Saudi-backed fund invests with Alphabet

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Softbank’s Vision Fund — whose backers include Saudi Arabia’s Public Investment Fund — is investing in China’s Manbang, a truck-hailing app. (AFP)
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SoftBank CEO Masayoshi Son. (AFP)
Updated 25 April 2018
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Saudi-backed fund invests with Alphabet

  • The potential investment reflects Saudi Arabia’s continued interest in investing in tech startups outside of the Middle East.
  • Dowsett said that the region does still lack innovation and there was more a trend toward “reinvention”.

LONDON: SoftBank’s Vision Fund, backed by Saudi Arabia’s Public Investment Fund and the UAE’s Mubadala, invest in China’s ‘Uber for Trucks.’ 

Saudi Arabia’s appetite for investment in technology shows no sign of abating as reports emerge that a fund backed by the Kingdom is one of a number of investors looking to fund Chinese truck-hailing app Manbang. 

SoftBank’s $100 billion Vision Fund is said to be leading a group of funds and venture capitalists keen to support the mobile app platform, referred to as China’s “Uber for Trucks,” which helps link up truck drivers to shippers.

The platform is run by the Manbang Group, also known as the Full Truck Alliance, and was originally looking to raise up to $1 billion to fund its expansion. However, the company could be close to attracting as much as $2 billion from investors, according to the Wall Street Journal, which originally reported the investment.

The Vision Fund, the brainchild of  SoftBank CEO Masayoshi Son, is backed by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), as well as others including the UAE’s Mubadala Investment Company, Apple and Foxconn.

Alphabet’s venture capital fund CapitalG is also said to be one of the potential investors in the Chinese company. Softbank declined to comment on the reports. Alphabet did not respond to Arab News with a comment. The funding will help Manbang develop new business lines and to recruit talent, according to a statement from the firm, cited by Reuters. 

The potential investment reflects Saudi Arabia’s continued interest in investing in tech startups outside of the Middle East as it strives to diversify its investment interests away from the oil and gas sector. 

Technology is also an area where Saudi Arabia, and other Middle East investors, are eager to position themselves as major players. 

“Globally people are still learning about these technologies. To an extent it is where the Middle East could play catch-up, it is not on the back-foot, like it is in a number of (other) industries,” said Philip Dowsett, a partner at the law firm Morgan Lewis, based in Dubai. Dowsett works closely wth a number of private equity and venture capital funds. 

The Middle East could be “a player in these emerging technology markets,” he told Arab News. 

Back in 2016, Saudi Arabia’s PIF invested $3.5 billion in the lift-sharing app Uber, while Twitter secured a $300 million investment from Prince Alwaleed’s Kingdom Holding Company in 2011. Alwaleed also invested $105 million in the ride-sharing app Lyft in 2015. 

SoftBank’s Vision Fund also funded workplace messenging service Slack in September, while WeWork, the US-based startup that offers shared working spaces, secured a $4.4 billion investment from the fund last year. The funding was to be partly used to support the company’s expansion in Asia. 

The Financial Times on April 24 reported that WeWork is looking to tap the debt markets to further fund its expansion.
While Saudi Arabia’s interest in technology is unlikely to slow, Dowsett said sovereign wealth funds, such as PIF, will have to start thinking about what they bring to the table part from just writing the ‘big checks.’

“Other than that ticket and that check, what else do you bring to that investment?” said Dowsett, saying outside of the Middle East the venture capital market for tech deals is highly competitive. 

“This is what investors are trying to do. Gain this insight gain this experience, and build expertise in investing in technology assets,” he said. While most Middle East funds are looking for big-ticket tech deals outside of the region, the local tech industry is becoming more appealing to international investors.

“We are seeing a growth in the market,” said Dowsett, citing the Dubai-based ride-sharing app Careem, which launched in 2012 and has attracted venture capital funding from investors such as Daimler Financial Services. 

“It is all helping to promote the Middle East and to show that there is an environment to invest and money is coming in from outside the region — and there are very decent assets,” he said. “I have a number of private equity clients from the US and UK who are looking at this — it is not the Wild West as it used to be, there are fantastic assets here,” he said, noting that sometimes they are harder to find, with big-ticket deals still few and far between. 

Dowsett said that the region does still lack innovation and there was more a trend toward “reinvention,” where companies are taking concepts created elsewhere and replicating them for the region.


‘Naked Diplomat’ author Tom Fletcher bares all on life as UK ambassador to Lebanon

Updated 26 May 2018
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‘Naked Diplomat’ author Tom Fletcher bares all on life as UK ambassador to Lebanon

Tom Fletcher might be best described as “the anti-diplomat.” Not in the sense that he sees no value in diplomacy, but in his steadfast refusal to live up to the stereotype expected of the ambassadorial profession.
While British ambassador in Beirut, he tweeted his way to acceptance by his hosts with an informal style and social accessibility that was in distinct contrast to the stuffy image of the traditional diplomatic circuit.
He told the BBC that there was not a single Ferrero Rocher in the embassy building — referring to the chocolates jokingly associated with the job after a 1990s TV commercial — and his “Dear Lebanon” farewell blog in 2015 after four years in the job boosted his broad international online appeal.
Now, Fletcher is running a portfolio of careers in the space where business, technology and public policy intersect. He is a visiting professor at New York University in Abu Dhabi, specializing in international relations, and is also involved with the Emirates Diplomatic Academy, the “ambassadors’ finishing school” in the UAE capital.
The former envoy is also chairman of the international board of the UK’s Creative Industries Federation and a member of the United Nations’ Global Tech Panel, as well as continuing a career as a successful author. His book “The Naked Diplomat” explored the interactions between governments, technology and big business, and became an international bestseller.
His experience and Internet renown make him a star attraction on the international forums circuit. He was on a panel in Dubai recently to discuss the findings of the 10th Arab Youth Survey, and afterwards went into some detail on the findings of the poll, which showed — alarmingly for some — that the US was waning in popularity in the region under President Trump and that Russia was increasingly regarded as a friend for young people in the Middle East.
Fletcher told Arab News that there was some reason to be worried about those findings, but also cause for optimism. “We have seen a striking fall in reputation among young people in the region since the US elections. But it was also worth noting the wider admiration for the American people as a whole, which looks quite resilient.
“The Russia results were interesting, because Russia has not always been a stabilizing force in the region. On Trump, they are further confirmation that the election of the leader of the free world created a vacuum. But the lights will eventually come back on in the shining city on a hill,” he said.
The survey seemed also to reveal a generational split in the Arab world, with many youngsters demonstrably not sharing their elders’ view of the US president. “I think that the region has access to the same information as the rest of us, and can take from it a pretty clear assessment of Donald Trump’s reliability. There are clearly some areas of alignment with some countries, such as the rejection of the Iran deal. But the survey shows that people across the region also hear the Trump administration’s wider messaging on the Middle East,” Fletcher said.
The Iranian situation was clearly on his mind, but he said there were alternatives to an escalating confrontation between the US and the Gulf states on the one hand, and the regime in Tehran on the other. “Wherever you stand on the Iran deal, its violation is a concern for regional security. The issue we have to ask ourselves is ‘what is the alternative for restraining Iran’s nuclear potential?’ Personally, I haven’t seen a better answer to that than the existing Iran agreement.
“Of course, the Iran deal in itself isn’t sufficient in reacting to Iran’s wider regional role, not least in Syria. But I worry that it is the hard-liners in Tel Aviv and Tehran who seem keenest to end the agreement,” he said.
A lot of his time in Beirut was spent dealing with the regional fallout from the Syrian crisis, which started just as he began the ambassador’s job. Surely, seven years on and with no solution in sight, that represents a failure of traditional diplomacy?
Fletcher’s response was, well, diplomatic. “Not all has failed. Huge effort has gone into keeping Lebanon relatively stable, despite the scale of the Syria crisis just across the border. Diplomacy has failed on Syria and on Palestine/Israel. But George Mitchell (the American politician credited with helping bring about an end to the Northern Ireland conflict in the 1990s) said that making peace was 700 days of failure and one of success. We have no choice but to keep trying, and to work harder than those who want to see diplomacy continue to stumble,” he said.
Fletcher’s work in the Gulf has enabled him to take a broad overview of developments in the region, and there is no more intriguing situation than in Saudi Arabia, which is going through a rapid transformation of the economy and society under the Vision 2030 strategy. “I think there has been a shift in international opinion on Vision 2030 over the last year. Initially many were curious, and conscious of the obstacles.
“But there is now a growing realization of how important a reform agenda is, especially if it succeeds in creating more opportunity for young people, including women. We all should hope it succeeds — I think it can, but will need maximum involvement of citizens themselves in shaping an open approach,” he said.
Fletcher also has a clear view of the kind of socioeconomic order that will emerge from the transformational policies of regional leaders.
“The Gulf has clearly realized that there is a need to move away from oil dependency well before the oil runs out. The answer has to lie in a knowledge economy. I’m heartened by the kinds of issues that my students at NYU AD want to work on and pioneer. And by the government focus on themes like wellbeing and education reform.
“Twenty-first century skills will need to be at the heart of the school curriculum, with learners encouraged to be curious, to seek out sources of knowledge and wonder, and to learn teamworking and innovation. This is happening increasingly in the larger cities, but there is still work to be done to mainstream knowledge, skills and character in education systems,” he said.
With the power of Big Data coming under scrutiny as never before in cases such as the controversy over Facebook’s role in the political process in the US and elsewhere, Fletcher’s work for the UN is more relevant than ever, and he believes there is a big role for the Gulf states to play in that debate.
“The Middle East needs to ensure it is better represented in the international architecture. It needs to be a key part of the debate about security and liberty online — the UAE Artificial Intelligence Minister (Omar Bin Sultan Al-Olama) is a great example of this. And it needs to help get everyone on to a free Internet,” he said.
Before entering the diplomatic service, Fletcher was an adviser on foreign policy to three British prime ministers, which gives him a unique perspective on the big current issue in the UK — the increasingly bitter process of leaving the EU, or Brexit.
The search for new trading partners has seen a succession of British ministers visiting the Gulf region in a bid to clinch new business. Fletcher does not share the view of some that the UK is destined for insularity and isolation in the post-Brexit world.
“The UK is going through a complex process, but it is always at its best when it has a worldview formed from having actually viewed the world. When it is open minded, outward looking. When it stands for more liberty — rights, trade, thought.
“The creative industries are already showing the way. And the royal wedding was a brilliant reminder of what the UK can be — diverse, modern, self-aware, creative. We all badly needed that reminder,” he said.
Fletcher was the youngest person ever to get a major ambassadorial post, and seems well set to pursue a handsomely paid career in virtually any sector, from international policy-making, to domestic UK politics or the private sector.
But he still regards himself as a diplomat with a creative twist. “I still write diplomat on the landing cards in planes.” And there is a second book in the works, he revealed: “I’ve just finished a murder novel, featuring an ambassador detective,” he said.
It is doubtful there will be a Ferrero Rocher mentioned in the book.