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)
Short Url
Updated 20 April 2024
Follow

Saudi Arabia leading region’s transformative journey 

Saudi Arabia leading region’s transformative journey 
  • SVC makes significant strides in shaping private investment landscape

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.  
 


Nearly all Gazans in poverty, Palestinian Authority facing ‘imminent fiscal collapse’ - World Bank

Nearly all Gazans in poverty, Palestinian Authority facing ‘imminent fiscal collapse’ - World Bank
Updated 12 sec ago
Follow

Nearly all Gazans in poverty, Palestinian Authority facing ‘imminent fiscal collapse’ - World Bank

Nearly all Gazans in poverty, Palestinian Authority facing ‘imminent fiscal collapse’ - World Bank

RIYADH: Nearly every Gazan is living in poverty as the Israel-Hamas war continues to have a “devastating impact” on the Palestinian economy, according to the World Bank.

An analysis by the organization sets out how the economic consequences of the conflict have spread beyond Gaza and into the West Bank, with widespread unemployment and underemployment combined with inflation causing a rapid decline in purchasing power for households in both areas.

Nearly half a million jobs across the territories have been lost since October 2023, and per capita gross domestic product declined by 12 percent in 2023.

Israel has bombarded the densely populated Gaza Strip following the Oct. 7 Hamas attack on Israeli communities. Israel says Hamas killed some 1,400 people including children, and took more than 200 hostages, some of them infants and older adults.

The fiscal situation of the Palestinian Authority has dramatically worsened, according to the World Bank, with a financing gap expected to reach $1.2 billion heightening the risk of disorderly adjustments and a potential imminent fiscal collapse.

In May 2023, the World Bank forecast the Palestinian economy to grow about 3 percent by the end of the year, after a 4 percent post-COVID-19 boost in 2022.

That analysis has been completely reversed by the conflict, with the organization now forecasting the Palestinian economy will contract anywhere between 6.5 percent and 9.4 percent during 2024. 

“The northern governorates of Gaza are experiencing a full-blown famine, with food insecurity reaching catastrophic levels, particularly in the northern areas and extending southward,” said the World Bank’s latest report, adding: “At least one in four Gazan is experiencing catastrophic hunger, and 95 percent of the population is suffering from food insecurity.”

Most children in Gaza are at risk of “stunting” because of the famine, the analysis added.

Reflecting on the economic impact of the conflict, the report said the outlook of the Palestinian territories for the full year of 2024 “remains highly uncertain, depending on the severity and duration of the conflict, changes in Israeli policies in the West Bank, including those related to access to the Israeli labor market, and the outcome of the clearance revenue dispute.” 

The Palestinian Authority is facing a significant decrease in clearance revenue transfers and shrinking domestic resource mobilization, coupled with a rigid current expenditure envelope, the World Bank said.

“The PA’s financing gap after aid for 2023 reached $682 million or 3.9 percent of GDP, and the situation is expected to worsen further in 2024, with a potential financing gap of up to $1.2 billion. A focus on fiscal policies, especially those improving spending efficiency, particularly regarding the unsustainable wage bill and enhancing tax mobilization, must remain a top priority in the reform agenda,” said the report.

The World Bank argued that the banking sector across the territories is “well regulated” by the Palestine Monetary Authority, which has “steadily been building the capabilities and resilience of local banks.”

The report added: “Presently, the banking system is well capitalized, liquid, and compliant with the Capital Adequacy Requirements set by the PMA. At the same time, institutional and economic difficulties are tilting the risks upward for the financial sector. Actively avoiding further instability is crucial to allow the financial sector to maintain its established function as a stable pillar during periods of economic challenges.”


Startup Wrap – regional startup activity flourishes  

Startup Wrap – regional startup activity flourishes  
Updated 58 min 45 sec ago
Follow

Startup Wrap – regional startup activity flourishes  

Startup Wrap – regional startup activity flourishes  

CAIRO: The startup ecosystem in the Middle East and North Africa region saw a flurry of activity as venture investments and acquisitions bloom. 

Saudi Arabia-based Software-as-a-Service provider Merit has raised $12 million in its pre-series B funding round, led by Alistithmar Capital i-Cap and followed by existing series A investors Tech Invest Com and Hambro Perks Oryx Fund. 

Founded in 2016 by Julie Barbier-Leblan and Thrishan Padayachi, Merit assists businesses in increasing customer and employee engagement via a suite of cloud-based SaaS platforms, enterprise solutions, applications, and software.  

This new round will help Merit develop its technology to enhance customer engagement. In 2021, Merit raised $5 million in a series A round led by Saudi Arabia’s Impact46, along with Tech Invest Com, Arzan VC, Hambro Perks Oryx, and several regional angel investors. 

Riyad Capital launches 1957 Ventures to support digital transformation 

Riyad Capital, backed by Riyad Bank, has launched the 1957 Ventures investment fund to drive transformative growth in Saudi Arabia’s fintech sector. 

The fund aims to accelerate the Kingdom’s digital transformation by creating opportunities for innovative fintech business models. 

Abdullah Alshwer, CEO of Riyad Capital, stated, “The 1957 Ventures Fund embodies a forward-thinking financial vision aligned with the Kingdom’s ambitious digital transformation goals; this fund signifies a strategic investment in the future of Saudi fintech.”  

“Our institutional approach will unlock new levels of innovation, driving both sector growth and sustainable economic impact,” he added. 

Saudi logistics startup MDD closes $1.3m series A round 

Saudi Arabia-based logistics startup MDD has closed its series A round with $1.3 million in funding for a 5 percent stake with a valuation of $26 million. 

Founded in 2019, MDD provides supply chain solutions for businesses. 

Saudi startup Sorbet’s raises funding round from web3 VC Adverse 

Saudi web3 startup Sorbet raised an investment round from the Kingdom’s recently announced venture capital firm Adverse. 

Founded by Rami Djebari and Maher Ayari, Sorbet aims to simplify business processes for freelancers by cutting fees and intermediaries. 

“Receiving support from an experienced partner like Adverse will accelerate our development and enhance our market strategy. This collaboration is a milestone in breaking down financial barriers and enabling limitless growth opportunities for professionals in the region,” Djebari said. 

Egyptian fintech e-Finance acquires stakes in Al Ahly Momken and EasyCash 

Egypt-based fintech e-Finance for Digital and Financial Investments has acquired a 25 percent stake in Al Ahly Momken and a 13 percent stake in EasyCash for Digital Payments for an undisclosed deal value. 

Founded in 2005, e-Finance is involved in the development of digital payment infrastructure and digital space to help achieve social development goals.  

Al Ahly Momken, based in Egypt, is a digital payment provider, serving over 90,000 merchants and more than 5 million customers.  

Meanwhile, EasyCash, also based in the north African country, provides payment services for individuals, merchants, and businesses. 

These acquisitions align with e-finance’s strategy to expand its footprint in the digital payments market and support Egypt’s Vision 2030 for digital transformation. 

Egypt’s OneOrder closes $16m series A round 

Egypt-based logistics startup OneOrder has raised $16 million in a series A round in a mix of equity and debt, led by Delivery Hero Ventures, with participation from Norrsken22 and existing investors, Nclude and A15. 

Founded in 2022 by Tamer Amer and Karim Maurice, OneOrder is a tech-enabled supplier and wholesale distributor that offers the food and beverages industry a supply of quality goods with embedded financing.  

The company plans to expand into the Gulf Cooperation Council region by the fourth quarter of 2024. In December 2022, OneOrder closed a seed round at $3 million. 

Jordan’s fintech liwwa takes $5m loan 

Jordan-based fintech liwwa has secured a $5 million loan from the US International Development Finance Corp.. 

Founded in 2013 by Ahmed Moor and Samer Atiani, liwwa is a peer-to-peer lending network that connects investors and small businesses through smart business loans.  

The latest cash influx will enable liwwa to finance further small and medium sized enterprises across various sectors. Liwwa’s last funding round was in 2022, when it raised $18.5 million in a pre-series B round of equity and debt. 

Egyptian investment bank EFG Hermes acquires stake in Danish wealth management firm 

Egypt’s investment bank, EFG Hermes, a subsidiary of EFG Holding, has acquired a minority stake in the Danish digital wealth manager Kenzi Wealth for an unknown value. 

The new partnership will enhance EFG Hermes’ digitalization vision. By combining EFG Hermes’ client network and Kenzi Wealth’s AI tools, EFG Hermes will be able to offer its clients a more efficient and personalized investment experience.  

Founded in 2021 by Mohamed El-Masri, Kenzi Wealth specializes in tailoring investment features to meet the needs of investors. 

Mohamed El-Masri, founder of Kenzi Wealth. Supplied

UAE’s Plain Tiger raises funding round 

UAE-based business-to-business marketplace Plain Tiger has raised an investment from UAE’s venture capital firm AngelSpark for an undisclosed amount. 

Founded in 2021 by Alexandra Polson and Oliver Baillie, Plain Tiger connects hotels with eco-friendly suppliers, saving them time, money, and reducing their environmental impact.  

The investment is part of Plain Tiger’s $1.5 million seed round, which will be used to expand into Saudi Arabia and accelerate more hotels’ pathway to net zero procurement. 

UAE’s Revent closes $900k in pre-seed round 

UAE-based electronics marketplace Revent has raised $900,000 in a pre-seed round, provided by Techstars and a group of angel investors. 

Founded in 2022 by Baldeep Singh and Dhananjay Choubey, Revent offers SMEs pre-owned devices on monthly subscriptions across the UAE and Saudi Arabia.  

The funds will be used to build a self-service platform for businesses, along with growing Revent’s client base in Saudi Arabia. 

UAE’s proptech Keyper closes $4m equity round 

UAE-based proptech Keyper has raised $4 million in equity in a pre-series A round, led by BECO Capital and Middle East Venture Partners, with participation from existing investors Vivium Holding, Jabbar Group, Signature Developers, and new investors Annex Investments, Pin Investment, and Al Qahtani Investment, among other angels. 

The company has also received an additional $30 million in Shariah-compliant sukuk financing from global asset manager Franklin Templeton Investments Ltd., bringing its cumulative capital raised to-date to over $40 million.  

Founded by Omar Abu Innab and Walid Shihabi in 2022, Keyper offers a property management platform where tenants can track their expenses and charge online, and investors get real estate portfolios and access to data-driven insights.  

Keyper will invest the fresh funds into digitizing the rental experience in the UAE and scaling its innovative rent now, pay later solution. Last October, Keyper raised a $6.5 million seed round. 

UAE’s proptech Huspy raises investment round 

The app of proptech firm Huspy. Supplied

UAE-based property technology firm Huspy has raised a fresh investment round led by Balderton Capital, with further participation from existing investor Fifth Wall, amongst other investors. 

Founded in 2020 by Jad Antoun and Khalid Ashmawy, Huspy facilitates the home buying and financing process through its online marketplace.  

The company claims that this round of funding is at a higher valuation than the $37 million series A raised in 2022. The newly acquired capital will be deployed to build a super app for real estate. 

Egypt’s proptech Birdnest raises pre-series A round 

Egypt-based proptech Birdnest has closed an undisclosed pre-series A funding round for a 20 percent stake in the company, led by Beltone Venture Capital and CI Venture Capital. 

Founded in 2020 by Mostafa El-Nahawy and Ahmed Fadda, Birdnest offers furnishing services and rental management solutions to ensure maximum returns for real estate investors and value for tenants.  

The funds are earmarked for the expansion of the regional quality team, the enhancement of proprietary technologies, and marketing initiatives to reinforce Birdnest’s market position.


Oil Updates – crude steady as investors weigh US rate fears, firmer seasonal demand

Oil Updates – crude steady as investors weigh US rate fears, firmer seasonal demand
Updated 24 May 2024
Follow

Oil Updates – crude steady as investors weigh US rate fears, firmer seasonal demand

Oil Updates – crude steady as investors weigh US rate fears, firmer seasonal demand

SINGAPORE: Oil prices were stable on Friday as investors considered the latest comments from the US Federal Reserve on interest rates amid sticky inflation, while signs of firming seasonal US fuel demand lent support, according to Reuters.

Brent crude futures rose 2 cents at $81.38 a barrel at 6:15 a.m. Saudi time, while US West Texas Intermediate crude futures were down 1 cent at $76.86.

Both benchmarks settled at multi-month lows on Thursday, with Brent crude futures closing at their weakest point since January and US crude futures hitting a three-month low.

Brent futures were headed for weekly declines of more than 3 percent, while WTI futures were poised for a slide of nearly 4 percent from last week as ongoing macroeconomic constraints in the US held prices in the balance.

“The sore demand sentiment owing to the hawkish Fed outlook at rates and the backdrop of ‘possibly higher-for-longer rates’ weighed significantly on oil prices this week,” said Priyanka Sachdeva, a senior market analyst at Phillip Nova.

Minutes released on Wednesday from the Fed’s latest policy meeting showed policymakers questioning whether current interest rates are high enough to tame stubborn inflation.

Some officials said they would be willing to hike borrowing costs again if inflation surged. However, Fed Chair Jerome Powell and other policymakers have since said they feel further rate hikes are unlikely.

Higher rates could slow economic growth and crimp fuel demand.

Meanwhile, strengthening US gasoline demand was helping to stabilize prices ahead of the Memorial Day holiday weekend, which is considered the start of the US summer driving season.

Gasoline demand in the US reached its highest level since November, the Energy Information Administration said on Wednesday. That helped support the market as US drivers account for around a tenth of global oil demand, “making the upcoming driving season a pillar of the recovery in global demand growth,” ANZ analysts said in a note.

All eyes are now on the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, set to meet on June 1, where they are expected to discuss whether to extend voluntary oil output cuts of 2.2 million barrels per day.

“The market is also tentative about taking an aggressive positioning ahead of next week’s OPEC meeting, where supply policy will be discussed,” ANZ analysts added. 


Oil creeps back up after three days of losses

Oil creeps back up after three days of losses
Updated 23 May 2024
Follow

Oil creeps back up after three days of losses

Oil creeps back up after three days of losses

Oil prices crept up on Thursday, clawing back some of the previous three days’ losses.

The gains were made despite the US Federal Reserve entertaining a further tightening of interest rates if inflation remains sticky, a move that could hurt oil demand.
Brent crude futures were up 92 cents, or 1.1 percent, at $82.82 a barrel by 1317 GMT. US West Texas Intermediate crude futures were 97 cents, or 1.3 percent, higher at $78.54. Both benchmarks fell more than 1 percent on Wednesday for their third straight day of losses.

Saudi crude exports
Saudi Arabia’s crude exports reached 6.41 million barrels per day in March, according to an analysis from the Joint Organizations Data Initiative.
This figure increased by 96,000 bpd, or 1.52 percent, compared to the previous month, marking a nine-month high. Furthermore, the data indicated that the Kingdom’s crude production fell to 8.97 million bpd, reflecting a monthly decrease of 0.42 percent.
This can be linked to the voluntary oil production cuts adopted by members of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+. Saudi Arabia announced in March the extension of its 1 million bpd cut, initially implemented in July 2023, until the end of the second quarter of 2024.
The Ministry of Energy said that the Kingdom’s production will be approximately 9 million bpd until the end of June.
Meanwhile, refinery crude output, representing the processed volume of crude oil yielding gasoline, diesel, jet fuel, and heating oil, fell by 4 percent compared to the previous month, reaching 2.56 million bpd, according to JODI data.

 

 


IMF demands Pakistan secure parliamentary approval on reforms for loan agreement— official

IMF demands Pakistan secure parliamentary approval on reforms for loan agreement— official
Updated 23 May 2024
Follow

IMF demands Pakistan secure parliamentary approval on reforms for loan agreement— official

IMF demands Pakistan secure parliamentary approval on reforms for loan agreement— official
  • Government will present “prior actions” needed to secure IMF loan in federal budget next month, says finance ministry official 
  • Leading economist says Pakistan left with no option but to secure IMF bailout to meet external financing needs of $80 billion 

ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to seek parliamentary approval on major economic reforms related to the energy, power, tax sectors and on the privatization of state-owned enterprises (SOEs) before starting formal talks for another loan program, a finance ministry official said on Thursday. 

Facing low foreign exchange reserves, currency devaluation and high inflation, Pakistan last month completed a short-term $3 billion IMF program that helped stave off a sovereign default. However, the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term program with the global lender. 

An IMF mission reached Islamabad last week to negotiate with Pakistani authorities for a fresh bailout program, holding talks with officials on reforms in key economic sectors. The mission is wrapping up its visit today, Thursday, without reaching any staff-level agreement with Islamabad. 

The government would present the economic reforms demanded by IMF or “prior actions” in parliament in the Finance Bill 2024-25 likely to be presented on June 7, the finance ministry official with knowledge of the negotiations, said on condition of anonymity. 

“The IMF has suggested authorities to get parliamentary approval for the new loan program’s targets and conditions before initiation of the formal talks,” the official told Arab News. 

“In fact, these are the prior actions that Pakistan is required to take care of before reaching a staff-level agreement with the Fund for the new bailout package.”

The international lender has urged Islamabad to overhaul its SOEs and introduce tax, energy and power reforms. Pakistan has had to take painful measures in line with the IMF’s demands since 2022, which included hiking fuel and food prices. 

The finance ministry official said the government intends to introduce key reforms in the energy and power sectors in line with the IMF’s demands, besides broadening the tax base through progressive initiatives. 

“The government will take all parliamentary parties into confidence over the digitalization of the Federal Board of Revenue and the privatization of the SOEs,” he added. 

Sajid Amin, a senior economist and deputy executive director at the Sustainable Development Policy Institute (SDPI), said the government had “no option but to secure the IMF loan program.” He said the IMF’s program was critical in helping Pakistan meet its external financing needs of around $80 billion in the next three years. 

“The IMF wants political ownership of the loan program and that’s why it is pushing the government to get all the targets and conditions approved by the parliament,” Amin told Arab News.

“The biggest challenge for the government is to convince the coalition partners and opposition over its reforms agenda to secure the IMF loan,” he said. 

Amin warned the upcoming IMF program would be the “toughest” one for the government as it would not be easy for it to complete it.