RIYADH, 17 November 2005 — The Saudi Arabian General Investment Authority (SAGIA) and Intel Capital, Intel’s venture investment program, yesterday announced a cooperative effort to establish an independent $100 million venture capital investment company (fund) to invest in technology companies located in, or having a connection with, Saudi Arabia.
The fund will invest in growing technology companies developing innovative value added services and software and employing new business models. The investments will focus on early and growth stage companies, emphasizing entrepreneurship and continued growth of the ICT industry in the region.
At a ceremony in Riyadh on Tuesday, Intel chairman, Dr. Craig Barrett, and Governor Amr A. Al Dabbagh of SAGIA, signed a Memorandum of Understanding (MOU), outlining Intel’s and SAGIA’s intention to work together to help establish this new Saudi fund and help grow established ones. Intel will serve as a consultant to this fund and will also have the option of co-investing in all the investments made by the new fund.
Separately, Intel announced previously its own $50 million fund to invest in leading technology companies in the region.
SAGIA played a central role in helping establish the focus of the fund and will act as a liaison to the Saudi Arabian government with respect to foreign investments that such a focus is bound to attract. Although neither SAGIA nor Intel Capital will directly invest in the fund, they are committed to working with it on an ongoing basis.
“The signing of the MOU with Intel Capital heralds a new era for ICT investments in Saudi Arabia as the industry will be witnessing a great growth. Coupled with the engagement of international companies like Intel, the Saudi ICT market will reach international standards,” commented Al-Dabbagh.
“Intel has a history of pioneering successful technology investments in developing markets to foster growth and innovation,” said Barrett. “We look forward to helping establish a local, dedicated technology investment fund that will help grow the IT industry in the Gulf region.”
SAGIA has been in talks with Intel for the past six months laying the groundwork for yesterday’s groundbreaking signing. Given its outlook to create focused, yet differentiated and segmented strategic business units, the SAGIA-Intel agreement falls in line with such a strategy. SAGIA offers a comprehensive investment facilitation package to all investors seeking opportunities in any of the economy’s open sectors.
The long-term goal of SAGIA is to see to the creation of other, similar industry-focused VC funds. The signing with Intel is hoped to be the first such agreement with global ICT players.
“VC funds were key drivers of the technology boom in the Western world and I am confident that this will play a major role in stimulating the ICT sector in Saudi Arabia. I am also hopeful that other VC funds will now be created and we will give them equal support,” concluded Al-Dabbagh.
