How Wa'ed Ventures Is Empowering The Entrepreneurial Ecosystem In Saudi Arabia Wa'ed Ventures is a US$500 million venture fund investing in the next generation of transformative startups which are taking advantage of disruptive technologies.

Closing 2022 with a cumulative total of 63 deals inked since establishing in 2011, and a portfolio of 43 Saudi-centric portfolio companies, Wa'ed Ventures, the venture capital arm of Aramco, has cemented its position as the most active investor for Saudi startups, providing crucial funding and support to the Kingdom's emerging tech scene.

Wa'ed Ventures is a US$500 million venture fund investing in the next generation of transformative startups that are taking advantage of disruptive technologies. The firm seeks to partner with passionate entrepreneurs disrupting traditional industries through revolutionary ideas. Today, it is one of the most active investors in the region, with $100+ million deployed in 2022 alone.

Being one of the earliest players in the Saudi venture space, Wa'ed Ventures quickly outpaced the rhythm of the market when it came to adopting a risk-tolerant and thematic investment approach. The fund aims to drive local economic growth and diversification by becoming the partner of choice for founders, by building long-term partnerships where Wa'ed Ventures actively participates in follow-on funding rounds. Wa'ed Ventures invests in startups from the early seed stages to the mid- and late-growth stages with a ticket size of up to $20 million.

When asked about Wa'ed Venture's origins, Fahad Alidi, Managing Director, shared that Wa'ed Ventures, as the venture capital (VC) firm that it is today, was birthed from Aramco's entrepreneurship center that originally provided end-to-end support to early-stage entrepreneurs in the early 2010s. "In the early days, there were only a small number of founders who attempted to build tech ventures and who understood the fundamentals of the entrepreneurship sector," he said. "As a result, Wa'ed became one of the first supporters who existed primarily to support this new economic wave. To these entrepreneurs, Wa'ed provided mentorship, skills transfer, and business planning and strategic support."

When it was first established in 2011, Wa'ed initially did not provide monetary support. "It wasn't until after the first years of operations that Wa'ed identified this need for venture financing in the local market," Alidi said. "We slowly began by investing in technologies that we believed were groundbreaking- fintech, cloud computing, robotics." Today, Wa'ed Ventures is a VC firm that writes checks up to $20 million across geographies, stages and sectors. Wa'ed Ventures identifies itself as a sector-agnostic fund; however, as a tech-focused investor, technology remains the key factor behind the startups it bets on. Specifically, the firm seeks technologies that present wide applications, geographical adaptability, and strategic relevance to the Kingdom, as well as to Saudi Aramco.

Wa'ed Ventures believes in the importance of active post-investment support to startups. The fund provides tangible operational support and resources, as well as an extensive network of customer and partner relationships to its portfolio companies. To ensure that entrepreneurs with drive, passion, and focus reach their goals, Wa'ed Ventures provides mentorship, advisory, and access to industry experts and savvy investors that help create significant value. Aramco, being the sole backer of the fund, provides Wa'ed with matchless insight and decades of experience in different domains, including nascent technologies like artificial intelligence, quantum computing, and blockchain. This is why Wa'ed Ventures was the earliest investor in advanced technologies such as artificial intelligence and supercomputing, when the region was still more focused on e-commerce and platform business.

When asked to comment about the evolution of the KSA startup ecosystem from his perspective, Alidi said, "The startup ecosystem really began to see significant change after the launch of Saudi Vision 2030 in 2016. Between 2016 and 2018, we see incredible growth and infrastructure development for the Saudi startup ecosystem. Monsha'at, also known as the Small and Medium Enterprises General Authority, was formed to specifically support the growth of local SMEs and startups, Saudi Venture Capital (SVC) was formed to help develop the VC ecosystem, and later the Saudi Venture Capital and Private Equity Association (VCPEA) was also formed. Fintech Saudi and other private and governmental support organizations arose during this time to support specific sub-sectors. VCs popped up across the Kingdom, and attracted regional VCs as well. The ecosystem's funding deployment capacity has grown exponentially."

Alidi also discussed how Wa'ed Ventures has adapted to changes in the industry by extensively expanding its investment mandate in 2021, which included identifying a gap in the market for funding later stage ventures. To address this, Wa'ed has increased its ticket sizes to $20 million from $5 million, allowing it to participate in a wider range of investments and support the growth of the tech ecosystem in Saudi Arabia. Today, Wa'ed Ventures assumes an expanded responsibility when it comes to its role as one of the larger and most active venture funds in the region. The fund has diversified its strategy to include a global-inbound investment mandate whereby target companies are mandated to localize their operations in real terms. Startups backed by Wa'ed Ventures must relocate part of their core operations to Saudi Arabia, including tech teams and research and development functions. The focus, however, will stay on emerging and underserved technologies that will act as a catalyst to fill the technological gaps in the local ecosystem.

Wa'ed Ventures' long-term vision and commitment will thus provide local founders with the tools, networks, and infrastructure to ensure success.

Learn more about the most prominent venture capitalists in Saudi Arabia's startup ecosystem by checking out the report, The Evolution of Saudi Arabia's Startup Ecosystem 2010-2022.

This article was originally published on Lucidity Insights, a partner of Entrepreneur Middle East in developing special reports on the Middle East and Africa's tech and entrepreneurial ecosystems.