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

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.


Motorhomes come of age as Europe relaxes lockdowns

Updated 32 min 52 sec ago

Motorhomes come of age as Europe relaxes lockdowns

  • This form of transport means freedom — and health and safety into the bargain

PARIS: After months of working on the frontline in the battle against COVID-19, Spanish nurse Yone Alberich was ready for a holiday, but the question was how.

Going on holiday generally meant flying abroad — but with the virus still very much in the air, she didn’t want to take a plane. 

Nor did Alberich want to stay in a hotel or be around crowds of people. So she and her husband rented a motorhome.

“The idea was to keep away from people to avoid getting infected,” said the 32-year-old, who has a toddler and lives in the Valencian coastal town of Castellon.

“And with COVID, what could be better than traveling around with your house on your back?“

With social distancing the new norm in Europe to avoid any fresh outbreaks, there has been a shift in thinking about holidays, with a recent survey showing 90 percent of Spaniards would remain in Spain rather than traveling abroad. And 83 percent planned to use their own car over public transport.

Fabrizio Muzzati, who runs specialist Spanish travel agency Aquiestoy Caravaning, said that many people who never thought about a motorhome holiday are now considering it.

“At a time when the whole world is very much looking for a sense of security, there are a lot of people who are going to give it a go because of the circumstances.”

And as travel restrictions were eased, motorhome rentals resumed “intensively,” the Spanish mobile home and campervan association ASEICAR said last month, suggesting it may be “key to reviving tourism this summer.”

And it is not just in Spain. “Since the rollback, there’s been a real craze for motorhomes, everywhere,” says Francois Feuillet, president of the European Motorhome Federation. “The motorhome means freedom, savings and being green. Now we can add health and safety and for us, that’s a real boon.”

Across Europe, there has been growing interest in the sector and today there are five million users and two million vehicles in circulation, industry figures show. In Germany, Europe’s main market, more than 10,000 new motorhomes were registered in May, an increase of 32 percent year-on-year, while France added 3,529 new registrations — up nearly 2 percent.

And in Spain, a much smaller market but where interest is growing rapidly, there were 1,208 new vehicles registered in June — up 20 percent on last year, ASEICAR figures show.

There has also been a jump in demand in the rental market.

Yescapa, a peer-to-peer rental platform, registered more than 32,500 bookings across Europe in June, with requests for July and August 60 percent higher than in the same period last year.

Of that number, just under a third — or 9,435 — were in Spain.Despite the reopening of Europe’s borders on June 15, most people are reluctant to go abroad, Yescapa co-founder Benoit Panel said.

“Since COVID, there have been almost no cross-booking rentals,” he said, referring to travelers booking outside their country of origin, who usually constitute 20 percent of reservations.

First-time renter Jose Pascal Guiral, who runs a ceramics export business and always holidays abroad, took a motorhome as soon as lockdown ended, spending a week touring scenic mountain passes in the Spanish Pyrenees.

“It’s so much nicer than going in a plane or a hotel, it gives you a real sense of freedom. You go for a week and you feel like you’ve been on holiday for a month,” he said.

Julio Barrenengoa Gomez, director of Caravanas Holidays, said that the crisis has increased interest in national tourism.

“People tend to want a motorhome to travel around Europe but this year, they’re looking to stay here in Spain. With all our desire to visit Europe, it seems like we’ve forgotten just how beautiful Spain is. This year is going to boost national tourism.”

Others believe the health crisis will accelerate a shift away from the mass tourism of resorts, cruises and package holidays.

“This pandemic will change people’s habits because they’ll be less likely to stay in crowded places,” said Fernando Ortiz, director of established Spanish motorhome brand Benimar.

“Not necessarily because of the risk — they will find a vaccine — but because people like being able to change their plans from moment to moment while traveling,” he said. “And that is likely to last.”