The Kingdom of Saudi Arabia has unveiled more than $6.4 billion worth of investments in future technologies and entrepreneurship in a move that will boost the country’s move into the digital economy in a post-oil world.
The tremendously ambitious investment plan was revealed by the Saudi Minister of Communication and Information Technology Abdullah Alswaha, on the sidelines of the world’s largest tech conference LEAP, which was held in the capital Riyadh in February.
This comes in the implementation of the Saudi Vision 2030, which was launched by His Royal Highness Crown Prince Mohammed bin Salman. The revolutionary vision aims to boost non-oil growth and reduce dependence on crude oil, with technology being at its forefront.
One of the major announcements during LEAP was the official launch of Saudi Aramco Venture’s $1 billion fund dubbed Prosperity7. The venture capital fund was de-facto launched for almost a year now by the company’s chief technology officer Ahmad Al Khowaiter.
Al Khowaiter explained that using Saudi Aramco’s vast resources and its far-reaching footprint across geographies and sectors, the Prosperity7 venture capital fund can showcase unparalleled opportunities for scalability and impact.
He added that Prosperity7 would establish stronger foundations for success for its portfolio companies.
Moreover, NEOM Tech and Digital Company announced a $1billion investment in future technologies.
These investments would be directed into the launch of the world’s first cognitive metaverse, XVRS that will serve residents and visitors of the smart giga-project.
NEOM also revealed a new personal data management platform called M3LD, that gives back control of data to the user.
“The future will be defined by cognitive meta cities … it is a vision focused on experiences rather than scale,” Joseph Bradley, chief executive of Neom Tech and Digital Company, said.
“XVRS puts human needs at its core, it is designed to give people more time, space and enhanced safety. M3LD, meanwhile, will place data ownership back in the hands of users and restore trust in the data economy.”
Nevertheless, Saudi Telecom Company (stc), announced the launch of a major digital hub “MENA Hub” for regional connectivity and infrastructure in the Middle East and North Africa with $1 billion of investments.
stc said that the new hub ensures the leading position of Saudi Arabia across the ICT sector and stc’s role as the leading player in the region, and aims to enable the Kingdom’s economic growth and gross domestic product.
The hub will link three continents, benefiting from the strategic location of the Kingdom, and promoting investment in international communication services and data centers. The hub will include the installation of several highly efficient cables to meet the future requirements of cloud services, by investing in an advanced fiber optic network that ensures continuous availability of services.
“stc is committed to being the digital pioneer to achieve KSA Vision 2030 by developing digital business so the Kingdom will be the regional hub and link the three continents. In addition to attracting direct and indirect foreign investments and stimulating more local investments. Hence, our goal is to build this property for the region and turn our goals into reality”, said Olayan AlWetaid – stc Group CEO.
“These investments and initiatives are a manifestation of the kingdom’s push towards the growth of the digital economy for the greater good of people, the planet and the prosperity of the MENA [the Middle East and North Africa] region,” Abdullah Alswaha, Saudi Minister of Communications and Information Technology, said.
“They mark the next level of growth for the digital economy in Saudi Arabia, the MENA region’s largest technology and digital market,” he said.
The kingdom’s technology market is estimated at more than $40bn, according to official data. New investments are part of the country’s plans to become an innovation-based economy.
Saudi Arabia is the regional leader for technology talent, with more than 318,000 jobs in the technology sector in the kingdom, Alswaha said.
Furthermore, The Arab world’s largest economy is also home to some of the largest investments in cloud technology, with leading hyperscale cloud providers including Google, Alibaba, Oracle and SAP investing more than $2.5bn in the cloud in the kingdom.
The technology conference included the launch of Garage, a platform for start-ups, investment and entrepreneurship by King Abdulaziz City for Science and Technology.
It aims to create a full-service environment for local and international start-ups to help them grow to become leading technology companies.
“The Garage is inspired by the humble beginnings of some of the biggest companies in technology today, and aims to provide everything that start-ups need to grow their ideas, to become the next global technology giants,” said Munir Eldesouki, president of KACST and head of the Research, Development and Innovation Authority foundation team.
Singapore-based logistics and supply chain company J&T Express Group announced an investment of $2bn with venture capital fund eWTP Arabia Capital and other partners.
The investment will allow J&T to establish its Mena headquarters in Riyadh, and set up a network of smart logistics and distribution facilities that will extend the kingdom’s reach as the regional centre for advanced logistics.
“The logistics infrastructure and facilities that will be established through this partnership will not only accelerate the growth of distribution and cargo in Saudi Arabia but also make the kingdom a leading centre for advanced logistics services, president of the kingdom’s General Authority of Civil Aviation Abdulaziz Al Duailej said.
“In the next 10 years, together with eWTP Arabia Capital and other strategic partners, J&T will invest in the most advanced hardware and software equipment … train the most outstanding professional team, build the largest intelligent logistics industrial park … serve the entire regional market and promote the comprehensive development of the local technology-driven industrial economy,” said Jet Lee, founder and chairman of J&T Express Group.
PIF leading Saudi tech investments since 2019
Since the establishment of the Saudi Public Investment Fund (PIF), one of the world’s largest sovereign wealth funds, it took on a mission of focusing on tech investments.
PIF investments are in line with the Kingdom’s moves towards achieving the goals of the Saudi Vision 2030, which can be seen in preferring investments into sectors such as technology, mobility, and especially future mobility, tourism and entertainment.
The PIF’s stock holding in Uber Technologies has also increased to about $4 billion in Q1 2020, compared to $3.7 billion in Q4 2020, as the ride-hailing company’s shares gained value during the period.
The Saudi sovereign fund was one early backer in the ride-hailing company, as it purchased a $3.5 billion stake in Uber in 2016, three years before its IPO in 2019.
That was not the fund’s only move, PIF has invested more than $7.7 billion building a diverse portfolio of stakes in some of the top corporates across the globe.
The list includes Uber, Facebook, Boeing, Disney, Activision Blizzard, and Marriott International.
Governor of the Saudi Public Investment Fund Yasir Al-Rumayyan revealed in early 2021, that the fund will invest one trillion riyals over the next five years in several projects.
“The Public Investment Fund is among the fastest-growing sovereign funds, and it has become a fundamental pillar for the sustainability of the Saudi economy,” Al-Rumayyan said at the regular government communication conference.