The Investor Partner Divide Rethinking Support Beyond Funding

Good afternoon everyone and welcome to our session that comes after h a very interesting session where founders are sharing more about their journeys about uh their um you know experiences and uh they see things from their own perspective right me also today as a founder it's very interesting how I see things but also as an investor how we all see things so I'm very happy we are all teased by the band outside I know the music is keeping up but with this panel that I'm very happy to moderate uh I'm sure the rhythm will be better so stay here um I'm very happy to be here with a great panel with investors who are into the venture space across different stages with Redda, Ecta and Alex. And actually I would like to kick it off right away with Redda and say about how an investor is looking at the journey from the very beginning in terms of uh adding value. How do we add value to the founders? There is funding out there. There is money but there are founders who need to uh to see the value the real value from the investors.

So how do you rather from your perspective uh add add value?

Sure. Uh first uh thank you for having me and uh it's great to see such a successful and uh active uh event and see how every year it evolves and how tech is taking a place really in the in the center uh of the stages. Uh maybe just quickly to introduce first uh who venture one is. We we are venture builder uh connected to the advanced technology research council which is an entity uh funded by Abu Dhabi government which orchestrates applied research from strategy and funding to execution all the way to commercialization. And venture one is a piece of this puzzle that is in charge of commercializing the technology that comes out of this ecosystem.

But uh one way of doing that is creating ventures from here from Abu Dhabi uh in domains like AI, cryptography, security and so on and so forth. So uh we like to be part of the movement of Abu Dhabi to a knowledge economy and uh to contribute to making Abu Dhabi and the broader UAE uh transition from a tech investor or a tech adopter to actually a tech maker and the tech exporter. So this was just to give a bit of a context of who venture one is. Now to get to your question uh I guess as a venture builder what founders expect from us uh besides the resources the the funding resources is probably three things. The first one is access to our ecosystems of clients.

It is extremely important and extremely helpful when we get the founders in the table with clients who need their solutions and clients who are incentivized to make their solutions work. For us, we believe that uh putting a 60 70% 3D product in the hands of a friendly client who genuinely is interested in the success of product is actually much more helpful than getting into a tunnel and trying to invent the perfect product or the perfect solution only in the lens of the founder. The second uh advantage or the second benefit that the founders get by being part of venture one is access to an extremely strong R&D platform. So we are linked to the technology innovation institute where we have 1,200 researchers in nine research centers from AI to cryptography to advanced materials to directed energy and so on and so forth. So the ventures have constant access to this R&D platform that serves their needs, help them solve problems and so on and so forth.

Last but not least is our ecosystem of partners. Partnership is extremely important in the venture journey. We give access to these uh founders and ventures to an ecosystem of technical partners. For example, in TI, we have partnerships with more than 100 universities across the world where we have direct access to developers, researchers, and so on and so forth. But we also give them access to go to market partners that help them get their products out there.

So in summary, it's uh other than the funding resources, it's the client access, it's the R&D platform and the partners.

Thank you. Ecta when we come now to your uh perspective as a family office as well right which is the patient capital and uh the growth stage where you're focusing how do you build this partnership this relationship with value creation with the with the founders.

Thank you so much for that question. Hello everyone and thank you for being here till the end of the day. Um very interesting question. KBW invests in growth stage companies and by that definition first of all uh we have already eliminated the operational risk from uh the business side of things. So what we focus on is the growth.

Okay. When when we engage with founders we are mostly in in a segment where they are already established in terms of their business model. they're already established in terms of where they are expanding at least in some part of the world they're already existing and doing hopefully reasonably well. Uh in many cases they are revenue positive. Now in those cases when they reach out to us that's mostly when uh they want to expand in the region.

95% of KBW portfolio today is uh international. uh although we are actively trying to expand it in the region but when international uh portfolio companies when they seek partnership or collaboration for the region there are various things that they struggle with and number one is the navigation on the regulatory side of things which you briefly highlighted as well. Uh when you look at it from outside the region seems like a massive opportunity. However, when you come inside and try to uh set up on the operations, then you have to deal or navigate with various segments within regions. So, Qatar will have its own set of regime.

Saudi will have its own set of regime. My friend Feras here is smiling because QFC is doing great work at that. Shout out to you.

Um UAE is doing great set of things, you know. So all these countries they are all wanting to really provide the best ecosystem for these international companies to come and set up their bases. However, there still is a challenge because they are very segregated, right? There is no one structure sort of a funnel in which a company can come do one setup and call us done. No, they still have to deal with lot of regulatory uh restrictions for which they need guidance.

So that is definitely one. Two is um some level of guidance also on the business side of things. Uh which region you know within Middle East also which specific country would be best for their kind of businesses, which ecosystem would be best for their kind of businesses. So that is the help that they seek when they draft their business models. They generally want our insights u the from from somebody on ground point of view.

So beyond capital that knowhow uh adds a lot of value I feel and that's what we strive to help them navigate within the region.

Alex you representing you are leading the venture arm of one of the largest financial services firm corporation. How would you how do you look I mean how do you source uh your deals? How do you do the criteria uh setting and value ad please?

Sure. and and hi everyone similar question three different profiles very different profiles so it's going to be slightly different answers every time so for a start we're we're predominantly a venture builder SC Ventures builds ventures we also invest in the partners we work with with the mindset of of partnership and so so as a result you know think of 35 new companies which we've created over the last few years and another 20 give or take minority stakes in the partners that we work with um so so from a founder perspective when we build a venture the the first promise is well you will exist. Um we make them exist. That's you know the first uh the first agreement. Um assuming we're convinced that they have they're on to something that there's a right to exist and uh and so we'll we'll walk them through a very rigorous process which you know we can demystify a little bit.

It's a it's a lot more method than it is magic and um and intuition. there's there's a method to um you know first idea and and iterating it getting feedback iterating again and uh and ultimately getting to to a pitch which we think is worth scaling up which is a first venture. So so that first method is is uh is is one we impart on them. The second point is is now we're operationalizing a venture. Whatever we do is by definition it's going to have to be institutional grade bank grade.

What does that mean? It means you know we well first we don't break the law but more importantly no no shortcut on financial crime compliance no shortcut on cyber security requirements no shortcut on technological resilience no shortcut on ethics generally speaking and so so an element of building a venture which is genuinely institutional grade so we can represent with a straight face that this is good for scaling and so we'll we'll help founders do that hold their hands at times and because not you know there's things that where people don't know what they don't know and so we can we can back it up and then there's a third stage where where now the venture is scaling and will remain until you know until the stage where they really sort of um you know out there that will remain operationally involved will will be involved in uh in in business development efforts at times will be involved in uh in monitoring um various you know the pipeline or you know various things in the venture at times you know look you we're embarking on fundraising now your CFO was good from zero to one but um exit the 0ero to one person and enter the 1 to 10 person because it's a different phase of life and it's going to be a different set of individuals doing it and so we get involved in that as well. So it's a very hands-on process of uh of of building ventures so they can not only exist on day one but also thrive and and become real things so they can become ectas pipeline the survivors and uh and and you know hope

the survivors come to us.

Exactly. and and you know populate and and populate the the the the marketplace and um and uh and by the way I should mention while we added that you know we had very little in this part of the world not so long ago two three years ago we had two nason baby ventures which are scaling still but we have now eight businesses created very real skilled jobs across the UAE so so there's a the there's a benefit to the rigor of that method which is we're building things that are here to stay and grow and ultimately be very impactful.

Great. And red you mentioned about uh the ear the the virtual building at the very beginning the zero to one in terms of ideas right how you come up with the areas to focus the fields the industries is it uh something that you keep having on the lab and how does even AI might affect your decision making process

yeah I guess I like what Alex said about it's more of a method as opposite to magic And I think I had a quick chat with Alex before the panel and I really appreciated how we are trying to do something that Alex went through eight years ago. I mean venture one is two years old. We we've built four ventures so far, but we have a couple of them in the pipeline. We've set a strategy and a vision to build 50 tech ventures in the next 10 years. And when I talked to Alex, they built 35 in eight years.

So it's pretty much the same pace. So I I'm happy that we had the discussion and I think we will we will we will continue that.

For us we use a simple approach. We have four criteria. The first one is the strategic fit. As uh an Abu Dhabi governmentowned entity, we work on sectors that are a priority for Abu Dhabi. Uh so we tag along the priorities of the uh emirate.

uh and we are doubling down on these sectors whether it's security whether it's environment uh energy renewables and so on and we also selected a couple of technology areas where we are doubling down AI robotics autonomous directed energy and so on now within this matrix uh the second criteria we use is desiraability and this is where uh in our ecosystem in ATRC we are three entities ities. Venture One does the venture building, but we have an entity called Aspire. What they do for a living is actually engaging with end users across Abu Dhabi and sourcing problem statements that are worth solving in these sectors using these technologies. So desiraability is at the forefront of what we do. As I told you before, the client access is important in what we bring to the table.

So we are really having a dedicated entity that only sources problem statements from Abu Dhabi that are worth solving. The third criteria is feasibility. So alongside the technology in innovation institute and with our,200 researchers we come up with technical proposals to solve these issues. Now you would know that the typical UAE client is a very demanding client. The UAE client is a client that has access to best of breed, that has access to resources and so on.

So we do not settle for creating a technology that is average. We only invest in building solutions that are at least at par with the global benchmark if not better. And last but not least is scalability. We do not although it's very important to have an anchor client in the UAE to co-build together to have a design partner to build your solution but we do not build solutions that are only catered for the UAE. We build solutions that we want to scale outside and we want to really push the bar and have Abu Dhabi become an exporter of technology

and that's where players like Hector's fund right I mean the office come pick it up and with all the relationships you have around the world you can open doors you know to models that are global and not only UA driven but I saw you Alex when I was talking you about the high about the UAE h demanding uh clients what's your uh what's your feedback on Well, not every day in your life do you get to participate in what I call nation building, right? Uh and and uh and this is an instance and in in my mind, you know, the most certainly one of the the most prominent instances of uh in nation building on the planet. And guess what? Nation building lends itself very well to venture building, right? So if a fraction of the vision I think it'll be more than a fraction but if a fraction of the vision gets materialized or materializes over time uh for for for the nation then this has humongous implications formemes supply chains commerce trade trade finance crossber flows um the expectations you know wealth creation meaning implying a whole demand from all these constituencies for for you know businesses services and and and the other businesses that we need to build and so so so is it is it a very fertile land for for venture building absolutely yes and you know I subscribe to that now there's another aspect to it which is you know I think of the UAE as a market I also think of the UEE as a hub for the GCC a hub for the region you know and beyond frankly because you know we could also talk about South Asia on the one hand and Africa specifically East Africa on the other hand and um and and and I find that some of the businesses we we have here are are really capabilities which we've taken from from elsewhere but bringing to the region with a view to really serve the the the ecos and Rita you alluded to to an ecosystem of partnerships which is really important and there's an element of crossber partnerships there's an element of plugging ventures with each other and and sort of not necessarily replicating because every market is different but transporting capabilities from one market to the next and connecting that which is really powerful when you get it going.

Yeah.

And Ecta, what does effective partnership when you take over all these companies and you invest right at a later stage? What how do you define effective partnership between an investor and the founders when you sit on the boards when you talk to them I mean do you are you also by yourself innovative of coming up you know on a case by case basis with a new model?

Sure thank you so much. Um it's very strategic. Of course, it has to be case-to- case basis when we are talking about partnerships. Uh it has to be very long-term driven as well because when it comes to investments, it's very easy. We have certain criterias to make an investment.

Those criteria criteria are met. Great. We go for it. But when it is about partnership, when we are actively engaging, we are actually going to be active investors. In that case, one of the hats is like what does the region needs.

So that's the dual hat we always have and we only focus on areas that are the target categories for the region. It could be gaming, sports, wellness, uh fintech. So these are the areas where we are very active because we know that there is requirement for that kind of technology advancement and technology capital uh human capital in these categories in the region. We want them to come here. We want them to have a base here because then it becomes a win-win game and it actually creates an impact to your point as well.

We are also ticking the mandate, the regional mandate that we have. Where do you see I think we have only one minute here but very quickly for each of you. I mean where do we see UAE and the region in uh 5 10 years from now in terms of VC ecosystem with a different perspective each of you how you look at it

well

five five years from now I'm sorry

five years from now

glo I'm thinking that party's already on probably everybody would be like okay um I think we are in the AI world many might see it as an AI bubble I would see it's still an a great opportunity uh an area to focus on and we are just scratching the surface when it comes to AI. Lots and lots of companies are actually working on the digital transformation. Forget about AI. So they need to get to AI. We still need to work on the AI infrastructure and so forth.

So if you're not on that radar, I would recommend get on that radar because five years from now world is a different place. brother.

Yeah, I guess the AI wave has shown that the UAE can really punch uh above its weight and I guess uh being a technology maker and the technology exporter is where I foresee the UAE in a couple of years. I think there are a lot of efforts that are converging towards that. Uh the UAE has proven to be an amazing investor in tech, an amazing adopter of tech, an amazing enabler. I think we are in an era where we will be making technologies from here and exporting technologies to the world from here.

Yeah,

Alex. The the key word is uh is ecosystem. When when we talk about Silicon Valley, we we don't talk about Stanford University or the founders, you know, Steve Jobs and the others or A6Z in isolation. We talk about them as part of an ecosystem which is a very very powerful thing to assemble and it took generations to do this but and it also takes a very deliberate approach to build it one one one piece at a time. Late stage capital, venture building connected to technology, intellectual capital, super important, venture builders, founders, technologists, all stages of capital from preede to to the middle stage to you know you know late stage represented here journalists um uh the regulators, policy makers that ecosystem is being built you know one bit at a time very rigorously again very deliberately and I think this is this is this is a very powerful proposition meaning it should be able to give other centers such as the valley, you know, a good run for its money.

Great. And I think we're closing with this very positive uh note on that UAE is becoming between east and west a new type of Silicon Valley. Thank you so much.

Thank you

to my panelists and thank you all being here. I think the music event outside keeps elevating because such a great panel. Thank you.

Thank you.