Saudi Aramco, the world's largest oil company, has made a significant move by injecting an additional $4 billion into its venture capital arm, Aramco Ventures. This substantial investment reflects Aramco's commitment to diversifying its portfolio and embracing innovation in the rapidly evolving energy landscape. The expansion of Aramco Ventures not only signifies a strategic shift towards technology and sustainability but also holds the potential to reshape the startup ecosystem and contribute to economic growth.
Introduction to Aramco Ventures
Aramco Ventures, the venture capital arm of Saudi Aramco, was established to identify and invest in innovative technologies and business models that have the potential to disrupt the energy sector. With a focus on fostering entrepreneurship and driving technological advancements, Aramco Ventures plays a pivotal role in supporting startups and emerging companies.
Aramco's Additional $4 Billion Investment
The injection of an additional $4 billion into Aramco Ventures underscores the company's commitment to nurturing a culture of innovation and embracing transformative technologies. This substantial capital infusion is aimed at fueling the growth of startups and scaling up innovative solutions that align with Aramco's strategic objectives.
Expansion of Aramco Ventures
The significant increase in capital allocation to Aramco Ventures signifies a major expansion of the venture capital arm's investment scope. This expansion presents an opportunity for startups and entrepreneurs to access the necessary funding and resources to drive their ventures forward, ultimately contributing to the development of a vibrant and dynamic startup ecosystem.
Focus on Technology and Innovation
Aramco's heightened focus on technology and innovation through its venture capital arm reflects the company's recognition of the pivotal role that disruptive technologies play in shaping the future of the energy industry. By investing in cutting-edge technologies and innovative business models, Aramco Ventures aims to stay at the forefront of industry transformation and drive sustainable growth.
Aramco's Strategic Investments
The strategic investments made by Aramco Ventures are carefully curated to align with the company's long-term vision and goals. By strategically allocating capital to startups and emerging companies that demonstrate potential for innovation and impact, Aramco Ventures seeks to foster a culture of collaboration and drive positive change within the energy sector.
Impact on the Startup Ecosystem
The substantial injection of funds into Aramco Ventures is poised to have a profound impact on the startup ecosystem, particularly within the energy and technology domains. This influx of capital not only provides startups with the financial backing they need but also opens doors to mentorship, industry expertise, and strategic partnerships, thereby propelling the growth and success of innovative ventures.
Aramco's Contribution to Economic Growth
Aramco's continued investment in technology and innovation through Aramco Ventures is expected to have far-reaching implications for economic growth. By empowering startups and fostering a culture of entrepreneurship, Aramco contributes to job creation, knowledge transfer, and the development of a robust innovation ecosystem, ultimately driving economic prosperity.
Collaboration and Partnerships
Aramco Ventures' expanded investment portfolio creates opportunities for collaboration and partnerships between startups, established companies, and industry experts. This collaborative approach not only fosters knowledge exchange and innovation but also accelerates the development and adoption of transformative technologies that can address complex energy challenges.
Aramco's Vision for the Future
The substantial investment in Aramco Ventures reflects the company's forward-looking vision and commitment to shaping the future of energy. By actively engaging with startups and innovative ventures, Aramco aims to drive sustainable solutions, enhance operational efficiency, and contribute to the global energy transition, aligning with its vision for a more sustainable and resilient energy landscape.
Sustainability and Environmental Initiatives
Aramco's increased focus on sustainability and environmental initiatives is mirrored in its investment strategy through Aramco Ventures. By supporting startups and technologies that prioritize environmental stewardship and sustainable practices, Aramco reinforces its dedication to mitigating environmental impact and advancing the transition towards a low-carbon future.
Aramco's Role in Energy Transition
The expansion of Aramco Ventures underscores the company's proactive role in driving the energy transition. By investing in innovative solutions that promote energy efficiency, renewable energy integration, and carbon reduction, Aramco contributes to the global efforts aimed at addressing climate change and advancing the transition to a more sustainable and diversified energy mix.
Challenges and Opportunities
While the expansion of Aramco Ventures presents significant opportunities for startups and the energy industry, it also brings forth a set of challenges. Navigating the complexities of technological innovation, market dynamics, and regulatory landscapes requires a strategic approach and a deep understanding of the evolving energy ecosystem.
Aramco's injection of an additional $4 billion into Aramco Ventures marks a pivotal moment in the company's journey towards embracing innovation, technology, and sustainability. This substantial investment not only amplifies the support available to startups and emerging companies but also underscores Aramco's commitment to driving positive change within the energy sector. As Aramco Ventures continues to expand its investment portfolio and foster collaboration, its impact on the startup ecosystem and the broader energy industry is poised to be transformative, shaping the future of energy innovation and sustainability.
Saudi Arabia’s Wa’ed Venture, the VC arm of Aramco, has co-led a $52 million Series B round in the US-based construction technology (contech) startup Mighty Buildings, along with BOLD Capital, with participation from Khosla Ventures and 15 other new and existing investors.
Mighty Buildings, founded in 2017, is a 3D printing contech known for its prefabricated, environmentally friendly and climate-resilient homes.
The new round brings the total funding raised since inception to $153 million.
The funds will be used to build out Mighty Buildings’ factories in North America and expand operations to Saudi Arabia and the United Arab Emirates.
Press release:
Mighty Buildings, the leader in 3D printing construction technology known for its prefabricated, environmentally friendly and climate-resilient homes, today announced that it has raised $52 million in funding. This latest round demonstrates strong investor confidence in Mighty Buildings' innovative offsite 3D printing construction technology.
The round was co-led by Wa’ed Ventures, the $500 million innovation-focused venture capital fund backed by Saudi Aramco, and by BOLD Capital Partners, a U.S. disruption and transformation-focused venture firm. Existing investor Khosla Ventures and new investor KB-Badgers, a South Korean firm investing from its sustainability-focused fund, were among a total of almost 20 investors in the round. New investors contributed more than half of the funds raised.
Funding is earmarked to accelerate the development and scale production of new homes for the U.S. market, where new home demand continues to increase, as well as to establish manufacturing operations in Saudi Arabia and the United Arab Emirates, two of the largest and fastest-growing construction markets in the world. The addition of operations in the Gulf region aligns with Mighty Buildings' strategy to transform housing construction globally while addressing sustainability, climate resilience, and the global housing shortage.
“The team at Mighty Buildings have reaffirmed our confidence in the incredible and diverse potential for innovation lying within the construction tech industry. Our investment in the company reflects our belief that innovative materials, such as those used in Mighty Buildings’ proprietary 3D-printing, will be a major driver for scalability and sustainability of homebuilding in the Gulf Region,” said Fahad Alidi, Managing Director at Wa’ed Ventures.
Mighty Buildings is meeting a rapidly growing demand for sustainable, prefabricated housing, as evidenced by the delivery of over 50 units to date, an important milestone that reflects the company's progress in developing scalable housing technology. By focusing on its mission, the company is making it easier, faster and more cost-effective to build homes, while pushing the construction industry towards lower carbon, climate-resilient solutions.
“This recent funding underlines Mighty Buildings’ leadership in the modular homebuilding market. It will accelerate our growth by funding the international expansion to one of the most exciting homebuilding regions in the world. We are thrilled about the support from such esteemed investors for our mission: solving the housing and climate crises by transforming the way the world builds homes,” said Mighty Buildings’ CFO Rene Griemens.
Following the opening of its innovative, industrial-scale factory in Monterrey, Mexico, in 2022, the company continues to emphasize its strategy of transformative home building. Mighty Buildings’ patented factory-based 3D printing manufacturing process speeds construction by 3-4x, providing for the completion of a home’s envelope in less than one week with drastically less water and near zero waste.
Using its patented Lumus material, which is 5x stronger than concrete, the technology of Mighty Buildings creates climate-resilient homes that resist severe weather, hurricanes and earthquakes.
Source: Wamda
Saudi Arabian oil giant Aramco will invest in the development of a major integrated refinery and petrochemical complex in Northeast China.
Huajin Aramco Petrochemical Company (HAPCO), a joint venture between Aramco, North Huajin Chemical Industries Group Corporation and Panjin Xincheng Industrial Group, will develop the liquids-to-chemicals complex, according to a statement from the oil giant.
The facility will be built in the city of Panjin, in China’s Liaoning Province and is expected to be operational in 2024.
Aramco will supply up to 210,000 barrels per day of crude oil feedstock to the complex. The greenfield project will include 300,000 bdp refinery capacity and petrochemical units.
Mohammed Al Qahtani, Aramco Senior Vice-President of Downstream, said: “Continued energy security remains a shared priority and this partnership represents another major milestone in our journey together, supporting China’s vision to create a modern economy grounded in innovation, ambition and sustainability. It will further support Aramco’s broader objective of becoming a global leader in liquids-to-chemicals.”
The decision, which is subject to finalization of transaction documentation, regulatory approvals and closing conditions, follows the establishment of HAPCO in December 2019 between the three partners.
Source: Zawya
Wa’ed, the entrepreneurship arm of Aramco, tripled the amount of money it loaned to Kingdom-based start-ups during 2020, and injected significantly more money into new businesses through venture capital (VC) investments, as it began a multi-year effort to raise support for Saudi entrepreneurs.
The Dhahran-based venture, a wholly-owned subsidiary of Aramco, increased loan disbursements to small and medium-sized enterprises (SMEs) in Saudi Arabia to SR31 million in 2020, from SR10 million in 2019. In venture capital investments, Wa’ed deployed SR43 million, up 34 percent from SR32 million in the previous year.
The number of loans financed rose to 12 in 2020 from four in 2019, and venture capital deals executed increased from seven to nine over the same period.
Since its inception in 2011, Wa’ed has deployed more than SR375 million to enable the growth of hundreds of innovative, disruptive digital businesses in Saudi Arabia through a unique end-to-end combination of loans, VC investment and incubation services.
Under its mandate to help diversify the Saudi economy and support entrepreneurs, Wa’ed targets game-changing SMEs across all sectors whose technologies are unique, innovative, ready for market, and address a gap in the country.
Diversifying the Saudi economy beyond oil and gas by investing in other sectors is one goal of the Kingdom’s Vision 2030 initiative, a bold, ambitious blueprint to ensure sustainable economic growth into the future.
By supporting first-mover companies whose products measurably raise the quality of life in Saudi Arabia, Wa’ed has helped grow the Kingdom’s nascent start-up ecosystem into one of the fastest-growing hotbeds of entrepreneurship in the world.
In 2020, Wa’ed responded to the challenges of COVID-19 by going virtual and redesigning workflows to streamline procedures and manage new realities, creating efficiencies that generated higher loan and VC investment volumes. Wa’ed believes the workflow enhancements it introduced will continue to boost operating performance long after the pandemic ends.
“I am very grateful for the confidence and support we receive from Aramco and the Kingdom, which enables Wa’ed to fulfil its unique pioneering role as an advocate for innovative new businesses that localize technologies and services which are needed in Saudi Arabia and can help improve quality of life,” said Wassim Basrawi, Wa’ed’s Managing Director.
“In a very challenging year, I am proud of the Wa’ed family, which includes my team and our resilient entrepreneurs, for rising to the challenges and keeping us on track to deliver an even greater impact in 2021.”
Through its mentoring and start-up incubation activities, Wa’ed is a thought leader in Saudi Arabia, offering a wide range of cutting-edge professional certification, patent development and incubation support services, as well as a range of entrepreneur networking events that attracted more than 3,000 people during 2020.
Wa’ed’s Innovation Ecosystem team is a Gulf leader in creating new incubation techniques.
In 2020, personnel from the efactory, a prototyping development lab at Wa’ed, were named inventors on three patents from the U.S. Patent & Trademark Office. The team incubated 10 new tech start-ups during the year, and three were awarded national contracts after receiving funding, interest and scouting from Aramco.
Following the onset of COVID-19, Wa’ed adopted virtual training of entrepreneurs by developing an online platform that attracted 60 new mentors, who reviewed over 130 applications from entrepreneurs with “minimum viable products” ready for market.
Social distancing also did not hinder Wa’ed from expanding the Innovation Ecosystem Society (IES), a Wa’ed-sponsored network of more than 1,600 entrepreneurs who meet in virtual events called Google Grind, which is co-sponsored with the U.S. technology giant.
As it prepares to close out its first decade, Wa’ed plans to increase its impact as the largest and most active institutional venture capital investor for Saudi-based start-ups and the only SME-sized lender in the Kingdom offering non-collateralized loans.
Wa’ed currently supports 66 Saudi SMEs through loan financing and, with its venture capital investment arm Wa’ed Ventures, a portfolio of more than 30 companies, including tech platforms Golden Scent, an e-commerce merchant for beauty products; Wahed, a global Shariah-compliant fintech robo-advisory platform licensed by the Saudi Capital Market Authority; and FalconViz, a provider of unmanned aerial drone systems.
In December, Wa’ed announced five new venture capital deals, including Ynmo, which develops Arabic-language instructional software for children with learning disabilities, and Postage, a last-mile logistics provider and rapid courier service for businesses.
Through bridge rounds, Wa’ed raised venture capital investments in Averos, a developer of real-time location-based monitoring systems, Hazen.ai, a developer of intelligent road safety systems, and GetMuv, a platform to access more than 100 health clubs and centers in the Kingdom.
Looking ahead to 2021, Wa’ed is planning a series of new initiatives to support development of Saudi’s venture capital ecosystem, which is increasingly attracting foreign innovators who are interested in localizing their technologies in the Saudi market.
The newest innovation in 2021 is expected to be Wa’ed’s new Venture Builder, a one-of-a-kind breeding ground for promising start-ups in Saudi Arabia, which provides entrepreneurs and start-ups with essential back-office services such as marketing, new business development and networking, allowing innovators to get their companies off the ground.
The Venture Builder will allow Wa’ed to specifically nurture start-up businesses that target existing market needs and gaps in Saudi Arabia, which are critical to the Kingdom’s economic future and diversification.
Overall, Mr. Basrawi said Wa’ed plans to double the number of loan and venture capital deals in next three years by entering new collaborations, better leveraging Saudi Aramco’s own business ecosystems, and actively reaching out to investors.
In its first decade, Wa’ed benefited from co-investment and innovation collaborations with King Abdullah University of Science and Technology (KAUST) and King Fahd University of Petroleum & Minerals (KFUPM).
In December, Wa’ed signed a Memorandum of Understanding (MoU) to collaborate with OQAL, the largest network of angel investors in Saudi Arabia and Bahrain, with the goal of creating a new pipeline of potential deals.
Also during the month, Wa’ed signed an MoU with Namaa Almunawarah, the business development agency for the city of Medina, to support local SMEs there.
Medina is one of the fastest-growing Saudi hubs for start-up investment, based in part on well-developed research universities that have spearheaded the development of new technologies.
Wa’ed is also in advanced discussions to execute an MoU with the Royal Commission of Jubail and Yanbu, to promote entrepreneurial opportunities in the industrial sector.
source: zawya
Kuwait Investment Authority's decision to participate in the deal or not will depend on a "study" of the IPO
DUBAI- Saudi Aramco met investors in Dubai on Sunday to market its initial public offering (IPO), after trying to secure demand from Kuwait's sovereign wealth fund for the deal, worth up to $25.6 billion, which relies heavily on local and regional buyers.
Top executives of the Saudi state-owned oil giant, including Aramco's Chief Executive Amin Nasser, met officials of Kuwait's sovereign wealth fund weeks ago, a source familiar with the matter said, confirming an earlier report on Sunday in the Kuwaiti newspaper Alrai.
Meanwhile, Aramco's management including its finance head and advisers met with institutional investors at an IPO roadshow in Dubai on Sunday, the second outside Riyadh after the company decided to cancel all roadshows in developed markets.
The Kuwaiti newspaper said the Kuwait Investment Authority's (KIA) decision on whether to participate in the deal would depend on a "study" of the IPO.
Aramco said in an email it did not comment on specific investor meetings.
The KIA did not immediately respond to a Reuters request for comment. In late October, the KIA's managing director Farouk Bastaki said Aramco had not approached the fund then, but that the KIA would look at the IPO like any other investment.
Talks have taken place with sovereign investors including the Abu Dhabi Investment Authority, Singapore's GIC and other funds, sources have told Reuters.
DUBAI ROADSHOW
Aramco has struggled to attract a major cornerstone or anchor investor for its IPO, which could be potentially the world's biggest.
An executive at a London-based fund, who attended the roadshow in Dubai, told Reuters he was interested in the IPO, but declined to provide more details.
Some investors asked Aramco about the sustainability of its dividend policy.
Aramco has set a base dividend of $75 billion for five years.
A second executive at an investment firm said Aramco did not say whether that base level might grow.
The meeting was led by Aramco's senior vice president of finance, strategy and development, Khaled al-Dabbagh, and Yasser Mufti, the company's vice president of strategy and market analysis, sources said.
"The only thing left for comfort is the Saudi government, it’s fiscal policy and ability to sustain the dividends," said a fund manager. "If you’re OK with that, you’ll invest."
Over 20 people, wearing suits, walked into the presentation area at a luxury hotel in Dubai's financial district, but hotel security restricted entry for reporters.
Another roadshow is planned in Abu Dhabi on Monday.
"Looks like there's a lot of interest both from retail investors and institutions." K. V. Vijay Raghavan, group finance director at Dubai-based investment firm Arenco told Reuters after attending the roadshow.
"I wish it was more like $1.4 trillion to $1.5 trillion, but this is what it is," he said, referring to the company's aim to achieve a valuation of $1.6-$1.7 trillion.
However, he also said that looking at the investor interest, the IPO could hit the top end of the valuation range.
Aramco plans to sell 1.5% of the company. The deal is the centrepiece of Crown Prince Mohammed bin Salman's plans to diversify the Saudi economy away from its reliance on oil.
Saudi Arabia's central bank governor told Reuters on Sunday in Riyadh that it was monitoring banking indicators on a daily basis and was not seeing any impact on liquidity from the IPO.
source: zawyazawya
