead on the Circuit

July 5: Food Security: The UAE-Israel Business Council and the Gulf-Israel Policy Forum will host an event exploring regional business cooperation on the issue. The online discussion will take place at 3 p.m. Israel time, 4 p.m. in the UAE.

July 14-28: The 2022 Maccabiah Games. Athletic tournament held once every four years draws Jewish athletes from some 60 countries for competition in sports ranging from track and gymnastics to soccer and ice hockey. Opening ceremony in Jerusalem with events at various sites across Israel.

July 19: Nazareth Conference on Arab Society in Israel. Bank of Israel Governor Amir Yaron appears with Arab business and government leaders. Golden Crown Hotel, Nazareth, Israel.

Circuit Culture

Augmented Garden Party: An exhibition of augmented reality artwork by 13 artists, including Chinese dissident Ai Weiwei and Mohammed Gazem of the United Arab Emirates, will open simultaneously in September in Israel, the U.S., Britain, South Africa, Australia and Canada. The show was conceived by the Jerusalem Botanical Gardens and Outset Contemporary Art Fund, an international nonprofit group. Visitors to 13 public gardens in the six countries will be able to view the works on their smartphones or tablets through a downloadable app. Through their screens, they will see the augmented artwork as an overlay to the plants growing in the gardens.

Weekly Circuit

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

Entrée Capital Co-Founder Aviad Eyal

By
Jonathan H. Ferziger
June 27, 2022

👋 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].

STAYING ALIVE

Cash tightens for free-spending Israeli start-ups, ushering in new era of job cuts

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.

Part of the club

More countries will soon join Abraham Accords, Emirati trade minister says

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.

Circuit Chatter

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.

Weekly Circuit

Sorting through the crypto carnage + a glimmer of light from the EU-Israel-Egypt gas deal

Albatross via Getty Images

The Tamar drilling natural gas production platform is seen some 25 kilometers West of the Ashkelon shore in February 2013.

By
Jonathan H. Ferziger
June 20, 2022

👋 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].

STAYING ALIVE

Cash tightens for free-spending Israeli start-ups, ushering in new era of job cuts

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.

Part of the club

More countries will soon join Abraham Accords, Emirati trade minister says

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.

Circuit Chatter

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.

Weekly Circuit

Saudis, Israelis await Biden deal-making tour

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

👋 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.

STAYING ALIVE

Cash tightens for free-spending Israeli start-ups, ushering in new era of job cuts

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.

Part of the club

More countries will soon join Abraham Accords, Emirati trade minister says

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.

Circuit Chatter

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.”

Weekly Circuit

Record Abu Dhabi IPO continues Gulf stock market boom

By
Jonathan H. Ferziger
June 6, 2022

👋 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.

STAYING ALIVE

Cash tightens for free-spending Israeli start-ups, ushering in new era of job cuts

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.

Circuit Chatter

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.

LOOKING EAST

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

Tel Aviv-based VC fund and Qatar Airways are among the shareholders in the Freightos shipping rate marketplace, which will trade on Nasdaq

By
Jonathan H. Ferziger
June 5, 2022

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: 21st 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.”

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