Saudi Arabia launches 'National Semiconductor Hub' to drive industry localization – Arab News
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RIYADH: At least 50 semiconductor design companies will be established in Saudi Arabia by 2030 after a new initiative was launched to develop the sector in the Kingdom.
This undertaking will be supported by a deep tech venture capital fund that exceeds SR1 billion ($266 million) as part of a new National Semiconductor Hub.
The intiative will also provide access to SR150 million in support products from Saudi Arabia’s National Technology Development Program, which is integral to Vision 2030.
Unveiled during the third edition of the Future of Semiconductors Forum in Riyadh, the hub is a strategic effort to establish a semiconductor design industry ecosystem in the Kingdom, potentially worth upward of SR50 billion.
This initiative is part of Saudi Arabia’s broader effort to incentivize and attract talent to the sector. It emphasizes innovation over fundraising by launching a deep tech venture capital fund exceeding SR1 billion and investing in the industry.
Moreover, the hub seeks to attract 25 world-class experts in the field through the premium residency program and aims to train 5,000 engineers in semiconductor design by 2030.
Following the global shortages of semiconductors in the wake of the 2019 epidemic, the sector’s importance was underscored, prompting the Kingdom to embark on a strategy to address it.
Speaking during the forum, Ross Jatou, president of the Public Investment Fund subsidiary Alat Semiconductors, underscored the importance of the intersectional nature of this venture, saying: “I argue that future is where you integrate many technologies together that in the past were considered very different. Now this is pretty sophisticated, and sometimes we take it for granted, it’s in everybody’s phone and everybody’s car, and we have it everywhere. Alat will not be able to do this alone.”
He added: “As the saying goes, it takes a village to raise a child, and luckily, with the National Semiconductor hub, with the help of KACST (King Abdulaziz City for Science and Technology) and KAUST (King Abdullah University of Science and Technology) we’re going to make that happen. The Silicon Valley took decades to build, with the national semiconductor hub, we will be able to accelerate this by working together.”
The two-day forum at KACST brought together experts and stakeholders from academia, industry, and government to discuss critical topics that will shape the future of the semiconductor industry.
RIYADH: Saudi Arabia is set to raise over $11.2 billion by selling shares in oil giant Aramco to fund its spending plans, after pricing its stock at SR27.25 ($7.27), the company announced.
In a press release, Aramco said that the secondary public offering of 1.545 billion shares, representing approximately 0.64 percent of the company’s issued shares. The final offer price for both institutional and retail investors was set at SR27.25 per share, based on the book-building process results.
The company stated that all shares offered to retail investors would be allocated with a minimum of 10 shares per subscriber, with the remaining shares distributed on a pro-rata basis at an average allocation factor of about 25.13 percent.
The retail offering was fully subscribed, attracting 1,331,915 subscribers. Consequently, 10 percent of the offer shares, excluding shares issued pursuant to the over-allotment option, will be allocated to retail investors, with the remaining 90 percent going to institutional investors, it added.
To cover short positions resulting from any over-allotments, the government has granted the stabilizing manager a “greenshoe” option, allowing the purchase of up to 10 percent of the offer shares at the final offer price.
The company added that this over-allotment option is exercisable in whole or in part until 30 calendar days after trading of the offer shares on the Saudi Exchange begins, expected on June 9, and will cease on July 9.
If the over-allotment option is fully exercised, the offering will comprise approximately 0.70 percent of the company’s issued shares.
Aramco aims to strengthen its global position by maintaining its oil production, expanding its gas production capacity, and integrating its upstream and downstream operations to secure demand for its crude oil.
The company said it is enhancing the resilience and strategic integration of its refining and chemicals portfolios to capture more value across the hydrocarbon value chain and improve the balance of its fuels and chemicals production.
CAIRO: Saudi Arabia-based fintech Simplified Financial Solutions Co. has closed a $10 million seed round led by Sanabil Investments, a wholly owned subsidiary of the Public Investment Fund, and RAED Ventures.
Other participants included anb seed, Rua Ventures, Byld, and KBW Ventures, along with previous investors Khwarizmi Ventures, Seedra Ventures, and Tech Invest Com.
Founded in 2021 by Ahmed Al-Hakbani, SiFi is a business-to-business spending management platform offering smart corporate cards, real-time insights into corporate spending, and automated expense management workflows.
Al-Hakbani, CEO of SiFi, said: “We are thrilled to have closed this significant round and gained the support of such prominent and strategic partners. This funding will enable us to further enhance our offering, deliver even greater value to our customers, and cement our position as the go-to spend management solution in Saudi Arabia,”
He added: “Our aim is to empower stakeholders within companies to make informed decisions at the right time while providing finance teams with the tools they need to effectively enforce company spending policies. By doing so, we aim to help businesses decentralize spending while enhancing control and driving growth.”
This funding will enable SiFi to enhance its offerings and solidify its position as the leading spend management solution in Saudi Arabia.
“What attracted us to SiFi was three-fold: its outstanding team, compelling product offering, and the largely underserved market in Saudi Arabia, as businesses are increasingly recognizing the need for more efficient financial management tools. We look forward to supporting their next phase of growth and helping them capture the opportunity ahead,” a spokesperson for Sanabil Investments said.
MENA startup investment surges in May 2024
Investment in the Middle East and North Africa region saw a significant surge in May, with a total of 40 startups raising $282 million, a 413 percent increase compared to April’s $55 million.
This growth was primarily driven by debt financing, which accounted for nearly $140 million of the total raised, according to Wamda’s monthly report.
Despite this monthly growth, the year-on-year deal value saw a notable decline of 58 percent, dropping from $445 million reported in May 2023 across 39 deals.
UAE’s Property Finder led the investment with a $90 million debt round, followed by Huspy and Keyper securing $37 million and $34 million, respectively, the latter with $30 million in debt financing.
UAE-based startups received the majority of investments, amassing $189 million across 23 transactions.
Saudi startups followed with $56 million over 10 deals, while Egyptian startups secured $24.5 million across four deals, including OneOrder’s $16 million series A round combining debt and equity.
The proptech sector was the top-funded, raising $167.2 million over seven rounds. The fintech sector followed with $32.7 million across 12 startups. The logistics sector also saw significant funding, with $25.3 million secured by three startups.
The agritech sector showed signs of recovery with $23 million raised in May, including $16 million for Iyris’s series A round.
Software as a service startups also rebounded, securing $27 million across three transactions. The region’s venture capital space emphasized later-stage rounds, with $59.3 million raised by five startups at their series A stage and $44 million by four startups at their pre-series A stage. Seed stage deals topped the count with seven deals worth $11 million.
UAE’s GrubTech was the only startup to close a series B round at $15 million, while Saudi Arabia’s SaaS startup Merit raised $12 million in a pre-series B. Up to $42 million went undisclosed regarding stage rounds, with seven startups not revealing their stages.
Business-to-consumer startups comprised 62 percent of total funding, raising $174 million across 13 deals, while B2B startups raised nearly $100 million.
Male founders continued to dominate, securing 89 percent of the total investments. However, there was an increase in deals involving co-founded startups by males and females, doubling to eight deals compared to last month and raising $28.6 million, while female-founded companies secured $800,000.
The venture capital space in the MENA region witnessed significant activity in May, with several new funds launched.
BIM Ventures and Japan’s SBI Holdings introduced a $100 million fund, UAE’s TVM Capital Healthcare launched the $250 million Afiyah Fund LP, and Riyad Capital initiated 1957 Ventures. Saudi Venture Capital committed $30 million to General Atlantic for Saudi startup investments.
Bahrain’s Investcorp closed a $570 million Investcorp Technology Partners V fund, and Shorooq Partners along with Korea’s IMM Investment Global launched a $100 million fund.
Singapore-based Golden Gate Ventures announced a $100 million MENA fund, and Saudi Arabia-based HRtech Qsalary partnered with Itqan Capital for an $80 million investment fund.
In Egypt, Beltone and Microfinanza Italia launched a $2.4 million project to support the startup landscape, and the $3 million Glint Fund II was also introduced.
Additionally, Saudi Arabia’s Kingdom Holding participated in the $6 billion Series B round of Elon Musk’s artificial intelligence startup, xAI, valuing the company at $24 billion.
UAE-based AI startup qeen.ai secures $2.2m pre-seed funding
UAE-based AI startup qeen.ai has successfully raised $2.2 million in a pre-seed funding round led by Wamda Capital, with participation from various international and regional investors, including 10x Founders, Aditum, Dara Holdings, Jabbar Group, Phaze Ventures, and Eureka 460.
Founded in 2023 by Dina Al-Samhan, Ahmad Khwileh, and Morteza Ibrahimi, qeen.ai focuses on providing accessible and autonomous AI solutions tailored to e-commerce businesses.
“We are thrilled to back qeen.ai in their mission to disrupt the e-commerce space in the MENA region,” said Fadi Ghandour, CEO of Wamda Capital and founder of logistics giant Aramex.
He added: “We believe that qeen.ai is well poised to achieve substantial growth and success, as it fulfills a crucial market need by providing businesses with accessible AI solutions that can significantly improve their revenue, thanks to the founder team’s expertise in AI and their deep understanding of e-commerce challenges.”
The newly acquired funds will be utilized to further the company’s mission to simplify intelligent commerce, making AI solutions more accessible and user-friendly for businesses of all sizes.
Fintech company Elevate secures $5m in pre-series A funding
London and Dubai-based fintech company Elevate has secured $5 million in a pre-series A funding round.
Founded in 2021 by Khalid Keenan, Faris Keenan and Youcef Oudjidane, Elevate offers debit cards for online spending and applies standard foreign currency exchange rates when sending money domestically. The company also allows users to transfer money back to their local accounts for a fixed fee.
Elevate aims to provide a financial solution to address common challenges faced by freelance professionals.
The platform facilitates effortless payments from US and international employers and major freelancing platforms such as Upwork, Maqsam, PayPal, Deel, and Toptal.
Elevate claims to have attracted over 150,000 users from Asia and North Africa. The newly raised funds will support the company’s expansion into the Middle East and Africa.
RIYADH: Energy investment in the Middle East is projected to reach approximately $175 billion in 2024, with clean resources accounting for around 15 percent of the total, a new report disclosed.
The International Energy Agency’s analysis highlighted that clean energy investment in the announced pledges scenario is expected to more than triple by 2030 compared to 2024.
The report indicated that by the end of the decade, every dollar invested in fossil fuels in this scenario would be matched by 70 cents going to clean energy.
At present, spending on fossil fuel supply predominates; for every dollar invested in fossil fuels, only 20 cents is allocated to clean energy investment, representing approximately one-tenth of the average global ratio of clean resources to fossil fuel investment.
Five of the 12 countries in the region have set net zero emission targets. The UAE and Oman aim to achieve net zero emissions by 2050, while Saudi Arabia, Bahrain, and Kuwait have set a target for 2060.
Additionally, the UAE has committed to reducing emissions by 19 percent by 2030 from 2019 levels. It also pledged $30 billion in catalytic capital to launch a climate-focused investment initiative at the 2023 UN Climate Change Conference, or COP28.
Furthermore, the region’s power sector holds a distinct opportunity for increasing investment in clean energy technologies, notably for solar.
Harnessing these resources could substantially decrease reliance on both oil and gas in the power sector.
Saudi Arabia, for example, is targeting 130 gigawatts of renewable capacity by 2030, up from less than 5 GW today.
Similarly, projects are underway, including the large Al-Shuaibah Solar Power Plant in Saudi Arabia and the Mohammed bin Rashid Al-Maktoum Solar Park in the UAE.
Various countries have also announced blue and green hydrogen investments and intensified funding for critical minerals.
Saudi Arabia, for instance, has established a $182 million mineral exploration incentive program.
The UAE is also expanding its efforts in the sector, including through a $1.9 billion mining partnership in the Democratic Republic of the Congo and securing new agreements in copper-rich Zambia.
A global shift
Global energy investment is set to exceed $3 trillion for the first time in 2024, with $2 trillion going to clean energy technologies and infrastructure, the report noted.
Investment in clean energy has accelerated notably since 2020, and spending on renewable power, grids, and storage is now higher than total spending on oil, gas, and coal.
As the era of cheap borrowing comes to an end, higher financing costs are holding back certain kinds of investment.
However, the impact on project economics has been partially offset by easing supply chain pressures and falling prices.
For example, solar panel costs have decreased by 30 percent over the last two years, and prices for minerals and metals crucial for energy transitions, especially the metals required for batteries, have also sharply dropped.
Clean energy investments are set to approach $320 billion in 2024, up by more than 50 percent since 2020.
This is similar to the growth seen in advanced economies, which recorded a 50 percent increase, although trailing China, which witnessed a surge of 75 percent in renewable investments since 2020.
The report noted that the gains primarily come from higher investments in renewable power, representing half of all power sector investments in these economies.
Progress in India, Brazil, parts of Southeast Asia, and Africa reflects new policy initiatives, well-managed public tenders, and improved grid infrastructure, it added.
Africa’s clean energy investments in 2024, at over $40 billion, are nearly double those in 2020, the IEA further explained.
Yet, according to the report, much more needs to be done. In most cases, this growth comes from a very low base, and many of the least-developed economies need to be included, with disadvantaged nations facing acute problems due to high levels of debt.
RIYADH: Saudi banks’ real estate loan portfolios reached SR800.5 billion ($213.5 billion) in the first quarter of 2024, a 13 percent increase from the same period last year, the latest official data showed.
Figures released by the Saudi Central Bank, also known as SAMA, revealed that 78 percent of these loans were retail, while the remaining 22 percent were corporate.
Despite constituting the largest share of real estate lending from banks, loans to individuals recorded a slower annual growth rate of 10 percent compared to the 26 percent growth for the corporate sector.
Several factors, including high interest rates, could have dampened individual borrowing due to the increased cost of credit.
In contrast, the rapid implementation of the Kingdom’s giga-projects in line with Vision 2030 has likely spearheaded the rapid growth in corporate real estate lending. These large-scale projects require substantial financing, driving significant demand for corporate loans and accelerating their growth rate.
Additionally, data released by the General Authority of Statistics indicated that residential real estate prices increased by 1.2 percent during the first quarter of the year, while prices in the commercial real estate sector decreased by 0.5 percent.
This difference in price trends likely made commercial properties more appealing and affordable for corporate investors, boosting demand for commercial real estate loans. Conversely, it may have tempered individual borrowers, resulting in a slower growth rate for retail real estate lending.
According to SAMA data, new residential mortgages issued by banks to individuals totaled SR27.44 billion in the first four months of 2024, marking an increase of 2 percent from the same period last year.
Despite making up 67 percent of the new loans at SR18.25 billion, lending for houses fell by 1 percent. In contrast, lending for apartments increased by 9 percent, reaching SR7.6 billion, while land credit grew by 5 percent to SR1.62 billion.
According to a study by PwC, Saudi Arabia has ambitious plans to double Riyadh’s population and attract 9 million people to The Line, a revolutionary urban development project, by 2045.
Many of these newcomers will be expatriates, supported by recent visa reforms. The Premium Residency Program — which offers benefits such as property and business ownership and the right to work without a sponsor — aims to attract highly skilled expats, investors, and entrepreneurs to create jobs and bring in investment.
In a survey conducted earlier this year by global property consultancy Knight Frank, 77 percent of 241 Saudi-based expats expressed a desire to buy property. The primary motivation for real estate purchases in the Kingdom, especially among millennials, was its perceived status as a good investment.
The shift from villas to apartments among the majority of respondents was likely influenced by factors such as the higher costs associated with villas, affordability considerations, and possibly differing cultural preferences compared to Saudi nationals, the firm said.
Additionally, in the wake of the global financial crisis, over-collateralized security and full-recourse financing have become more common, according to Baker McKenzie Research Hub. Borrowers now face stricter requirements, including lower loan-to-value ratios, meaning they cannot borrow as much as they could before the crisis.
SAMA has capped the loan-to-value ratio on residential mortgage loans at 90 percent. This policy aims to balance promoting homeownership with maintaining a stable and sustainable housing market and financial system.
Therefore, according to the research, despite the strong demand for housing, Saudi Arabia’s mortgage finance market is still developing, and consumer lending practices remain strict. This strict lending environment is expected to become even more stringent once the Registered Real Estate Mortgage Law is fully implemented and enforced.
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Thursday, gaining 7.23 points, or 0.06 percent to close at 11,560.39
The total trading turnover of the benchmark index was SR6.45 billion ($1.72 billion) as 70 stocks advanced, while 155 retreated.
Similarly, the MSCI Tadawul Index surged by 4.65 points, or 0.32 percent, to close at 1,450.46.
The Kingdom’s parallel market, Nomu, also increased by 304.90 points or 1.18 percent, to close at 26,230.43. This comes as 36 stocks advanced, while as many as 26 retreated.
The best-performing stock of the day was Miahona Co., as the company’s share price surged by 29.91 percent to SR14.94.
According to Al-Ekhbariya, the stock surged to its maximum limit on its debut on the Saudi main market.
Miahona is a Saudi joint-stock company that began operations in 2008 and was one of the first developers of water and wastewater infrastructure under the public-private partnership model in the Kingdom.
On May 27, Miahona announced the allocation of a minimum of 10 shares per individual subscriber, representing about 20 percent of the total offering.
The individual investor subscription, which included 9.65 million shares, was 6.1 times oversubscribed, ensuring each individual subscriber received at least 10 shares.
The remaining shares will be proportionally allocated at approximately 11.6 percent, based on each subscriber’s requested amount relative to the total shares offered. The final offering price was set at SR11.5 per share.
Consequently, the number of shares allocated to institutional investors will be reduced to 38.62 million, representing 80 percent of the total offering.
Other top performers included Saudi Cement Co. and Taiba Investments Co., whose share prices soared by 3.82 percent and 2.71 percent, to stand at SR44.85 and SR41.65 respectively.
The worst performer was Saudi Cable Co. whose share price dropped by 7.87 percent to SR59.70.
Alkhorayef Water and Power Technologies Co. as well as Etihad Atheeb Telecommunication Co., did not perform well and their share prices dropped by 7.62 percent and 4.83 percent to stand at SR157.60 and SR106.40, respectively.