Saudi’s new asset class VCPE needs incubational environment, says Jada

Dubai - Jada has participated in providing investment capital to over 250 promising companies, along with support for their development and growth.

Saudi Arabia’s new asset class Venture Capital and Private Equity (VCPE) needs support, empowerment, and an incubational environment to thrive, says the latest report of Jada ‘Year in review 2020: Financing the future of Saudi Arabia’.

Jada’s mission as a fund of funds is to provide funding to Saudi SMEs through commercially sustainable investments in private equity and venture capital funds. As such, Jada needs to support these funds through investments as well as help mitigate risks so that the funds can continue their efforts to boost development. Jada plays the role of a facilitator and since 2020, it has been a priority to raise awareness of the importance of this sector and activity for the future of the Saudi economy.

Jada was created to promote the development of a thriving Venture Capital and Private Equity (VCPE) ecosystem, which could in turn finance the growth of small-and-medium enterprises in Saudi Arabia in a sustainable manner. Launched by a resolution of the council of ministers, Jada was established by the Public Investment Fund with an investment capital of SAR 4 billion (approximately $1 billion).

The creation of Jada is a critical component of Saudi Arabia’s Vision 2030, the Kingdom’s comprehensive economic and social development plan. Jada seeks to partner with VCPE funds that are focused on the Saudi market and committed to international best practices in governance and fund management.

Mazen Ahmed AlJubeir, Chairman, Board of Jada Fund of Funds, said: “Since its founding, Jada has aspired to serve the private sector, particularly SMEs and startups, by promoting the development of a vibrant ecosystem of Venture Capital and Private Equity (VCPE) investment funds. In 2020, we committed SAR 1.14 billion ($304 million) to 14 investment funds, and are proud that our activities have begun to positively affect the lives of our fellow citizens and residents.”

Jada has participated in providing investment capital to over 250 promising companies, along with support for their development and growth. These companies in turn have been able to create many promising career opportunities for our citizens and residents, as well as to improve the lives of consumers with new and better goods and services. We are also proud that our activities have contributed to an accelerating trend in SME investment, with the past year recording 55 per cent year over year growth for venture capital funding into Saudi startups.

AlJubeir said: “We aim to contribute to the development of a thriving economy through continued efforts to support SMEs in the years to come. On behalf of myself and my colleagues on the Board of Directors, we assure you of our dedication to the vision and its objectives and we express our deep appreciation for our nation’s wise and ambitious leadership, as well as the great support and guidance of our shareholder, the Public Investment Fund.”

Jada has entered into partnership agreements with investment funds to finance emerging companies in consumer discretionary, information technology, and financials, as well as in the F&B sector. In 2020, Jada participated in 177 Seed, 61 Series A, 9 Series B, 2 Series C, and 1 Series D funding rounds. In 2020, Saudi Arabia registered a 55 per cent increase in total funding deployed to Saudi startups, reversing the slowdown witnessed across the rest of the Middle East and North African (Mena) region.

Adel Al Ateeq, chief executive officer, Jada Fund of Funds, said: “As we advance into 2021, we are keen to delve deep and address the remaining challenges that Saudi Arabia must face before it fully unlocks its economic potential. Therefore, Jada will continue to support funds that identify the most promising ventures.”

The H1 2021 Saudi Arabia (KSA) Venture Investment Report from Magnitt shows that in the first-half of 2021, the VC Funding in Saudi increased by 64 per cent year on year, accounting for 94 per cent of VC capital invested in 2020. The nation witnessed record levels of half-yearly capital raised in H12021 accounting for 14 per cent of Mena VC funding. Saudi surpassed Egypt to rank second by share of total Mena funding while accounting for 22 per cent of the region’s VC transactions. — sandhya@khaleejtimes.com