Come mid-2015, tech startups started becoming more and more prominent in the portfolios of the Sheikhs although startups have been around for much longer than that.
According to Nebu K Abraham, managing director and cofounder of Cocoon Ventures, the startup bug was caught around the same time it did in India, i.e. around 2010.
“The startup rise is progressing from the 2010 – 2012 period, countering political uncertainties and the instability in certain places. Now growth has outpaced those in many global and regional markets,” he said.
Although Cocoon Ventures was founded in 2010 it became most active around November 2015.
Not just Cocoon Ventures, there’s a clear trend of tech startup investments picking up across the ME region starting late 2015. And out of the region, the Saudi and Emirate of Dubai are seeing the most action.
Take a look at Cocoon Ventures. Not only is the VC firm based in Dubai, a majority of their investments (around 8) are early stage Dubai startups. The best funded startups in the ME region are based in Dubai. That too after late 2015. Careem Networks reached unicorn status in late December 2016 while Noon.com announced in late 2016 was a unicorn from its seed funding stage.
There’s a reason why SoftBank was able to woo prince Mohammed bin Salman al-Saud of Saudi to start investing in new technology.
The Saudi Vision 2030 is the Saudi Arabian government’s mandate announced in April 2016 to reduce the nation’s dependence on oil and drive economic growth through other sectors.
In October 2016, the sovereign wealth fund of Saudi, called the Public Investment Fund promised to contribute 45 billion dollars to the titanic 100 billion dollar Vision Fund, the biggest war chest tech startups have ever seen.
Prior to this, the same sovereign wealth fund from Saudi invested 3.5 billion dollars in Uber by mid-2016. The single largest investment ever made in a privately held company. The sovereign wealth fund of Qatar has a stake in Uber as well.
In December 2015, Saudi Arabia’s prince Alwaleed bin Talal was involved in making investments worth over a 100 million dollars in Lyft, a competitor to Uber.
To all the naysayers who don’t believe that the Middle East and especially the Saudi is serious about investing in tech startups, and that it all changed in 2015, here’s one more final piece of evidence: Prince Alwaleed made his initial investment in social media tech company, Twitter back in 2011 (a company he still firmly believes in, FYI).
He doubled his stake to about 5 percent, an investment worth a billion dollars. When?