< Previous30 CEO MIDDLE EAST NOVEMBER 2021 EXCITING TIME FOR SAUDI VENTURE-BACKED STARTUPS In an exclusive interview with CEO Middle East, Prince Khaled bin Alwaleed, CEO of KBW Ventures, discusses Saudi Arabia’s entrepreneurial ecosystem, his investments, and the booming food tech market BY GAVIN GIBBON Savvy investments. Prince Khaled was the first venture capitalist in the region to back plant-based and future food startups VENTURE-BACKED STARTUPSNOVEMBER 2021 CEO MIDDLE EAST 31 VENTURE-BACKED STARTUPS rince Khaled bin Alwaleed’s mission to revolutionise the hospitality and food service industry by introducing vegan options on menus continued its journey across the Middle East recently, landing in Kuwait, and now has just launched in Saudi for Riyadh Season. Folia, meaning ‘from the leaves’, in Latin, was developed exclusively for Four Seasons Hotels and Resorts, and is the product of a partnership between internationally acclaimed chef Matthew Kenney and Prince Khaled’s KBW Ventures. It has been delighting diners in Bahrain and the UAE, and now visitors to the Four Seasons Hotel Kuwait at Burj Alsh- aya will be able to enjoy the fare, as will guests at Riyadh Season’s Al Murabaa fine dining Pavilion by Four Seasons Hotel Riyadh. A known pioneer in tech investing, Prince Khaled was the first venture capitalist in the region to back plant- based food and future food startups. He’s among those driving solutions at scale related to food security, human and animal welfare, and the pressing issue of climate change. Through his various business enti- ties, Prince Khaled maintains holdings across three continents. Honing in on sustainable ventures, the KBW portfo- lio includes investments in plant-based initiatives, alternative proteins, green technologies, and more. As an early adopter of plant- based foods and alternative protein, he is at the forefront of global plant- based investing, initiatives, and advocacy. He has developed a deep network of international industry specific contacts, across both pri- vate and public sectors. In an exclusive interview with CEO Middle East, Prince Khaled discuss- es the opportunities which exist for startups in Saudi Arabia and his in- vestment strategy. “THE GOVERNMENT’S ROLE IN SETTING UP THE PRIVATE SECTOR TO ENCOURAGE ENTREPRENEURSHIP HAS CHANGED EVERYTHING” P Well versed. Prince Khaled bin Alwaleed with host Kevin O’Leary at the Misk Global Forum How do you view the startup environ- ment in Saudi Arabia? Ever since Vision 2030 and the acti- vation of capital put to work to foster entrepreneurship and grow the start- up and SME sectors, the environment is strong. Previously, we had many barriers to entry; everything from bureaucratic red tape, to lack of funding, to psycho- social issues like stigma around failure, and even negative sentiment around not joining your family business to do your own thing. The government’s role in setting up the private sector to encourage entre- preneurship has changed everything. 32 CEO MIDDLE EAST NOVEMBER 2021 VENTURE-BACKED STARTUPS Entrepreneurial ecosystems take a long time to transform this effectively; Saudi has done it in a few years. You don’t have to dig anymore to find news about Saudi startups, and it’s hard to keep track of how many homegrown VCs we have now. I’ve never been more excited about our potential to produce and support globally-relevant start-ups as I am to- day. I was a judge for the Entrepreneur- ship World Cup in Saudi last year, and the support given to these startups – fi- nancially and otherwise – by Misk, the Mohammed bin Salman Foundation, was unparalleled. It was an honour to take part, and I’m looking forward to supporting these initiatives as much as I can on ground in the country. $200BN The estimated value of the global seafood market Tech venture. UAE-based immersive video VR app 360Vuz has signed a partnership agreement with Saudi Professional LeagueNOVEMBER 2021 CEO MIDDLE EAST 33 VENTURE-BACKED STARTUPS How do you balance investments in Saudi Arabia and abroad? KBW Ventures is location agnostic. We are looking for the right ideas, and it doesn’t matter where they are located and where the founders are from. We’ve invested in so many different geographies now, and every time it came down to the business model, the poten- tial, the founders, and a few more met- rics. But none of those factors had to do with location. I’m particularly proud of our in- vestment in Blue Planet Ecosystems, an Austrian startup, as just last month they signed two MoUs with The Red Sea Development Company. This was super exciting for us as a team, as KBW Ventures invested in Blue Planet two years ago. For a Saudi company to recognise the sustainability edge and the relevance of their technology, well it just was fantastic. It was a great mo- ment for us. Another of our portfolio companies, a UAE-based immersive video VR app called 360Vuz, just signed a partner- ship agreement with Saudi Professional League. This was huge for us as well, given the massive visibility of SPL. How has Covid shaped the business? For KBW Ventures, we have a very di- verse portfolio so the impact of Covid on our company was limited. We are back- ing some food tech businesses and plant- based products so to be quite honest, in this specific sector, it increased the visi- bility of a lot of our portfolio companies. People woke up to the importance of alt proteins and we’ve seen a big shift in awareness around these startups. A few KBW Ventures portfolio companies signed strong deals recently, includ- ing cell cultivated seafood BlueNalu. Europe’s largest frozen food company Nomad Foods and BlueNalu signed a ‘first of its kind’ agreement in Europe between a consumer-packaged goods company and a cellular agriculture food tech company. The launch of Folia in Saudi in time for Riyadh Season actually came at a time when so many more people are looking to experience next-level plant- based dining. Post-Covid, there’s so much more interest in nutrition, and incorporating more plant-based meals into the average diet. Where are the biggest opportuni- ties in the plant-based market? What about food tech? Seafood and cheese; both segments are really improving in terms of prod- uct offering. There’s a massive market out there for both. Cultivated meat has enormous potential when you take into account the meat industry is worth al- most a trillion dollars that will only double by 2050. The vast inefficiency of the tradi- tional meat industry is now being ex- amined more closely, so the huge con- glomerates are shifting attention to cultivated meat and dairy. Dairy is another industry that is growing beyond imagination. Dairy companies are having a hard time keeping up with demand and, again, the vast inefficiencies of factory farm- ing is only fueling the interest in these emerging technologies. For food tech companies that use cellular agriculture, KBW Ventures has invested in TurtleTree, specialising in milk; Upside Foods, for meat and chick- en; and BlueNalu, focused on seafood. We are always considering new invest- ments in the cell-based food tech space, and precision fermentation as well. Sustainable investing. KBW Ventures’ portfolio company Blue Planet Ecosystems signed two MoUs with TRSDC in Riyadh “PEOPLE WOKE UP TO THE IMPORTANCE OF ALT PROTEINS AND WE’VE SEEN A BIG SHIFT IN AWARENESS AROUND THESE STARTUPS”SHAKING UP THE REGION’S TOURISM SECTOR KUBE Ventures, the brainchild of long-time friends Michael Levie and David Keen, aims to drive the transformation agenda in the industry by incubating and accelerating hospitality startups BY GAVIN GIBBON HOSPITALITY 34 CEO MIDDLE EAST NOVEMBER 2021NOVEMBER 2021CEOMIDDLE EAST35 HOSPITALITY wo leading figures in the tour- ism industry have launched a global hospitality startup in- cubator in the Middle East as they look to expedite the digital transformation of the sector. KUBE Ventures, the brainchild of long-time friends Michael Levie and Da- vid Keen, aims to drive the transforma- tion agenda in the industry by incubating and accelerating hospitality startups. And according to Levie, co-founder and operations chief of Citizen M, a tech- forward luxury lifestyle hotel brand, its creation is long overdue, in an industry which he says is “sadly lacking” in in- novation. He tells CEO Middle East: “In our industry it’s (digital transformation) evolving very slowly. It’s like watching paint dry.” Keen, an entrepreneur and leading strategist for the travel and hospital- ity industries, adds: “To this day there is not one other hotel company that has even sniffed at being a tech company yet. They don’t need to call themselves a tech company, they can call themselves hotel tech companies or hotech companies, or whatever they want to call themselves. But they’re so obsessed with actually creating this insularised hotel industry that eschews, or certainly doesn’t em- brace, other industries. It knows it needs technology, but it’s hotel, technology and a gulf in between. “It’s a tipping point. There’s no question about it, we’re creeping up a hill and we will reach that tipping point. And even the biggest companies, the Hiltons, the Marriotts, the Accors, the IHGs, know they need to make change “TO THIS DAY THERE IS NOT ONE OTHER HOTEL COMPANY THAT HAS EVEN SNIFFED AT BEING A TECH COMPANY YET” T Innovator. David Keen is the founder of QUO and KUBE Ventures Brand builder. Michael Levie, founder of citizenM and KUBE Ventures and are so weighed down by tradition in many forms.” KUBE Ventures creates and part- ners with startups through two entities: KUBE Circle and KUBE Conscience. KUBE Circle brings together leaders, veterans and visionaries in the hospital- ity industry in a club-like concept. The 36 CEO MIDDLE EAST NOVEMBER 2021 HOSPITALITY community forms a global think-tank for knowledge sharing, education and net- working and will also be its own catalyst of startups. While KUBE Conscience has an ap- pointed board to measure the values and potential of each entity. Keen says: “The brand itself, KUBE, represents fundamental innovation, in- cubation, acceleration of startups be- cause the only way to drive change is step-by-step and point-by-point and company-by-company. And to electrify, to innovate, to energise, to create dyna- mism and entrepreneurialism, through individual startups which will collective- ly drive fundamental change, our belief, throughout the hospitality industry. $30BN The value of hotel construction contracts to be awarded in the MENA region between now and 2023, according to projections by AHIC Industry support. KUBE Ventures incubates and accelerates transformative startups in global hospitalityNOVEMBER 2021 CEO MIDDLE EAST 37 HOSPITALITY “Our purpose is to broadly incu- bate and accelerate startups, it’s to help where we can to form ideas, but more to take those ideas, incubate them and bring them to life. “When they measure a startup, they won’t be measuring the ROI, they’ll be measuring ROC perhaps, the return on conscience. That, for us, is as important to the future success of this industry as anything else.” According to research by Shikhar Ghosh of the Harvard Business School, 75 percent of venture-backed startups are doomed to failure, although statis- tics from Review 42 in 2020 revealed the failure rate for all startups, includ- ing those not backed by VC funding, is closer to 90 percent. Levie says: “We have with KUBE Circle, ourselves, also a group of very like-minded specialists and experience, where we can then lend a hand in mak- ing sure that the usual difficulties and the usual obstacles that need to be navi- gated, the pain of mistake is reduced as much as possible, so that innovation can take place and you get to the accelera- tion stage.” The new incubator was launched at this year’s Arabian & African Hospitality Investment Conference (AHIC) and both experts agree that the Middle East was the perfect region to begin. Keen says: “It’s crucial for us. It’s crucial mostly because of Saudi, to be frank. It’s crucial because the change in Saudi Arabia today is more fundamen- tal to the infrastructure of global tour- ism than anything that has changed in tourism, in my opinion, in the last 20 or 30 years.” Levie adds: “What better grounds to see where east and west meet is actu- ally here. To see the level of investment, of change, of daring, it is remarkable what is happening in this part of the Middle East. “Dubai has gone through a major renaissance and is where it is right now, where are others are going through that renaissance. But this region, the mental- ity of this region and their willingness and eagerness, and what I think is so im- portant is they’re hungry to listen. They don’t know it all, they don’t one-up you, they’re very eager in being the best and there’s nothing wrong with that.” Growth market. Saudi Arabia’s tourism industry is among the most promising in the region Guiding principle. KUBE aims to create a sustainable, robust business models that ensure organisation-wide success38 CEO MIDDLE EAST NOVEMBER 2021 SUSTAINABILITY It is clear that the region is seeing a fundamental shift in mindset, but now we need to see a quicker acceleration of the energy transition, says Greg Ross WHY NET ZERO IS VITAL FOR THE UAE’S ECONOMY ith the launch of Expo 2020 Dubai, the UAE has been catapulted into the spotlight and last month became the first country across the GCC to commit to net zero carbon emissions by 2050. While the government has clearly demonstrated how it plans to achieve this impressive feat, it is less clear how businesses can follow suit and ensure that they too become net zero advocates. For a business like ours, that helps clients meet evolving energy needs, achieving net zero means drastically reducing our greenhouse gas (GHG) emissions and ensuring that the re- maining emissions we add into the atmosphere are no more than the amount we take away. In August last year we set an ambitious target to reach net zero in Scope 1 and 2 emissions by 2030 and work to influence our supply chain to set their own reduction targets. Investors are also stressing the importance of decarbonisation. In the current environment, diversification into activities that enhance ESG ratings and perceived market value are being em- braced by stakeholders. Petrofac is at the heart of the energy transition, and we believe that it is vital to support our clients and partners to develop strategies to reduce their carbon footprint and transform their entire business through the adoption of new technologies that promote a circular economy. Decarbonisation efforts The road to net zero is not easy; it requires a well-defined and actionable long-term plan. We have developed a Net Zero Steering Committee made up of representatives from across the business who can oversee and guide strategic de- livery and take ownership of progressing the plan in their own division. Decarbonisation strategies should focus on a number of key areas including transitioning to renewable power, more efficient use of energy, reducing emissions and transport electrification. Minimising demand through improvements in energy efficiency is another key focus area, and we are leading by example in this regard by incorporating efficiency measures in our offices, facilities and sites. Importantly, these can be put into effect and scaled WNOVEMBER 2021 CEO MIDDLE EAST 39 SUSTAINABILITY up quickly to deliver immediate benefits. For example, in our main office in the UAE, our facilities team have installed smart building technology that now saves the equivalent of almost 3,500 tonnes of carbon each year. There are many new technologies that can provide important analytics to deliver enhanced visibility of energy usage and associated emissions. By using digital tools, it becomes possible to bring carbon into the operational decision- making process. A mix of approaches, including a shift to renewable energy, conserva- tion of natural ecosystems, embedding climate action at the core of business operations, challenging each part of the business to improve the fuel and operational efficiency and progressively switch to lower carbon alternatives are also key. While it is vital that each business considers their own carbon footprint, and what they can do to reduce it, it is impor- tant to also consider your supply chain. If possible, we would advise working in partnership with vendors and business associates to support their energy effi- ciency and emission reduction initiatives. It is imperative to combine long-term commitments with acting now to change the trajectory on climate change. To drive this, we need an acceleration in investment in the new energies sector and an appropriately priced carbon tax. There are several technologies that simply won’t get off the ground and be implemented at scale until we see a significant return for reducing a business’ carbon emissions. Great opportunity While the UAE’s commitment should serve as an important impetus for companies in the region to aim to- wards net zero, businesses need to take a more proactive approach. There is no one-size-fits-all solution, we have to deploy all the tools in the box and short-term fixes will not suffice. It is clear that the region is seeing a fundamental shift in mindset, but now we need to see a quicker accelera- tion of the energy transition. As we look to increased ambition and urgency that will inevitably come out of the UN Climate Change Conference of the Parties (COP26), I believe the circular carbon economy is a great opportunity for the UAE, and the wider GCC. This plays to the strengths of the region and the national oil companies, the infra- structure is in place, and rather than just trying to get rid of carbon, we also focus on reusing, recycling, and removing as we transition towards net zero. *Greg Ross, head of sustainability at Petrofac “I BELIEVE THE CIRCULAR CARBON ECONOMY IS A GREAT OPPORTUNITY FOR THE UAE, AND THE WIDER GCC” Partnership. Petrofac is supporting its clients and partners to develop strategies to reduce their carbon footprint Proactive approach. Greg Ross, head of sustainability at Petrofac “WE NEED AN ACCELERATION IN INVESTMENT IN THE NEW ENERGIES SECTOR AND AN APPROPRIATELY PRICED CARBON TAX”Next >