Beyond IPO in Saudi Arabia | Abdulaziz Alomran

Added: 2026-06-02

[00:00:00]Your work doesn't end when it IPOs.

[00:00:02]>> A lot of people think of an IPO as an end point when it's just really a new beginning.

[00:00:08]>> How's the regulator dealing with and and communicating with the market?

[00:00:12]>> So, we came a long way back then. Let's say more than 90% of trades were all retail investors. So, the regulator and the government had a very big heavy oversight role.

[00:00:24]>> How is AI changing your thesis as an investor? It forces you to sharpen your your view and take a stronger position on what you believe in will work in the future.

[00:00:44]Welcome to On Point by Argon. Today I'm joined by Abdul Aziz Almran, founder and CEO of Impact 46. Abdul Aziz is one of the most active investors in Saudi Arabia, backing companies such as Jawah and Rasan through successful IPOs and supporting others now approaching the public markets. He's also expanding into private credit and gaming, helping shape the kingdom's evolving capital landscape. In this episode, we talk about public market performance, capital discipline, and where Saudi investment is heading next. This is on point, real conversations, global perspective, and I'm your host, Sami Arya.

[00:01:22]>> This episode of OnPoint is presented by STC Bank, driving financial innovation across the Kingdom.

[00:01:30]>> Thank you so much for being here. You have been one of the early supporters of u my documentaries as I started working in Saudi Arabia and uh people told me that you really have to talk to impact 46. They're the most successful VC in Saudi Arabia. So starting uh from the grassroots tell me about your story. How did you get started in investing? How much of it was luck? How much of it was hard work you know and and what made you so successful?

[00:01:58]>> Thanks a lot Somi for this opportunity.

[00:01:59]I feel really uh honored to be part of this uh interview and podcast. I hope uh the viewers and listeners enjoy our discussion. Uh and thank you again for the invitation. how it all started. I guess uh of course there's a lot of luck along the way for sure. Uh but I'm sure there is a there is also a thread that connects everything together. Um my background I started my career in investment banking. Uh moved to Riad actually just to try out myself in investment banking. Um came to love the city and like the energy and uh stayed ever since. After investment banking, I moved on to uh some uh entrepreneurial uh ventures, different entrepreneurial ventures. And I think uh my connection to the startup uh world started with which was founded around 2011.

[00:02:57]Uh we were proud to be the first angel investors network at the time. Uh that kept on. I was uh of course I have to remember farid who was the founder and the first person that brought me into this uh uh the the entrepreneurship scene let's say in the kingdom. Uh it was at the time led by passion people that believed in entrepreneurship as a way of changing changing the world really challenging the status quo. It kept on continuing that way until up until April 2018 when the crown prince did the visited Silicon Valley and uh the first announcement when he came back was uh the government's intention to set up a fund program and enable turn on the switch for the digital economy in Saudi Arabia. That was really the turning point when uh I started not just me many people started thinking maybe not do this for fun and passion and uh start thinking more seriously on an institutional level u investment and um started working and luckily uh by 20 end of 2019 we were actually the first fund to be backed by the fund of funds program at the time it was called Munchhat now it's SVC Um and here we are. Uh suddenly what started off as uh just passion and um and doing what you like turned to uh something more serious and a formal setting in a an an investment vehicle. I used all the all the experience and knowledge I had from investment banking from entrepreneurship from my family background uh brought it all together and um was lucky to set up uh the first VC fund in the country. I think timing could have couldn't have been better.

[00:04:55]>> So have you ever actually worked a day in your life or did you always just invest?

[00:04:59]>> Did you like what I mean is like did you did did you ever um >> Yes. Yes. Well, my investment banking, yeah, my investment banking was quite serious and then uh yes, and then the startups of course I did the investment banking was uh quite tough in the beginnings of uh the Saudi capital markets. Uh and then after that I set up u a uh a digital online printing business and that was my beginning I think and that these two experiences shaped who I am in a great way in a in a big way. And how did you go from that to becoming probably were you the first investor that had an IPO?

[00:05:40]>> VC backed company. Yes. Yes, it was the first VC bag was the first was Rasan.

[00:05:46]Exactly. Can you talk a little bit about that experience of those two companies?

[00:05:50]How you took them? Or maybe from the founders perspective, they might say that the investor didn't take us, but you know, you >> No, we we only have you know, you you played a uh you you played an important role um in their success and where are those two companies right now today?

[00:06:08]>> Okay. Um let me start by with our investment thesis.

[00:06:13]At Impact 46, we wanted to uh as I said, we wanted to build something uh something strong, something world class, not just here to uh uh to just show off and participate and rather build and and uh make create an impact like our name.

[00:06:33]Uh so our investment we formulated our investment thesis was which was based on finding and world champ world champions global champions and then looking for equivalent local equivalents that helped us uh start on strong footings and rather than uh trying out new ideas we want we were uh really just going after the bigger bets. So we saw uh in on demand delivery we we saw Dard Dash in the US and uh quickly spotted Jahis and the chefs locally. So we invested into two on demand delivery we saw fintech cla and square and the likes we invested in Tamara Lendo and Hala.

[00:07:20]Afterwards uh on the market in used car marketplaces we saw Carvana invested in Sara here. Uh so that helped us really u uh take the clutter out and and focus more on uh what what will become big companies. Uh now soon after that you enjoy of course the growth we we were excited about the growth the companies achieved. We saw how uh how big they became very quickly grew exponential growth for the first especially the first few years. um we thought our investments were doing well but until then it was still paper paper gains really more than anything of course paper gains are nice especially in VC we see a lot of paper gains uh but distributions are king always and uh that's how uh we came to the IPO idea uh it was new to the market at the first uh tech company a VC backed tech company to go to be listed wasn't uh an obvious u candidate for an IPO. So the first IPO we did it in NEMU just to make sure uh we have blessings from all the different stakeholders and that's when uh early 2022 uh Jah's IPO January 2022 soon after that let's say Rasan um is a signal that the market is not is just is maturing and uh is is thinking more seriously of tech plays. Um, Russen is uh today trading at uh I think uh three or4 billion dollars market cap. Uh so our first IPO we distributed about u 700 $750 million back to investors on the second one we distributed close to $270 million back to investors as well. So uh I think these two IPOs were validation that uh what we're doing is not just a uh fun uh VC investor fun passionate VC investors on the tertiary but it's it was real investment and real returns and real money to investors. So um I think um we're I think what we've done so far is uh is a very good start for what's coming in the future and enabling the digital digital economy in the kingdom needs uh investors that have uh realized good strong uh capital gains and saw distribution saw real returns um to believe and invest more and uh see more investments. go towards the sector.

[00:10:06]>> From my observation, the Saudi market is very uh heavy retail investors. Uh if if um correct me if I'm wrong, but this is what I see and and sometimes when I talk to retail investors, they complain sometimes a little bit about the um uh the state of the markets if if the market is down a little bit. as an investor as as a VC that you you know that invested in some of these companies that have gone ahead and IPOed um what's the afterare in a way you know like how how do you um continue the investor relations and uh how do you continue the communication with retail investors that then go and buy the shares and then maybe they look at their the shares going up or down and how do you communicate with that because with them because I I sometimes feel like your work doesn't end when it IPOs. A lot of times, you know, it continues and and do you ever wake up in the morning thinking, "Oh my god, now I have to deal with that."

[00:11:06]>> Absolutely. Yes. Very true. Tell me, very true. Yes. IPO is just Yes. A lot of people think of an IPO as a as an end point when it's just really a new beginning. I fully agree. And uh more often more often than not, it actually brings a brings in a heavier burden than you thought before coming into the company. Um so there isn't an easy way to uh to manage uh investors and shareholders uh communication. It's uh it's just continuous uh disclosure and continuous continuous communication.

[00:11:44]Sometimes you're u I mean and it only all depends on so so many different uh dynamics. markets of course financial performance is the key I think is the only thing you can influence and it's the biggest it has the biggest uh contribution towards uh stock performance hopefully um now when you you mentioned uh investors uh retail investors um moment how they uh sometimes complain about performance when it's not really uh in one's control.

[00:12:23]You you don't always uh control uh your performance. You can try and uh hope to be to do well uh but it doesn't always work out. Of course, you have to know that uh sometimes it doesn't. Um I would say I focus on the success the underlying success in financial performance of the companies.

[00:12:47]If you look at um for instance let's if you look at Russen for instance when we first uh start talking started talking to the market to the company I think they were generating around 40 million real of revenue or so uh that was uh in 20 in 21 by the way 2020 2020 early 2021 um they just announced last year's financials 2025 so that's five years ahead. They've generated 650 million realale of revenue, 260 million realale of net income. Um it only tells you that technology the exponential growth you see in technology is difficult to match anywhere else. Um we still have a very low representation of technology in our index. Uh I think there is a big room to see more technology companies being listed and uh forming part of the index and part of the wider economy really. Uh even if you I mean still 650 million real of revenue um is of course big for us but in the bigger scheme of things it's still a small part of the economy. Uh our hopes to our hope is to see technology contributing much bigger a much bigger slice to the economy and uh diversify the overall economy uh replace uh the the uh let's say conventional sources of income to u gen generate uh new and sustainable uh income sources.

[00:14:26]>> All right. So now it's my understanding that you're um on the advisory board of uh CMA, right? um which is the capital market authority here in Saudi Arabia.

[00:14:37]Um so from that perspective, how's the regulator dealing with and and communicating with the market when these discussions happen?

[00:14:46]>> So we came a long way. The capital market authority was set up in uh 2004 I believe. Um and back then it was uh close to uh let's say more than 90% of trades were uh were all retail investors. So the regulator and the government had u a very big heavy oversight role. uh they had to uh really make sure uh as much as possible fairness and transparency is there and they were uh so they were very meticulous and rigorous in reviewing every every offering every transaction.

[00:15:27]They were they had to be a part of uh a big they had to play a big role in the market because of the nature of retail investor denominated market. today. Um I mean we've came uh we've evolved I think retail is uh is less than 40% today of the of trading. Uh so that helps um that that means the the remaining is all institutional sophisticated investors uh that know what they're doing and uh hopefully u don't require as much uh let's say protection and uh and interference as much as we used to. So the CMA has also uh evolved in its approach towards uh regulating the market and uh they took a more riskbased approach rather than a control of every everything approach that like it used to happen in the past. Now it's it's more around disclosures. Just making sure you're making the right disclosures uh and communicating the what you need to communicate and then uh let the market play its role and uh the different and the dynamism of the market uh should lead us to the right outcomes hopefully. Um unfortunately we still have the culture of uh blaming blaming the regulator for anything that goes wrong with uh with financial performance for instance which isn't really never linked really I mean uh someone that writes the rules uh doesn't really influence prices or uh cannot influence uh financial performance of these companies. uh but unfortunately we still have that that culture within uh retail investors especially u I hope we're we're gradually getting rid of that culture um but uh it's not out yet I agree uh you see in discussing I'm sure in any majus or any meet in Saudi complaining about the stock market as a daily staple and go after companies and and and take it personal out from the uh the normal let's say market criticism you would see in any other country where uh people would be more uh focus on the general view on the index on uh >> the macro >> the macro uh yeah I know the people here take I mean in Saudi still take uh the stock market personally >> this is kind of an important conversation because now we We're attracting international investors. We are telling international buyers to come and also invest in the Saudi stock market in the you know Saudi ecosystem.

[00:18:26]Um and uh I think that communication is more important than ever and we need the Saudi uh population to be very bullish about you know the Saudi stock market so that the international market also comes in and says like we want to be part of this. Um so why do you think do do you feel that in some ways the Saudi stock market is a little bit more volatile or less volatile than the uh global stock market or the US stock market? Um the reason why I'm asking is that sometimes the smaller a market is the more volatility it see sees. um whereas in a in an environment where you know you have lots and lots of companies the volatility kind of um evens out a little bit. So so what's your thoughts on that?

[00:19:17]>> Okay first of all we are the largest market in the region so it's not a small market anymore and um and I want to say when I said people complaining about the stock market by the way it's a mixed bag a lot of people also h when they're uh they happy they brag about their gains and uh talk about them every day. So it's not just uh you probably hear the criticism of people that are upset but there there are also the people that are happy about it and brag about it and it it speaks for the culture of uh uh being connected to the market. I think it engaging uh the wider population is also helpful and we don't want to lose that completely. We just want more institutional more uh sophisticated investors. You said something you asked about the volatility of the market. I agree. I think uh Saudi does Saudi market is probably I haven't done uh the math exactly but I would expect it to be more volatile than others simply because we're a commodity-led economy and u that's by nature more volatile than other industries and uh it trickles down to stock market. At the end of the day, stock market is just a reflection of the economy's performance. And uh if we're uh if we're our biggest export is oil and commodities, we'll we're bound to uh be affected by price movements there. So we're uh well it is volatile and uh we are we are uh grooming and um attracting uh institutional investors and um it's already denominated the market is already dominated by u institutional investors. So um I think um any international investor coming in will find uh that it's the market is a lot more developed than uh most people think. Um it's uh and and you'd be comfortable to know uh that we have a very very strong regulator that's uh uh very serious about uh market practices and u making sure uh all the participants are adhering to the rules and u play by uh the rules. I think uh I'm proud to be part of uh this part of the let's say evolution of the Saudi stock market and um I think u the future will also will only say show how uh what a big role this market has to do and for Saudi and the wider region as a whole. I think uh what uh from what I see the uh how the markets are uh are becoming interconnected uh I think Saudi stock exchange has a role to play for the wider region not just the Saudi economy and uh I think the regulators are uh working hard to make that uh that hopefully a reality >> in general how correlated is the Saudi stock market with the global stock market is it like how much how on a let's say on a scale of one being completely decoupled to uh 10 being completely correlated where do you think roughly it s it's >> becoming a lot more connected I'll uh >> you just reminded me of uh yes I think uh a while back it was u uh if I'm not mistaken around uh around Christmas day and Saudi saw a very I think it was one of the lowest uh trading volumes um it tells you that we're I this is new to Saudi that uh the dependency on uh foreign or international investors playing a big role in the stock market uh is still I would say relatively new to uh to many people. Uh so you see uh these observations are becoming a lot more visible now. Um we're becoming we're moving yeah sometimes sudden movements in the stock market are uh not explained by local uh events um are better explained by international events. let's say things happening in uh in in the US or uh elsewhere uh China you'd see you start to see uh connectivity on a a scale we haven't seen before or we're not used to um correl exact correlation I haven't done the math really but I expect it to be very I mean quite correlated to >> so so like increasingly correlated >> increasingly correlated yes Yeah. Um I don't know if you feel comfortable talking a little bit about the geopolitical situation in the region right now. So when people from the outside look at um Saudi Arabia as a place to invest, what would you say to them? you know, like maybe when you go to London um and you meet um and the reason why I say London, I know because you're you're in London quite a lot, but like US, wherever, you know, when when you meet uh international investors that are thinking about investing in the Saudi markets, if they ask you that question, what would you say to them? Okay. I think uh if you look at let's say from our the lens we used was uh in technology investing uh even if you were you took a step back and sat down where where would I invest in the region uh uh and this without the fact that I am from here and know the market a big population techsavvy and a coherent population let's I know people that uh invest in other countries where you have uh multi different communities within the country. I think Saudi it's one language, one culture, one uh identity.

[00:25:34]you I mean it's um it's worthwhile it's worth your time to invest in um in doing something valuable to this uh coherent uh population just like u any other country I mean it matter size does matter and uh I think uh in if you're looking for something that's in the region that's worth your time uh I think the Saudi market give really good uh are appealing let's say uh attribute >> here at Argonom they love numbers so uh I ask every guest to share something number heavy statistical something that um makes us wonder how did I not know this so I was wondering whether you have any um interesting numbers to share with us >> okay so uh it's interesting to know that let's say the first the billion dollar we distributed uh was uh on the back of an investment of around uh let's say $150 million only. So uh so so it was six times uh the investments we made uh these are total funds till then uh so not specific investments but even the overall funds uh so I think the the returns we've generated are uh real and and uh enticing. Now um maybe something around perform financial performance to show of underlying companies uh to show the scale of uh growth that we've witnessed. I can remember I remember Hala for instance a fin it's a payment company that we invested in and it also ventured into financing lately when we first engaged the company the revenues they were generating were around 8 8 million real so about $2 million or so last year they finished the year at 500 million real which is uh so that over the span of uh five year or six years from going from $2 million to $130 million is quite an achievement. uh these things only happen in technology I guess and that kind of uh growth you can only see in technology and that what's uh keeps us going every day and uh keeps uh the energy we everyone in the team thinks uh does have that belief if I miss this opportunity it might become the next billion dollar opportunity for the firm and uh you really it's not easy to spot where the big uh the big uh investment will come from uh so um yeah that's what keeps us going and uh I hope we're we continue to deliver the same uh track record we've been delivering. It's obviously not as continuing to deliver is not as uh easy as uh doing the first uh few few years of success successful investing. Uh but we're working hard to keep it uh keep it and maintain it that way.

[00:28:47]>> Yeah. That's like having a a hit record.

[00:28:50]Um and then you're expected to keep producing hits.

[00:28:54]>> So um I have a couple of questions. One is about your next fund. So you you're on your third fund now. Okay. So we can talk a little bit about that. But before we get to that, of the portfolio that you have now, >> how much of it is pure technology and how much of it is infrastructure or are you do you mainly focus on just technology? Is that how you you think of your um >> uh portfolio and within technology I feel like it's like um a spectrum of companies that are again even though they are technology in on some levels they are infrastructure for example let's say if you invest in a company that is similar to Uber you know let's say Kareem or if you invest in Tamara you know these are companies that yes they are technology but also they are filling um a layer of infrastructure, right? And then there are things that are a little bit more on the spectrum of, you know, not dayto-day needs, but things like gaming, you know, where it's like it becomes entertainment and and like next level. Talk to me a little bit about how you think about this uh spectrum of companies that you invest in and then tell me a little bit about your uh your fund three and and where your focus is going. So uh yes these large companies especially the listed ones and uh a few others we're uh working with I also view them as infrastructure uh enablers let's say for the wider tech ecosystem I think you need big technology players uh to enable uh other other companies uh it starts it starts from uh let's say the engineering talent that you have you need a big a really big pool of uh different uh engineers to be working on these uh companies and solving daily problems bringing uh solutions to these problems and and that proliferates across other companies. Uh so uh I I really I agree with the notion of u having big technology companies is actually uh a bedrock for others to flourish. you can't have uh although you do sometimes have uh companies that flourish on their own but uh I think it's helpful to be within a country or a city that has uh a few large technology companies it only helps other companies to emerge. uh so yes Jasen and Hal and many other large tech companies I think uh do form a foundation for other companies to u to build on you need the talent they're attracting to do to share knowledge and exchange ideas u the other you asked me about fund three and what we're doing and um again uh we we haven't invested in infrastructure let's say hardware per se but it's more uh uh we started uh getting into uh cyber security for instance which we think is also we we also view as part of the infrastructure required for any tech uh ecosystem and we invested we also followed on a few of the investments we've uh uh uh that were invested in uh from previous funds.

[00:32:28]Uh we deployed about 60% of the fund u most but on a smaller number of companies. I think it's uh 12 companies uh which is very different from what we used to do. Uh I think it also align goes in line with what's happening globally. you see uh lesser deals but much bigger ones. Uh consolidation and um let's say winner takes all movement is uh the the sad or uh difficult reality in in technologies that u in many cases winner does take all. So u we seeing bigger investments in fewer companies.

[00:33:13]Um uh I will um probably so we just we just announced our latest investments out of fund 3 which is uh cash in it's a 60 million real series E series A round uh that's a techn that's a company that focuses on enabling uh gas stations uh with a digital infrastructure. So uh gas stations have long been uh let's say an analog island in a in a digital ocean.

[00:33:46]So it was uh very uh for different reasons uh just never or were late in digitizing uh cash in uh came up with a solution that's uh very powerful robust and complies with with all the regulations and uh uh helps all the different stakeholders the gas station the users the corporates um and connects uh all the dots together. The in the they're already active in 500 gas stations and you'll see them across the kingdom in uh I think in in the next three months they're expected to reach uh 1500 gas stations. Um that resembles a a champion we like to back a company that uh uh disrupts and reshapes the reshapes the market it's in. Uh if you look at uh yeah it reminds me of what we did with Rasan for instance. Rasan uh I think over the span of uh five years disrupted the way insurance is distributed in the kingdom. Uh today the the company is larger than most underwriters most insurance companies um rasan um and they only do distribution uh distribute and it's the I believe it's the single largest uh distribution channel for uh auto insurance at least.

[00:35:20]>> Very cool. Now talk to me a little bit about gaming. So where did your interest in gaming uh begin? because um it's my understanding that there are only a couple of VCs at the moment in Saudi that are investing in gaming. Um it's Impact 46 and Mar Capital. Uh there may be others that I'm not aware of, but um uh obviously the crown prince is very um bullish on gaming and and and he's a gamer. So um you know we have spoken to um multiple um you know gaming you know savvy games and and and Mariah and and and I want to know where did your interest in gaming begin and on a spectrum of um you know uh infrastructure to let's say what do we call the other side of it? Let's think of like if you have infrastructure players, >> application layers, >> application layers and and maybe um things that are more on luxury side for me like I think of gaming more you know nice to have you know what I mean? So whereas for because you know you still you definitely need the delivery and food and you know before you get to gaming right. So yeah so so how do you think of uh gaming in that? Um >> nice. Well uh yeah I guess the success we saw in VC uh got us excited and we started thinking about what other areas we can uh also uh help grow and uh and fuel gaming. Uh I think uh I think it's long overdue.

[00:36:52]Saudi has the highest uh gamers per capita spend in the region in the world actually in uh in some instances. U so and yet uh we don't have uh we we barely have any studios locally grown uh homegrown studios. It's mostly consuming games from uh from outside. Uh I think it's long overdue for uh someone to start backing local studios and uh uh helping them uh uh generate and uh publish games that are from Saudi to the world. Uh I think uh we are already if you see Saudi's participation in the esports world cup uh the success uh our gamers have had and uh the u the time they spend and uh and the resources they spend on games I think is worthy of uh is enough for us to u to start being on the other side and maybe uh publish and create our own games. uh we decided uh to invest in Camila after uh I mean a long and rigorous uh process.

[00:38:14]Camila is a game of uh of course the main game is a belot game which is a a daily staple for Saudi. It's a it's an identity. It's a cultural identity for us. I think um the enga level of engagement uh when Camila users and gamers uh is hardly seen anywhere else in mobile games is uh for a 25 minute average session time is just uh let's say unheard of in the industry and it shows you um how how big uh mobile games are for Saudis and how serious they take their mobile games. I think um of we're uh we're not going to stop at Bel of course uh we already u we'd like to use this platform I'm talking uh to launch other games and u scale across an engaged uh user base. We have a million active users that uh come to our game every day to play and enjoy. I'm sure uh they will be open to try out other games. We already we launched Jakaru recently and that's seen very good success. Uh a few other games in the pipeline. Uh and I disagree with the notion you said about game games not being very uh let's say essential to daily lives. I think they are. Never play the game.

[00:39:53]>> You never play.

[00:39:55]>> You know, >> tell me that you're just too serious.

[00:39:58]Take some take a break.

[00:39:59]>> Like literally, I have played 20 minutes of m Minecraft in my life.

[00:40:03]>> A Minecraft only. No, >> 20 minutes. And that was like some kids were showing me what to do and I like eat this bottom alone so you don't die.

[00:40:11]>> No, no, no. We will we will convert you.

[00:40:14]We do have I mean uh mobile g mobile mobile are in our pockets every day and um having uh some fun and entertainment throughout the day. I think uh is uh is only normal for the people we we're gotten used to being engaged all the time. Uh we want to fill all the time all our times with something to do and no better thing to do other than than games. Uh if you also think uh ahead a little bit, I mean uh with all what we hear uh about what's coming in the future, uh the robots and AI will do the work. Uh >> and we just sit there and play games.

[00:40:57]>> We just sit there and play games.

[00:40:59]Exactly. Have fun. What better thing to do than play games? At least it's it's uh peaceful and it's better than doing other things.

[00:41:10]>> Yeah. Apparently in the future we will not need money.

[00:41:13]Yes, >> there's a conversation, right? We're not going to need money because the mo the um robots do everything and we sit there and and play games.

[00:41:20]>> Exactly. Enjoy our time and play games.

[00:41:23]>> I really need to up my gaming uh skills there.

[00:41:26]>> Yes, very much.

[00:41:27]>> Okay. So, so you talked about gaming, you talked about the infrastructure.

[00:41:31]Talk to me about uh your third fund and where you're going with that. How big is it? you know what's the uh the scope and what you're thinking in terms of what type of companies.

[00:41:43]>> Okay, it's uh it's about60 million fund. Um we're 60% uh 65% uh deployed. Uh we think we will uh we will hopefully fully deploy the fund by year end and then uh think of uh next steps.

[00:42:03]uh as I mentioned earlier it's the number of investments is less than what we're used to but it's bigger bets on fewer companies uh the focus is still the thesis still remains the same uh what worked elsewhere will work here uh but we've evolved into SAS businesses uh more software and more cyber security plays uh are a bigger piece of bigger piece of the fund three.

[00:42:36]Uh we also have we we also have uh the uh existing uh companies we followed on with FinTex and uh marketplace models continue to be part of the fund but a smaller portion relative to compared to previous funds. Uh people always ask about AI. Of course, yes, AI is part of uh all the companies, but uh we've also made uh two bets uh specifically on AI. One is a conversational AI play.

[00:43:14]>> What's it called?

[00:43:15]>> It's called uh Moj.

[00:43:17]>> Mhm. Oh yes, I know Moj. Yes. that's uh doing very very well um helping companies manage their u uh customer service centers and uh inbound outbound calls. The company's shown tremendous growth last uh year and a half that's been in I think yeah I think year and a half it's been in existence. Uh so it's a very young company but uh very ambitious and uh already making uh big strides in in its field.

[00:43:49]>> What's the other one?

[00:43:50]>> The other one is Lucidia.

[00:43:52]>> Oh yeah, of course. Lucidia it's a customer experience. So it's a wider uh focus not just conversational but it's uh also had developed strong u knowledge in its own NLP and local dialect and uh it has a very strong uh social media listening platform that's uh widely used by a lot of enterprises in the kingdom and the region. Uh uh yeah and we're excited about these two companies. We continue to look for more.

[00:44:32]Yep. The challenge in AI is that we need a local differentiation. Uh it's not just investing in in another AI company. It has to prove that being local does help or being from the region helps it win business over other players. uh and there is uh and that's what we continue to focus on and u slowly discovering uh something new every day.

[00:45:01]>> On the AI side of things, the question I have I guess is maybe less about the type of companies but more how is AI changing your thesis as an investor. So for example when you started 10 years ago um roughly right. So to now surely it has changed your investment thesis um because of the way that you do the research the way that you think about how quickly some of the say SAS models may become um obsolete because of new AI uh applications that come on board. So uh so how do you think of that? Um, and how does it uh impact your your investment thesis?

[00:45:45]>> It just uh it forces you to sharpen your your view and have a uh take uh a stronger position on uh on what you believe in will work in the future. Uh it's not you can't it's not viable anymore to be just a generalist and uh and hope that uh the tide will lift all votes. Uh you need to be more focused. You need to pick winners that dominate their space.

[00:46:15]They have that have developed sector knowledge that's difficult to mimic by others. It it tell it it makes you uh it just makes you uh focus more on what matters and uh forces you to remove all the clutter and um just can't you can't rely on the on someone cutting you slack. It's more u focus uh on sector knowledge. I think uh and I I've heard I read a lot about the notion of uh say SAS dying because of AI. I don't buy into that thesis. I think uh you still have uh sector knowledge that's not easy to be copied by AI. Uh I also think uh uh modeling yourself around the users uh and utilizing the data sources you have the data feeds you have around them is also not easy to be mimicked by uh AI very quickly or at least cannot cannot replace it cannot be replaced quickly by AI. uh for now at least uh you need to obviously work harder to uh increase your uh the um uh stickiness of the product and uh how and model it more around uh around every user uh but you you do still have an advantage over AI till now >> as we come towards the end of this conversation another area that you're very active in that we should talk about is private credit. So when did you start thinking we've cornered the market in VC we've done really well here um you know let's look at some of the other areas um such as private credit >> credit in general I would say yes credit >> credit in general okay about uh two years ago we saw an opportunity in u part taking part of uh this development development of the debt capital markets in Saudi um debt remains a small part of the capital markets today and equity is still uh the bigger uh part of the market a much bigger portion I think and that that phenomena is observed in many other uh countries in the world uh I think u we believe uh this will change in the future Saudi debt capital market is is poised to grow and uh there's room to develop it further uh we see uh without getting into historical reasons for why it is the case uh I rather focus on the opportunity going forward. We see strong demand by uh corporates uh wanting to issue paper on u the Saudis the main suk and bond market and we thought uh it would be uh a good diversification play for us as a firm uh to focus on u a different type a different part of the market. Um we're active in the uh let's say higher yield uh paper uh today by the way marked the uh listing of uh Rya Suk u which is first of its kind uh a tier one for a non-bank financial institution uh it's a a path that was uh or a f a funding line that was never available for uh non-bank financial institutions in the past. Now with the opening up of uh the debt capital markets, we see fund flows uh that that were never seen before. And uh we're excited about the future. we have uh the role we're trying to play is uh bridge the gap uh as I said especially in the uh high yield market where uh it takes um uh they uh you do need to exert judgment in choosing the right uh issuers uh for this uh financing tool and um it's been uh I have to say it's been rewarding so far we have uh a healthy pipeline and uh many u many school issuances coming to the market soon. We also developed a uh a private uh debt market or u a direct financing funds let's say u the first was uh uh or all all the both of them were f linked to existing portfolio companies of ours. So uh we wanted our uh first experience in uh direct financing funds uh and private credit to be with a partner we know very well which is a portfolio company of ours. Uh so we set up the first uh uh fund to finance small merchants that use hala uh hala payments uh payments as a payment solution. they can uh expand hala can expand their offering to its merchants.

[00:51:43]By the way, it has 170,000 merchants across the kingdom uh to offer credit, not just payment. So today a small merchant can uh fund his uh inventory and uh his working capital requirements um on the fly from uh an application digital uh a fully digital experience and um we are proud to be part of uh that enablement. So, uh yes, I think uh credit uh the credit capital markets are uh are an area of the market that's uh seeing really good growth and uh we're hopefully capturing part of that.

[00:52:24]>> Amazing. All right. So, you've covered um infrastructure, you've covered uh private credit and and debt market in general, gaming, nice to haves, essentials. What's next for um Impact 46 as you you know, expand into your next um phase.

[00:52:43]>> We're uh we're actually look closely looking at the uh real estate market and opening up uh to uh the market to freehold uh areas where uh a lot of foreign buyers are expected to step in.

[00:53:00]Um we think we have a role to play in uh the real estate development market as well. Um but that's still in the making and uh hopefully come we'll uh announce it in due course. In some ways you are like um an author who has or or or you know an artist who has won several awards and you know like been very successful and uh you know sold millions of copies >> and people look at you and they're like okay this VC is so successful and and uh you know they have uh invested on in all of these companies bet on these companies that have won but in in the must be but there must be some areas where you are still having doubts like do you ever wake up in the morning thinking am I doing the right thing? Am I betting on the right um you know opportunity and uh what goes on behind the scenes you know in your in your brain when you wake up in the morning and think of look at new opportunities.

[00:54:03]Of course, finding new the next big opportunity is what uh is what you carry with you every day, every moment. Um yeah, I think uh we have a weekly pipeline meeting where everyone in the investment team comes and uh shares what he's anything he's any exciting company he met throughout the week. Uh and that's where a lot of uh the questioning happens and uh you start doubting yourself uh when you when you uh let's say shoot down an opportunity or uh or should I ask more am I am I cutting it off too early. Um that worries me a lot.

[00:54:48]I mean as much as uh you need to show uh confidence uh for different people to uh to learn from the patterns uh you also worry that you're uh you're shutting down someone who just didn't communicate properly the message didn't wasn't deliver wasn't delivered in the right way. Uh uh and a lot of the good founders uh are actually not very good communicators either. So it also makes you uh worry a lot about missing uh the big opportunity. That's certainly one of the worries I always uh carry with me.

[00:55:28]Um and then um yeah, every once in a while uh a young uh investment team member uh uh let's say asks you an unexpected question and uh you find yourself uh that you there is an area there is a lot you you need to learn um and uh I think uh that that helps you grow these doubts uh these surprises uh helps you grow and um keeps you uh alert a lot more.

[00:56:02]>> Yeah, I love it. It's it's basically like humility is a good trait to have even if uh you are very successful.

[00:56:10]>> Absolutely. Of course. Yes, for sure.

[00:56:13]>> Thank you for sharing this conversation.

[00:56:14]It's been amazing having you and honestly I'm in awe of um what you have achieved and um it's been amazing having >> Thank you so for this again and uh I look forward to listening to this podcast and others. Thank you.

[00:56:29]>> Yeah, absolutely. Thank you. Thanks a lot.