The US multitasker searching for Saudi startup unicorn

The US multitasker searching for Saudi startup unicorn
Matthew Salloway is the CEO of GSI Ventures and co-founder of SIP Global Partners. (Supplied)
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Updated 10 January 2021

The US multitasker searching for Saudi startup unicorn

The US multitasker searching for Saudi startup unicorn
  • Leading venture capitalist Matthew Salloway believes Kingdom can ‘become next Silicon Valley’

JEDDAH: Matthew Salloway has many strings to his bow. A law graduate, he set up his own firm in Manhattan and has represented royal families, professional athletes, investors, celebrities, high-net-worth individuals and media companies.

He is also a movie producer and has made films with Oprah Winfrey, George Clooney, Ryan Gosling, Michael Keaton and Robert De Niro.

But his real passion is now in technology, venture capital and finding innovative US startups that can be launched in the Middle East and North African market, with Saudi Arabia being a prime focus.

“We’re very bullish on Saudi Arabia as a country in terms of the technology ecosystem. We’re very focused on bringing a lot of our technology companies into the region,” the CEO of GSI Ventures and co-founder of SIP Global Partners told Arab News, adding that he was certain the “incredibly positive” outlook in Kingdom will help make it “the next Silicon Valley in the region.”

“We’re one of 15 companies that is actually licensed by the Saudi Ministry of Investment through the venture initiative. So we are a company that’s very interested in helping our technologies grow into that ecosystem.”

GSI stands for growth, sustainability and integrity. The company has a strong profile in venture and technology investing, and is heavily focused on the MENA region. 

Salloway said there was “no other country in the region” that can rival the Kingdom in supporting startups.

“Looking at the numbers, you see the amount of focus that technology has in venture capital … $95 million was invested in the first half of 2020 into Saudi-based startups. It was the most ever in history; it was $7 million in 2015.”

With the government injecting billions into startups and venture capital through bodies like the Public Investment Fund, and establishing and building a healthy ecosystem for the market, Salloway is confident, saying it “makes it easy” for businesses to access the Saudi market.

“We want to be part of the development of the ecosystem as entrepreneurs, founders and investors are sort of growing into the space. They will obviously take time because it’s new to the Kingdom. But based on the amount of progress that has happened over the last few years, both from the government and from the numbers that we’re seeing, I think it’s setting the stage for an incredibly powerful technology ecosystem and hub,” he said.

Salloway added that the reason that the Kingdom can compete with global markets is due to a young population, with 70 percent of people aged under 40, vast smartphone adoption and a sophisticated, technological user base.

But he warned that the process will not be completed overnight. Through cultivating a culture that tries to innovate, equipping people with the right skills through training, teaching people how to start companies and run them, and how to build sales and marketing plans, the Kingdom can further build that ecosystem and introduce more unicorns like Careem.

A unicorn is an industry term used to describe a privately held startup valued at over $1 billion.

“Technically, out of 5 million companies, only three become unicorns. So the numbers are incredibly stacked against you. In order to be competitive, you need to start a lot of companies and there’s going to be failure,” said Salloway.

One area that might produce a big Saudi startup unicorn is in the gaming sector. “There’s a huge opportunity in gaming for someone to start a company in the region that is local to Saudi, given the high adoption of gaming technology,” he said.

Statistically, 14 percent of the world’s gamers are from the Middle East, totaling 300 million. “It’s a $5 billion business, with the only problem being that lot of the games played in the region are from international developers,” he added.

The coronavirus pandemic, Salloway said, has only strengthened the importance of technology investment.

Through GSI Ventures, Salloway is looking forward to bringing 5G technology to the Kingdom, describing it as a $14 trillion global opportunity, not only in terms of technological implementation but also the benefits it brings to health care, digital health, artificial intelligence and smart cities.

“Saudi Arabia specifically spends more per capita on 5G, for the country, for the users, and the people of Saudi Arabia, than any country in the world,” he said.


Careem welcomes Saudization of ride-hailing sector, eyes further investment

Careem welcomes Saudization of ride-hailing sector, eyes further investment
Updated 16 January 2021

Careem welcomes Saudization of ride-hailing sector, eyes further investment

Careem welcomes Saudization of ride-hailing sector, eyes further investment
  • Careem said the company had been affected by the pandemic because workers stayed at home and cut down on their travel

DUBAI: Ride-hailing service Careem has welcomed a government decision to fully localize the sector in the Kingdom, saying the move will help to create more jobs for Saudi drivers.

The Saudi Ministry of Transport said the new rule would have limited impact as citizens already made up 96 percent of the workforce in the ride-hailing sector.

“We are proud that over 100,000 Saudi nationals are finding income-earning opportunities with Careem each month,” a Careem spokesperson told Arab News. “We’ve worked hand-in-hand with the Transport General Authority and Ministry of Human Resources and Social Development to help the Kingdom achieve its ambitious agenda, and applaud the efforts the government is making to support Saudis working in the ride-hailing sector.”

The spokesperson added that Careem planned to continue investing in the Kingdom with a greater range of transportation and delivery services. 

Although Careem did not give specific numbers for its operations in Saudi Arabia, it said it had 33 million registered users in 13 countries across the region and operated in 28 Saudi cities.

Ibrahim Manna, managing director of global markets at Careem, said the company had been affected by the pandemic because workers stayed at home and cut down on their travel.

“COVID-19 has impacted our ride-hailing, starting in March,” he told Arab News. “This is a natural result of lockdowns, curfews and other limitations of movement, changing user behavior and habits in daily life.”

But while the ride-hailing service decreased, food delivery demand soared.

“Delivery was one of the big growth levers,” he added. “Due to the change in the daily lives and needs of the customer, we adapted quickly and provided them with what they needed most. We partnered up with many stores, pharmacies and restaurants, in order to deliver essentials to citizens in Saudi Arabia during a difficult time.”

On Thursday Mueed Al Saeed, assisting vice president of Land Transport Regulation of the Public Transport Authority, said there were 16 companies including Careem licensed to operate ride-hailing services in the Kingdom.

He also said 300 million trips had been carried out during the past three years, and that there were 250,000 drivers actively working for these services.