Dash Venture Labs: Our Weekly Picks (Issue No.49)

1. Entrepreneurship/Startups

Huawei Cloud unveils startup programme for SMEs to go digital

Working with regional partners, Huawei Cloud has launched a Startup Programme for the Middle East, Central Asia and Africa to aid SMEs to go digital. The initiative provides SMEs in these regions with Huawei cloud credits, technical support, talent development training, and business resources to drive their growth.

The Huawei Cloud Startup Programme was launched on the sidelines of the Huawei Cloud Summit Middle East & Africa 2023 in Dubai. Under the theme of 'Inspire Innovation with Everything as a Service', the Summit brought together over 300 government leaders, cloud-native industry experts, and customer representatives from the Middle East, Central Asia, and Africa to explore how to make the best out of cloud and the vital role of cloud in driving digital economy growth in the region.

The programme demonstrates Huawei's commitment to building a regional startup ecosystem to empower 1000 startups in the region to innovate and grow on Huawei Cloud by 2025.

UAE, Saudi Arabia, and Qatar Rank Among Top 6 Emerging Markets Globally: Kearney Report

The United Arab Emirates, Saudi Arabia, and Qatar have been ranked among the top six emerging markets in the world by global management consulting firm Kearney.?The UAE has bagged the third position after China and India, followed by Qatar and Saudi Arabia in the fourth and sixth positions, respectively, in Kearney’s ‘2023 FDI Confidence Index’ report. Thailand is in the fifth position in the rankings.

This is the first time Kearney has listed the rankings of 25 emerging markets in the world in its FDI Confidence Index report. This, the firm believes, will give investors an insight into the emerging markets of the present and for the next three years.?The three Middle Eastern countries have received the highest optimism from investors among the emerging markets, indicating the growing trust in the economic reforms of these countries (as per the report’s Investor Optimism Index).

Dubai Culture to support entrepreneurs at Al Quoz Creative Zone incubator programme

Dubai Culture and Arts Authority (Dubai Culture) has revealed the Al Quoz Creative Zone incubator programme taking place from 11 April to 17 May 2023 with a wide range of workshops and activities aimed at supporting entrepreneurs and talent and enhancing the strength of the cultural and creative industries in Dubai. During April and May 2023, Al Quoz Creative Zone will witness the incubator programme that includes ten varied workshops that enable creatives and entrepreneurs to present and introduce their ideas, and discuss their project plans with a group of experts who will shed light through specialised workshops on methods of designing business plans and creative thinking, how to turn ideas into successful commercial projects, the process of identifying target audiences, and choosing partnership models, among others.

In May and September 2023, the zone will also witness the ‘Makers’ Exchange’ with the goal to enrich the experience and knowledge of members of the creative manufacturers’ community, deepen communication between them, benefit from activities and present global best industry practices. As well, it is meant to identify manufacturer needs by organising field visits to their sites to see their working methods and their implementation of project plans.

Startups highlight future of green economy in open dialogue on collective responsibility and sustainability

In an open dialogue session titled "The Conscious Council: Our Collective Responsibility," hosted by the Sharjah Ramadan Majlis 2023 at the Sharjah Research, Technology, and Innovation Park (SRTIP), business leaders and heads of companies discussed the importance of environmental sustainability and Sharjah's achievements in this sector. Participants highlighted Sharjah's innovative projects at the local and international levels to manage waste, reduce carbon dioxide emissions, and convert it into energy, while noting the changing customer trends towards environmentally-friendly products and services, and the rising global awareness of the importance of investing in green economic sectors.

On the sidelines of the majlis, Emirati startup accelerator Sheraa showcased several promising startups such as Manhat, which provides sustainable water and floating farm solutions, and Palmade, a startup that produces biodegradable cutlery made from date-palm trees. Cycled Technologies AS and Fortyguard were also featured, offering smart waste management and recycling solutions and cloud-based AI tools to provide personalized temperature insights.

Abu Dhabi's Hub71 startups raised $1bln, created over 900 jobs

Startups onboarded by Hub71, Abu Dhabi’s global tech ecosystem, raised almost AED4 billion ($1 billion) collectively by the end of 2022 in venture capital and have created more than 900 jobs since its inception.

The startup ecosystem increased its community by 102% to more than 200 startups in 2022 with 51 new early-stage companies relocating to the UAE’s capital to scale exponentially, according to Hub71's Impact Report that covered its activities from January to December 2022. Hub71’s pool of investors range from Mubadala Investment Company to more than 30 VC firms to family offices and commercial partners. Nine out of the 51 startups onboarded by Hub71 in 2022 raised more than AED36.7 million ($10 million) in funding each, reflecting AED575 million ($156.7 million) collectively.

In 2023, Hub71 is broadening its reach into specific technology subsectors by launching Hub71+ specialist ecosystems dedicated to unlocking the potential of technologies including Digital Assets, ClimateTech and BioTech.

2. Technology

Rise Of Saudi Arabia As A Tech Hub: Vision 2030 in Action

Saudi Arabia’s push to diversify its economy away from oil and become a tech hub is making the world sit up and take notice. It all begins with Vision 2030—an elaborate plan to diversify Saudi Arabia’s economy by placing a focus on technology, education, infrastructure, tourism, and recreation.

The NEOM city and the Line are two of the interesting shifts the region has been moving towards recently. Credit rating agency Moody's rating outlook has changed from stable to positive for six of Saudi Corporates of which PIF was one.

This change in rating is in line with several of the initiatives, investments, and changes made in Saudi Arabia, particularly significant for PIF. Factors taken into account for this change in the rating include the quality of the fund's investment portfolio, and assets under management, along with the sustainable growth of the returns of the fund, sector diversification, and investments across sectors locally and internationally.

Zero Two: Digital assets infrastructure firm launched in Abu Dhabi

?Zero Two has launched to cater to the rapidly increasing interest in Web3 technology and its ecosystem. The Abu Dhabi digital assets infrastructure firm aims to become a trusted partner to companies seeking to capitalise on the broad innovative scope and transformative potential the technology offers. The company’s services range from developing power infrastructure to sourcing and testing latest generation technologies, to building and operating data centres, and providing digital assets management services.

As the digital economy continues to mature, digital assets have the potential to increase visibility, transparency, coordination, and information sharing across company boundaries through various applications, thus promising to address structural challenges and enhance operational efficiency. Zero Two was created to develop, operate and invest in best-in-class technologies accelerating and supporting the digital asset and Web3 ecosystem in the region, which comprises concepts such as decentralization and token-based economics.

Saudi Super App Startup ToYou Hires Moelis to Help Raise Funds

Saudi Arabia’s ToYou, a startup that provides a range of services from ride hailing to food delivery, has hired Moelis & Co. to help raise funds to fuel the super app’s growth. Founded in 2019, ToYou started with a main focus on food delivery, but has added more features since, including a buy-now-pay-later service earlier this year. The Riyadh-based company is seeking to compete against other regional super apps, including Uber Technologies Inc.’s local unit Careem and Saudi sovereign wealth fund-backed Noon.com.

Despite increasing headwinds for the global technology sector, Saudi and a number of regional tech firms have continued to attract significant investments. Saudi startups raised $359 million last quarter, 13 percent more than the same period in 2022, and outperformed peers in the United Arab Emirates for the first time, according to data from Magnitt.

UAE and Saudi Arabia at the forefront of the MENA region’s AI revolution

?With the UAE and Saudi Arabia in the lead, the MENA region is making significant moves in the artificial intelligence market. According to firm Research and Markets findings, the MENA region's AI market is expected to grow from $500 million in 2020 to $8.4 billion by 2026.

The findings showcase that the market for advanced technology will observe a compound annual growth rate of 47.8%, led by Saudi Arabia and the UAE as key markets. Business leaders also believe AI is vital for their growth in the future- according to a study by global consultancy firm Proviti Middle East, more than 80% of CEOs in the region believe the technology is critical to the future of their businesses. Over 70% of them are investing in the booming sector. Middle East need to invest in AI governance and develop ethical frameworks for using AI. An example is UAE's initiative to release its AI Ethics – Guidelines and Principles in December 2022, followee on (and learn about) upcoming natural calamities in the kingdom.

Egyptian start-up Technopolitan looks to Saudi Arabia to fill revenue gap

In 2020, the co-founders of Egyptian start-up Technopolitan saw an opportunity in the global rise in demand for remote working due to the Covid-19 pandemic. That led them to set up the property technology start-up, which has transformed underutilised spaces in Cairo, such as club houses and restaurants, into flexible work environments that can produce recurring revenue and footfall.

Technopolitan is also building its own longer term co-working spaces, branded as Copolitan, and offering technology services to companies through a third line of business, Spaceware. The global PropTech market, referring to the use of technology and innovation within the real estate industry, is expected to grow to $86.5 billion in 2032 from $18.2 billion in 2022, according to Future Market Insights.

Scalo Technologies moves HQ to UAE, plans to invest $100 million in Mena startups

Tech venture company Scalo Technologies has established its headquarters in Dubai, in a strategic move to identify and guide startups with the potential to enter global markets. Scalo intends to invest $100 million in promising startups over the next three to five years and sees Dubai as the perfect international hub to drive its plans in the tech and gaming sectors.

Set up in Singapore in 2020, Scalo chose to base its operations in Dubai in view of the emirate’s high level of business activity, growing economy, and strong government initiatives to attract entrepreneurs and professionals from across the globe. Scalo Technologies has a wide variety of prospective investments in the pipeline this year, including game developing and publishing companies, fintech apps, B2B tech and AI companies. Having earmarked $100 million for investment in promising startups over the next three to five years, Scalo estimates that around 50% of this will be in MENA-based tech and AI companies.

BOTIM is integrating Arabic ChatGPT into its app

?The UAE-based tech firm Astra Tech is integrating Arabic ChatGPT into its BOTIM app, a messaging and voice-over-internet protocol solution for the MENA region, as a pilot test so users can interact with the ability to use generative AI when it comes to international money transfer, bill payments, government services, and weather checks.

Later, the tech firm aims to add stores and healthcare services to the voice-calling app. Initially, BOTIM GPT will be available to a select group of its 100 million-plus user base before gradually expanding. The company is leveraging the Mohamed bin Zayed University of AI Artificial Intelligence’s (MBZUAI) expertise in natural language processing (NLP) to enable enhanced services for its customers. The Middle East is poised to experience a 20% annual growth rate in AI by 2030, and the UAE is set to lead the region with an average annual contribution of nearly 35%.?

3. Funding Activity

Saudi Arabia’s Savvy Games acquires Scopely for $4.9 billion

Saudi Arabia-based gaming platform Savvy Games Group, owned by the country's sovereign wealth fund, the Public Investment Fund (PIF), has acquired California-headquartered game developer and publisher, Scopely for $4.9 billion. The acquisition is intended to strengthen Savvy’s ability to “deliver new and exciting products” for the global gaming community.

In February, Savvy invested $265 million in Chinese tournament operator VSPO. Launched in January last year, Savvy plans to invest $38 billion with the aim of turning the kingdom into one of the world's major gaming hubs. This investment further supports Savvy’s strategy to drive the growth of the global games industry through long-term strategic investments. Savvy’s investments are made to strengthen the core competencies of its partners, enabling them to focus on delivering stand-out services and experiences for their communities and creating new opportunities for progression.

SVC launches $80 million VC fund to back fintech in KSA

Saudi Venture Capital Company (SVC) has launched an $80 million Investment in Fintech VC Fund, in partnership with the Capital Market Authority (CMA) and the Financial Sector Development Programme (FSDP).

The new VC fund will focus on funding the fintech sector in Saudi Arabia, which witnessed a growth of 167 per cent.?in 2022 compared to 2021. SVC is a subsidiary of SME Bank founded in 2018 as a government investment company. It aims to stimulate and sustain financing for startups and SMEs from pre-Seed to pre-IPO by investing $1.6 billion through investment in funds and co-investment in startups. SVC aims to stimulate and sustain financing for startups and SMEs from pre-Seed to pre-IPO by investing $1.6 billion through investment in funds and co-investment in startups. The "Investment in Fintech VC Funds" product launched by SVC, as part of the Investment in Fund Program, stimulates the establishment of VC funds in the financial technology (FinTech) sector in accordance with the requirements of CMA.

Shaker Group acquires 10% stake in Cashew

?Al Hassan Ghazi Ibrahim Shaker Co. (“Shaker Group”),?Saudi Arabia’s leading importer, manufacturer and distributor of Air Conditioners and Home?Appliances, has announced today the completion of a 10% investment in Cashew Arabia Company for Information Technology (“Cashew KSA”), the subsidiary of Cashew Payments Holding Limited?(“Cashew Holding”). The investment follows the Memorandum of Understanding (MoU) between the two companies in June 2022 and was made through its subsidiary Shaker Innovative Investments Company which is 90% owned by Shaker Group.?

Through this strategic investment, Shaker Group aims to strengthen its e-commerce and retail platforms and unlock significant potential in the segment as consumers increasingly adopt digital?financing solutions and e-commerce continues to experience sustained growth in the Kingdom, projected to reach $11.52 billion in 2023 (statista*1).?

Mena startups raised $247 million in March 2023, pushing Q1 funding to $1.1 billion

Startups in the Middle East and North Africa region (Mena) raised $247 million across 67 deals in March 2023, a decline of 67 per cent month-on-month (MoM), and a 17 per cent dip from a year-ago.

The total funding raised by startups in Q1 surpassed the $1.1 billion mark in March 2023, marking a 17 per cent increase quarter on quarter. Saudi Arabia was the top destination for startup investment last month, scooping up more than half of the total deal value in the region with $175 million across 20 deals. The rise was largely attributed to the $150 million raised by buy now pay later (BNPL) startup Tamara in a debt financing round from Goldman Sachs, which alone represented 64 per cent of the total funding value recorded last month. The UAE was a distant second with $59 million raised across 18 deals. Notable deals include Qlub's $25 million Seed round and COFE's $15 million round led by Wa'ed Ventures as well as Almentor's $10 million pre-Series C round.?Bahrain, Kuwait and Morocco ranked third, fourth and fifth respectively.

?Riyadh Valley Company Invests in Stv'S Total Growth Platform

?Riyadh Valley Company (RVC), the investment arm of King Saud University, has invested in STV's venture capital (VC) fund Total Growth Platform. The funding amount remains undisclosed. STV is one of the leading technology VC firm in the Middle East and North Africa (MENA) region. With the fresh capital, RVC aims to aid the development of local tech and innovation and enable the commercialisation of innovation in universities and tech hubs across the region.

The $150 million Total Growth Platform was launched earlier this year at the LEAP 2023 tech conference. Its objective is to accelerate the growth of regional technology ventures. The platform is expected to offer founders with access to a range of funding solutions, equity and debt. The growth in MENA venture capital funding crossed $3 billion in 2022, added the release.

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Disclaimer:

This newsletter is prepared by Dash Venture Labs and provides general information only. The information and opinions in the report constitute a judgment as at the date indicated and are subject to change without notice. The information and opinions contained in this report have been compiled or arrived at from sources believed to be reliable in good faith, but no representation or warranty, express, or implied, as to their accuracy, completeness or correctness does also not warrant that the information is up to date. Any reference to third party research material or any other report contained in this report represents the respective research organization’s estimates and views and does not represent the views of Dash Venture Labs and its officers and employees do not accept any liability or responsibility whatsoever with respect to its accuracy or correctness.