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Saudi Arabia leading region’s transformative journey 

Saudi Arabia leading region’s transformative journey 
Saudi Venture Capital’s strategic initiatives have positioned Saudi Arabia as a leader in venture investments within the MENA region for the first time in 2023. (SPA)
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Updated 01 October 2024
Nour El-Shaeri
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Saudi Arabia leading region’s transformative journey 

Saudi Arabia leading region’s transformative journey 
  • SVC makes significant strides in shaping private investment landscape
Updated 01 October 2024
Nour El-Shaeri
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CAIRO: A wave of venture capital funding has washed over the Middle East and North Africa region, prompting transformative change in the entrepreneurial landscape.

Saudi Arabia’s government is leading the shift through a subsidiary of the SME Bank, part of the National Development Fund.  

The Kingdom’s Saudi Venture Capital has made significant strides in shaping the private investment landscape, deploying finance across 40 investment funds and over 700 startups and small and medium-sized enterprises.  

This was highlighted in the latest Impact Report issued by SVC, which detailed its contributions since its inception in 2018. 

The document revealed that SVC’s total investments have reached SR2.6 billion ($693.1 million), with the overall impact of these, including partner commitments, estimated at around SR13.6 billion.  

These investments span various sectors critical to economic diversification, such as e-commerce, fintech, healthcare, educational technologies, transportation, and logistics. 

“SVC plays a crucial part in stimulating the private VC investment to sustain and foster the steady growth of the VC ecosystem in the Kingdom,” Nabeel Koshak, CEO of SVC, said.  

“SVC’s strategy, since its inception in 2018, contributed to increasing the number of investors in Saudi startups, encouraging existing and new financial companies to establish VC funds, and motivating regional and global funds to invest in Saudi startups,” Koshak stated. 

“Accordingly, the funding deployed into Saudi Arabian startups grew 21 times to a record-high of $1.4 billion in 2023 versus $65 million in 2018, the year SVC was launched,” he added. 

Significantly, SVC’s strategic initiatives have positioned Saudi Arabia as a leader in venture investments within the MENA for the first time in 2023.  

This milestone reflects the broader economic and financial sector evolution under Saudi Vision 2030, aimed at enhancing the national economy. 

Saudi Arabia’s Penny Software closes undisclosed pre-series A round 

Closing its pre-series A funding round, Saudi Arabia’s Penny Software raised an undisclosed sum from Iliad Partners, joined by GSI and US-based Knollwood Investments, alongside existing investors such as Dallah Investment, Hambro Perks Oryx Fund, Class 5 Global, Altuwajiri family fund, and strategic angel investors.  

Founded in 2020 by Iyad Al-Dalooj, Majid Al-Dalooj, and Mohamad Ibrahim, Penny Software is a business to business Software-as-a-Service procurement startup that digitizes the entire source-to-pay process, thereby enhancing spend efficiency, governance, and compliance. 

“This investment from Iliad Partners, alongside the continued support from our existing and new investors, represents a significant vote of confidence in Penny Software’s vision and our team’s ability to execute,” Iyad Al-Dalooj, the CEO, said. 

“We are excited to leverage this partnership to scale our operations, enhance our product offering, and solidify our position as a leader in the procurement software industry. The future of procurement is here, and Penny Software is at the forefront of this transformation,” he added. 

This new capital infusion is poised to fuel Penny’s ambitions for regional and global expansion.  

This follows a successful $5 million seed funding round in 2021, led by Outliers Venture Capital with participation from Wamda, Shorooq Partners, Hambro Perks ORYX Fund, Class 5 Global, and strategic angel investors.  

Penny Software aims to leverage this investment to further enhance its platform capabilities and broaden its market reach, reinforcing its position in the competitive SaaS industry. 

The company claims that it is set to manage a gross transaction value of over $1 billion this year, and ease procurement for thousands of companies globally. 

“Saudi Arabia is an economy that is undergoing a major transformation in which technology is playing a key role. This is our first investment in the Kingdom, and we plan to invest a significant portion of our fund in this market, supporting strong founders on their journey from the pre-series A stage and onwards,” Christos Mastoras, founder and managing partner of Iliad Partners, stated   

UAE’s DocsInBox closes $500k in a funding round 

UAE’s e-invoicing and procurement startup DocsInBox closed a $500,000 funding round from angel investors to boost its presence. 

Founded by serial entrepreneurs Leonid Dovbenko and Stanislav Seleznev,  DocsInBox significantly streamlines invoicing and procurement processes, saving up to 1 million hours each month, the company claimed.  

The platform enables purchasing agents to place orders in just three clicks, while accountants can complete tasks in 13 seconds that previously took 300 seconds.  

By automating procurement, DocsInBox reduces manual labor by 15 percent, operational costs by 5 percent, and food costs by 8 percent.  

UAE’s U-topia secures $850k in funding round 

UAE-based Web3 services provider U-topia has secured $850,000 in funding from GDA Capital. 

Established in 2021 by Jérémy Mahieu and Nicolas Prévost, U-topia operates as a Web3 entertainment company that merges global intellectual property licensing in GameFi, artificial intelligence music, and video entertainment supported by non-fungible token provenance.  

The newly acquired investment is earmarked for the development of advanced features and technologies on the U-topia platform, aiming to enhance its offerings in the dynamic Web3 landscape. 

Nigeria’s VC firm Verod-Kepple Africa Ventures closes $60m fund 

Nigeria-based VC firm Verod-Kepple Africa Ventures has concluded a final close of $60 million for its pan-African VC fund, led by existing investors and new investors, including SCM Capital from Nigeria and institutional investors from Japan, including Taiyo Holdings and C2C Global Education Japan. 

Formed in 2021 as a joint venture between Kepple Africa Ventures and Verod Holdings, VKAV is led by partners Satoshi Shinada, Ryosuke Yamawaki, and Ory Okolloh. 

The fund aims to bridge the funding gap for African startups, especially for companies moving to series A and B stages. 

Egypt’s VC firm Beltone teams up with UAE’s CI Venture to manage a $30m fund 

Egypt’s Beltone Venture Capital, under Beltone Holding, has teamed up with CI Venture Capital from UAE’s Citadel International Holdings to manage a $30 million fund aimed at nurturing fast-growing startups.  

This collaborative fund is set to invest in pre-seed and seed funding rounds of innovative tech startups across the MENA region while also continuing to support standout performers within its existing portfolio. 

In recent months, the fund has actively begun deploying capital, finalizing investments in several startups, including Bosta, Trella, Qlub, and ariika.  
 

Topics: startups VENTURE CAPITAL

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Closing Bell: Saudi main index slips to close at 12,372 

Closing Bell: Saudi main index slips to close at 12,372 
Updated 10 sec ago
Reem Walid
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Closing Bell: Saudi main index slips to close at 12,372 

Closing Bell: Saudi main index slips to close at 12,372 
Updated 10 sec ago
Reem Walid

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 12.93 points, or 0.10 percent, to close at 12,372.07. 

The total trading turnover of the benchmark index was SR4.1 billion ($1.09 billion), as 85 of the stocks advanced and 137 retreated.    

However, the Kingdom’s parallel market, Nomu, gained 121.76 points, or 0.39 percent, to close at 31,737, as 44 stocks advanced while 40 declined. 

The MSCI Tadawul Index lost 1.11 points, or 0.07 percent, to close at 1,537.16.     

The best-performing stock of the day was AYYAN Investment Co., whose share price surged 4.67 percent to SR17.48.   

Other top performers included Tanmiah Food Co., which climbed 4.27 percent to SR132, and Ash-Sharqiyah Development Co., which surged 4.16 percent to SR22.52. 

Saudi Reinsurance Co. declined 3.28 percent to SR56.00, while Savola Group slipped 2.84 percent to SR37.65. 

On the announcements front, Dr. Sulaiman Al-Habib Medical Services Group reported its annual financial results for the period ending Dec. 31. According to a Tadawul statement, the company posted a net profit of SR2.3 billion in 2024, marking a 13.16 percent increase from 2023. The growth was driven by higher revenue, attributed to a surge in patient numbers and increased inpatient occupancy. 

The firm also announced its board of directors’ recommendation to distribute SR430.5 million in cash dividends to shareholders for the fourth quarter of the 2024 fiscal year.

A bourse filing showed that 350 million shares are eligible for dividends, with a payout of SR1.23 per share. The statement further noted that the dividend-to-par value ratio stood at 12.3 percent.  

Dr. Sulaiman Al-Habib Medical Services Group closed at SR300, down 0.87 percent.  

Umm Al-Qura for Development and Construction Co. announced the start of the institutional book-building period for its initial public offering, which comprises 130.7 million new ordinary shares for public subscription, representing 9.09 percent of the company’s shares post-capital increase. 

A Tadawul statement revealed that the price range for the offering has been set between SR14 and SR15 per share. The minimum subscription for participating parties is 100,000 ordinary shares, while the maximum allocation is 71.9 million shares. 

Meanwhile, Tanmiah Food Co. reported its annual financial results for the period ending Dec. 31. A bourse filing showed the company recorded a net profit of SR95.8 million in 2024, marking a 26.2 percent increase from the previous year. The rise in profit was primarily driven by operational efficiencies and cost optimization. 

Topics: TASI MSCI NOMU

Gulf economies more resilient amid high energy prices: QCB governor 

Gulf economies more resilient amid high energy prices: QCB governor 
Updated 12 min 47 sec ago
Reem Walid
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Gulf economies more resilient amid high energy prices: QCB governor 

Gulf economies more resilient amid high energy prices: QCB governor 
Updated 12 min 47 sec ago
Reem Walid

RIYADH: High energy prices have strengthened the economies of Gulf Cooperation Council countries, making them less vulnerable compared to other regions, according to the governor of the Qatar Central Bank. 

Speaking at a panel discussion titled “Resilience of the Financial System in Emerging Markets” on the first day of the AlUla Conference for Emerging Market Economies, Bandar bin Mohammed bin Saoud Al-Thani attributed this resilience to sovereign wealth funds, disciplined fiscal policies, and ongoing economic diversification efforts.  

The remarks align with projections that the region’s gross domestic product growth will nearly double to 3.6 percent in 2025, compared to a global forecast of 2.8 percent, according to Oxford Economics. Credit ratings agency S&P Global also expects GCC banks to maintain strong asset quality, profitability, and liquidity through 2025.  

“In our region, which is the Middle East and North Africa, I look at it in two parts. The first part is GCC countries. GCC countries are less vulnerable, and they’re more resilient because of several factors,” Al-Thani said. 

He noted that strong oil and gas revenues have allowed Gulf nations to build financial buffers over the past few decades, supporting their economies in times of uncertainty. “The third is the fiscal disciplines. Most of the GCC countries have a disciplined fiscal policy. Fourth, in my point of view, is that most of the GCC countries came up with a plan of diversifying their economies and they started to execute this plan,” he said. 

Al-Thani also provided a global comparison, noting that while the US economy remains strong, with robust job markets and contained — but still elevated — inflation, other regions face different challenges. 

The panel also explored financial sector trends in the Arab region, with Fahad Al-Turki, director general chairman at the Arab Monetary Fund, highlighting the dominance of banks. 

“The financial sector within the Arab region is dominated by the banking sector — around 93 percent of the financial sector is banking, which represents around 145 percent of the GDP from the region; this compares to 220 percent in advanced economies,” Al-Turki said. 

He noted that in the GCC, the banking sector’s contribution reaches about 240 percent of GDP. “There are three countries that account for almost two-thirds of the banking sector in the whole Arab region, and these countries are Saudi Arabia, the UAE, and Qatar,” he said. 

The governor of the Central Bank of Azerbaijan, Taleh Kazimov, addressed the broader economic implications of geopolitical tensions, citing inflation, changes in international settlements, and regulatory shifts as key concerns.   

Meanwhile, Andriy Pyshnyi, governor of the National Bank of Ukraine, underscored the distinct challenges facing his country’s financial system. 

“Their activity and operations of the National Bank of Ukraine are defined by the war. The country that has been resisting a full-scale invasion for three years and therefore all processes that in one way or another define the logic of our actions, our policies, decisions, position are determined with the aim to ensure macro financial stability in the conditions of the full-scale war,” Pyshnyi said.  

The AlUla Conference for Emerging Market Economies, organized by the International Monetary Fund and Saudi Arabia, aims to tackle global economic challenges. The two-day event brings together finance ministers, central bank governors, policymakers, and leaders from the public and private sectors, alongside international institutions and academic experts. 

Topics: AlUla Conference for Emerging Market Economies

Iran ready to strengthen economic ties with Saudi Arabia, says minister

Iran ready to strengthen economic ties with Saudi Arabia, says minister
Updated 16 February 2025
Nadin Hassan
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Iran ready to strengthen economic ties with Saudi Arabia, says minister

Iran ready to strengthen economic ties with Saudi Arabia, says minister
Updated 16 February 2025
Nadin Hassan

RIYADH: Iran is prepared to enhance its economic and investment ties with Saudi Arabia, including the potential for joint projects. However, progress is contingent upon mutual willingness, according to a senior Iranian official.

In an interview with Arab News on the sidelines of the AlUla Conference for Emerging Market Economies, Abdolnaser Hemmati, Iran’s minister of economic affairs and finance, emphasized that specific agreements would be necessary to facilitate trade between the two nations.

“We are ready to boost our economic relation and investment relation between two countries and joint investment projects between two countries. But this depends on them, and I think the situation of the region is going to that era. We must start to have good relations with all together,” Hemmati said.

He added: “For starting and upgrading trade between two countries, we need to have some agreements. The main agreements is about eliminating double tax, bilateral investment, and also custom rules.”

Hemmati also emphasized Iran’s commitment to strengthening ties with neighboring countries, particularly Saudi Arabia, Qatar, and Oman.

The aim is to bolster both political and economic relations, with a strong focus on enhancing trade and commerce.

He added: “The first important matter is that growing political relations needs to upgrade our economic relations especially in the field of commerce and trade between two countries.”

Hemmati stressed the importance of fostering economic relations among countries in the region to safeguard against external interference. He highlighted that strong economic cooperation is essential for maintaining regional autonomy and stability.

At the conference, a key topic of discussion was the challenges and opportunities facing regional nations, with a particular emphasis on building economic resilience.

Hemmati reiterated that robust economic ties between neighboring countries are vital in order to prevent outside influence in their affairs.

Economic resilience, according to the minister, depends on strengthening cooperation among neighboring countries.

“The future of the region needs to have good economic relations between the member countries of the region,” Hemmati concluded.

Therefore, the future of the region depends on fostering strong economic ties between member countries to ensure long-term stability, security, and prosperity.

Topics: AlUla Conference for Emerging Market Economies

China’s central bank governor highlights key challenges for emerging markets at AlUla conference

China’s central bank governor highlights key challenges for emerging markets at AlUla conference
Updated 16 February 2025
NOUR EL-SHAERI   
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China’s central bank governor highlights key challenges for emerging markets at AlUla conference

China’s central bank governor highlights key challenges for emerging markets at AlUla conference
  • Pan Gongsheng emphasized need for proactive policy measures and strengthened multilateral cooperation to enhance economic resilience
  • He said increasing geopolitical conflicts and protectionism disrupt international value chains and restrict flow of capital, technology, and labor
Updated 16 February 2025
NOUR EL-SHAERI   

RIYADH: Emerging market economies are facing escalating challenges, including geopolitical tensions, sluggish global growth, financial volatility, and increasing public debt, according to the governor of the People’s Bank of China. 

Speaking at the two-day AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the International Monetary Fund, Pan Gongsheng emphasized the need for proactive policy measures and strengthened multilateral cooperation to enhance economic resilience. 

“In my view, emerging markets face four key challenges,” Gongsheng said. “The first challenge is geopolitical tension.” He highlighted how increasing geopolitical conflicts and protectionism disrupt international value chains and restrict the flow of capital, technology, and labor. 

“There has been a drop in global growth and productivity gains and the rising divergences in key industries across countries, mainly due to uneven development and resource misallocation,” he said. 

Pan Gongsheng, the governor of the People’s Bank of China, speaks during the AlUla Conference for Emerging Market Economies. AN Photo

Gongsheng’s remarks align with the IMF’s recent report, which warns that friendshoring — the practice of countries trading primarily with geopolitical allies — could reduce global economic output by up to 1.8 percent. 

Emerging markets, particularly in Asia, may experience up to 6 percent declines due to this shift.

Despite these warnings, a Financial Times report said China has intensified its control over technology and resources, including restricting key battery technology exports, disrupting global value chains, and escalating geopolitical tensions.

Gongsheng identified the second challenge as the slower medium-term growth of the international economy. 

“We are now facing policy uncertainties in some economies. If protectionism escalates, rising trade fluctuations will drive up inflation expectations and undermine medium-term growth,” he added. 

Pan Gongsheng, the governor of the People’s Bank of China, warned that growing investor concerns over fiscal sustainability could trigger government bond market volatility. AN Photo

Citing IMF forecasts, he said global economic growth is projected to hover at just 3 percent in the medium term, the lowest level since 2000. 

Financial market volatility and capital outflows represent the third major challenge. 

“The trajectory of the interest rate in major advanced economies remains highly uncertain,” Gongsheng said. 

“Markets have become particularly sensitive to unexpected economic data. If rates differ and rise significantly from market expectations, market repricing may increase asset price volatility in emerging markets.” 

This aligns with a recent Reuters report, which said emerging markets are facing significant challenges due to a strong US dollar and high treasury yields. 

These factors have led to weaker local currencies, increased costs for servicing dollar-denominated debt, reduced capital inflows, and dampened economic growth. 

Policymakers in these regions find it difficult to counteract these pressures effectively, which are further heightened by new US tariff and trade policies. 

The fourth issue Gongsheng discussed was the burden of high public debt and its implications for financial stability. 

“The IMF points out that global public debt risk has risen significantly due to political and other factors. Those risks not only exist in developing countries — the level of public debt in some advanced economies also merits close attention,” he said. 

He warned that growing investor concerns over fiscal sustainability could trigger government bond market volatility, with potential spillover effects on other asset classes, liquidity risks, and financial stability. 

According to a report by the Institute of International Finance, the global debt stock increased by over $12 trillion in the first three quarters of last year, reaching nearly $323 trillion. 

Pan Gongsheng, the governor of the People’s Bank of China, stressed the importance of multilateralism and global financial governance reform. AN Photo

The IIF attributes the rise to declining borrowing costs and a heightened risk appetite among investors, underscoring concerns similar to those expressed by the governor. 

To address these challenges, Gongsheng outlined key policy responses for emerging markets. 

“First, we should continue improving monetary policy frameworks, enhancing the efficiency of monetary policy transmission, increasing policy transparency, and improving policy communication,” he said. 

He also advocated for increased exchange rate flexibility, stronger public debt management, improved macroprudential regulations, and the development of local currency markets to mitigate capital flow risks. 

Gongsheng stressed the importance of multilateralism and global financial governance reform. 

“The IMF has made great progress in surveillance and governance reform. At the same time, there is still more work to be done for us to advance global financial governance reform,” he said. 

He called on the IMF to enhance support for developing countries, promote trade and investment liberalization, and establish comprehensive policy tools to help emerging markets address capital flow risks and external shocks. 

“The current quota shares can no longer reflect the actual position of emerging markets in the global economy,” Gongsheng said, urging the IMF to establish a “concrete and binding timetable” for future quota realignments, with discussions on fiscal realignment plans set by June.

Topics: AlUla Conference for Emerging Market Economies emerging markets China AlUla International Monetary Fund (IMF) Emerging Market Economies conference

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Ministers urge fiscal discipline, smart investment to tackle debt challenges at Saudi forum

Ministers urge fiscal discipline, smart investment to tackle debt challenges at Saudi forum
Updated 24 min 50 sec ago
Miguel Hadchity
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Ministers urge fiscal discipline, smart investment to tackle debt challenges at Saudi forum

Ministers urge fiscal discipline, smart investment to tackle debt challenges at Saudi forum
  • Discussion underscored need to maintain fiscal discipline while ensuring targeted investments that drive sustainable economic growth
  • Panelists agreed careful financial oversight, efficient resource allocation, and strategic investment remain central to overcoming debt challenges in emerging markets
Updated 24 min 50 sec ago
Miguel Hadchity

RIYADH: Effective debt restructuring requires a thorough understanding of its root causes, said the Russian finance minister at the AlUla Conference for Emerging Market Economies. 

Speaking during a panel titled “High Debt-Low Fiscal Space—Fiscal Consolidation and Multilateral Solutions to Debt Restructuring,” Anton Siluanov said that fiscal prudence and policy monitoring are essential in addressing economic challenges.

“When we restructure the debt, we must be fully cognizant of the underlying causes,” Siluanov said, stressing the importance of careful analysis before implementing financial adjustments. 

He further underscored the responsibility of finance ministries to adopt prudent fiscal policies, ensuring that governments do not exacerbate their debt situations. “If it’s difficult to cut costs, don’t blow them, don’t increase them,” he warned.

The panelists highlighted the need for efficient and targeted financial measures. Mauricio Cardenas, a professor at Columbia University and former Colombian finance minister, argued against indiscriminate budget cuts, saying: “I don’t believe in across-the-board cuts in government expenditures because governments have priorities, countries also have priorities.”

Instead, he called for channeling financial resources more effectively to stimulate economic growth and stability. “In essence, channeling more financing, making sure that financing is more efficient is crucial.”

Saudi Finance Minister Mohammed Al-Jadaan reinforced the importance of strategic financial planning, urging countries to “utilize your fiscal space in the most optimal way.”

His remarks were particularly relevant in the context of Saudi Arabia’s economic positioning, as the Kingdom continues to lead major financial initiatives in the region.

Zambian Finance Minister Situmbeko Musokotwane pointed to investment opportunities in resource-rich nations, particularly critical minerals necessary for global decarbonization efforts. 

“Countries like Saudi Arabia, with a lot of financial capital, the good news is that with the efforts to decarbonize the materials—copper, manganese, nickel, and so forth—they’re in my country, so come and invest,” he said.

The discussion underscored the necessity of maintaining fiscal discipline while ensuring targeted investments that drive sustainable economic growth. 

The panelists agreed that careful financial oversight, efficient resource allocation, and strategic investment remain central to overcoming debt challenges in emerging markets.

The two-day summit, held in the Arabian oasis of AlUla, aims to generate actionable recommendations to strengthen financial stability and promote sustainable growth in emerging economies.

Key discussions will focus on the role of artificial intelligence and digital transformation in driving economic progress. Participants will explore strategies for enhancing economic resilience and fostering stronger cooperation between emerging and advanced economies to promote a more equitable and sustainable future.

Topics: AlUla Conference for Emerging Market Economies Finance

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