Wamda chief sees Aramco dividend for Saudi economy

Fadi Ghandour, who runs the startup investment firm Wamda Capital, said the venture capital scene in the Middle East was improving. (Reuters)
Updated 22 November 2019

Wamda chief sees Aramco dividend for Saudi economy

  • Fadi Ghandour: The initial public offering of Saudi Aramco was a good thing for the Kingdom’s economy and its stock market
  • Ghandour: The decision not to market the IPO directly in some foreign financial centers would make little difference to the outcome of the IPO

BEIJING: Fadi Ghandour, one of the best known entrepreneurs in the Middle East, told Arab News that the initial public offering of Saudi Aramco was a good thing for the Kingdom’s economy and its stock market.

Speaking on the sidelines of the Bloomberg New Economy Forum in Beijing, Ghandour said: “It will be good for the country and for the Tadawul. It will deepen markets and give citizens a sense of participation.”

He added that the decision not to market the IPO directly in some foreign financial centers would make little difference to the outcome of the IPO. “It’s a statement by the Kingdom that it has its own resources, and does not have to rely on others. But I can see how some people would view it negatively. Once Aramco is listed on the market, it will all be much more transparent,” he said.

Ghandour, who runs the startup investment firm Wamda Capital, said the venture capital scene in the Middle East was improving. “Our business is different from the slow down in bricks and mortar. The sovereign wealth funds are finally starting to look at investment in startups and small-to-medium enterprises,” he said, citing recent activity by Saudi Arabia’s Pubic Investment Fund and Mubadala of the UAE.

“There are increasing opportunities in fintech and and e-commerce,” he said.

He said the investment strategy of other big players, like the Saudi and UAE-backed Vision Fund, was flawed. “Throwing a lot of money at companies with high valuations blunts their need to show a serious path to profits. Management loses its edge. The path to profitability is not through having a big brother with lots of money. Startup companies survive because they have a path to profitability,” he said.

Ghandour said he was in Beijing because he wanted a “Chinese perspective” on business. “The Middle East is looking increasingly eastwards, and that’s a good thing. China is always looking for new markets and resources, and they are increasingly innovators these days rather than copiers. They want to be leaders in business,” he added.


Google Cloud prepares for Black Friday ‘peak on top of peak’

Updated 04 August 2020

Google Cloud prepares for Black Friday ‘peak on top of peak’

  • Cloud technology, used to host websites and store data, is a key part of many retailers’ e-commerce operations

OAKLAND, California: Alphabet’s Google Cloud unit is poised for a surge in fourth-quarter sales from US retailers, as they brace for record online shopping during the holidays because of COVID-19 lockdowns.
Cloud technology, used to host websites and store data, is a key part of many retailers’ e-commerce operations. As fees are often pegged to site traffic, a jump in activity will drive up revenue for the unit.
Carrie Tharp, vice president of retail and consumer at Google Cloud, said that her team had this year tossed out its linear growth model to predict how many servers it will need to process web orders for retailers around Black Friday.
“We’re planning for peak on top of peak,” she said on Monday. That could be a boon for Google Cloud, which has generated about 30 percent of its revenue during the fourth quarter the last two years.
Stores such as Kohls Corp. and Wayfair Inc. lean on Google months in advance to ensure it has enough servers to withstand increased shopping during holiday discount days such as Black Friday and Cyber Monday in November and December.
This year, Black Friday-style demand has flooded shops since March, when the United States began lockdowns, Tharp said.
Holiday shopping is expected to boost demand further, as retailers including Target Corp. and Walmart Inc. have said they will reduce in-store hours because of coronavirus concerns.
Tharp said the pandemic has already benefitted Google Cloud, with some retailers adopting its predictive algorithms years ahead of plan to help them work out the most efficient way of fulfilling orders.
Electronics retailer Best Buy Co., for instance, announced on Tuesday a multi-year deal to centralize customer and product data with Google Cloud to improve its loyalty program and online ad campaigns.
The companies declined to elaborate on the deal, but Tharp said she hopes it leads to Google eventually powering Best Buy’s web ordering system.