Saudi Arabia's massive Public Investment Fund has become active in tech startup investing.
Over the last year, the Kingdom of Saudi Arabia announced a number of economic diversification initiatives to lessen its economic dependence on oil. The Saudi government intends to take the oil titan Saudi Aramco public, and turn the business from “an oil producing company into a global industrial conglomerate,” according to the Kingdom’s Vision 2030 economic plan.
Additionally, the government intends to turn the country’s Public Investment Fund, already one of the world’s largest sovereign wealth funds into a major tech investor. As part of that drive, it has announced that the Public Investment Fund would partner with Japan’s SoftBank Group in order to create a $100B tech investment fund in October 2016. Separately, SoftBank Group has pledged to invest $50B in US companies, as part of a handshake agreement between SoftBank CEO Masayoshi Son and then President-elect Donald Trump.
Given the rising profile of Saudi investors, we used the CB Insights Business Social Graph, which maps relationships between investors and target companies, to map out a network of 25 Saudi Arabian investors as well as their private market investments between January 2012 and January 2017. We include investors, both public and private, that are headquartered within Saudi Arabia.
We chose to exclude investors that were headquartered in other countries (albeit with a connection to Saudi Arabia), or investors that were jointly owned by entities from other nations in addition to Saudi Arabia-based owners. Although we recognize that other investment entities located in, or related to Saudi Arabia exist, such as AlTouq Group, Rajhi Invest, and KBW Investments, we excluded such entities from our analysis due to lack of publicly available information.
In the graph below, investments are denoted by green lines, acquisitions by orange lines.
Note: Hellofood is listed as both a company (in plain text) and an investor (marked with the company’s logo). Raed Ventures also participated in deals to Crowd Analyzer, Fetchr, and foodics, however these companies were not featured in the image below due to a lack of publicly available information on those deals. Although INET may have additional investments, they were not featured in the image below due to a lack of publicly available information.
Click on the image to enlarge.
Key insights from the Business Social Graph image above:
- Saudi Aramco has already invested beyond oil: Saudi Aramco Energy Ventures (SAEV), the venture arm of Saudi Aramco, is the second most active Saudi investor, with a total of 20 investments that have taken place between January 2012 and January 2017. Moreover, SAEV has participated in deals in industries beyond oil, such as those involving Siluria Technologies, MAANA, and Wearable Intelligence. Siluria Technologies is a producer of natural gas-related and clean energy-related technologies, while MAANA and Wearable Intelligence are focused in the big data analytics, and wearable technology spaces, respectively.
- Clean energy: Of the 24 deals pertaining to companies in the energy, oil, and drilling space, at least 12 deals relate directly to clean or alternative energy companies. The National Petrochemical Industrial Co. also participated in financing to the company Siluria Technologies (described above). The Riyadh Valley Company has participated in rounds of financing to 3 clean-energy related companies: a $12.5M Series C round in Q2’16 to Sol Voltaics, a solar efficiency energy capture and storage company; a $14M Series B round in Q3’15 to GLM, a Japanese electric car company; and, a $36.6M Series D round in Q2’15 to BeamReach Solar, a solar commercialization company. Additionally, the KAUST Innovation Fund, based out of the King Abdullah University of Science and Technology, has participated in two rounds of financing totaling $1.2M to NOMADD Desert Solar Solutions, which offers an automated solar panel cleaning robotic device.
- Ride-sharing: Of the 70 deals related to tech between January 2012 and January 2017, 16 deals have been directly connected to companies in the mobility industry. Saudi investors have shown a particular affinity for ride-sharing companies. Both the Saudi Telecom Company and the Al-Tayyar Travel Group participated in a $350M Series D round of financing in Q4’16 to Careem Networks, a newly minted ride-sharing unicorn, and competitor to Uber in the Middle East and North Africa (MENA) region. The Public Investment Fund of Saudi Arabia financed a $3.5B private equity round to Uber in Q2’16, one of the largest investments ever in a privately held startup. Additionally, the Kingdom Holding Company participated in a Series F and other transactions to Lyft, in deals totaling more than $497M.
- Private jets: Alongside Jay-Z, the Saudi Royal Family has participated in multiple financing rounds, totaling $155M in aggregate to the unicorn JetSmarter, a worldwide mobile marketplace for private jets.
- Going local: Beyond investments in global tech companies, some Saudi investors have focused the majority of their efforts on local tech investments in the MENA region. Mobily Ventures, the venture arm of Etihad Etisalat (dba Mobily), invested in 4 MENA-based companies between 2014 and 2015, including United Arab Emirates-based mobile delivery app Fetchr, and Saudi Arabia-based online food ordering platform Hellofood. All 30 deals in which seed investor Flat6Labs Jeddah participated, pertain to companies based in Saudi Arabia. Flat6Labs Jeddah was the most active investor on our graph.
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