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Today, we debut our first-ever 2021 MENA VC Impact Investment Report in collaboration with Wa’ed, the entrepreneurship arm of Saudi Aramco. The report aggregates data on investment meant not only bare returns for funders, but most importantly, to create environmental, social, economic, and cultural value. The release of this report serves as a milestone for our VC ecosystems in MENA and across Emerging Venture Markets. For as we record an unprecedented year for VC investment in MENA, with capital deployed nearing the $3Bn mark in 2021 YTD, it could be ample time to explore and rethink the impact of VC investment holistically.
$444M was raised across 403 deals backing MENA-based Impact-driven startups between 2016 and Q3 2021. Even though that volume of capital accounts for only 7% of all VC investments deployed within that time period, the real value is derived from the potential and power of VC funding to shape the betterment of communities. While Energy, HealthTech, and EdTech sectors were the most funded sectors under impact investment, we trace back the most important attribute to VC investment: the exceptional growth potential of backing new innovations.
In this regard, following formidable news of their launch last week, we invite Phaze Ventures, the first-ever VC investment fund Oman. Co-founder and CEO Abdullah Al-Shaksy takes a dive into the vision behind Phaze Ventures, and how its launch serves a grander economic empowerment plan building the blocks for an innovative future in Oman:
“If we are going to diversify and have a positive impact, venture is the most proven model to rapidly test and scale new businesses.”
I think it’s always timely to revisit your origin story as a business and ask yourself if you are still on track for the future you envisioned. Phaze Ventures was set forth at a time when Oman and the GCC had taken a decision to diversify their economic drivers, and my partners and I were eager to be a part of that story. We had returned to Oman in 2015 after studying and working abroad for several years, at a time when the country was emerging from its last oil downcycle. Youth unemployment was on the rise and we started facing signs of our first deficits, as did many of the other Gulf states. In response to the challenges that were emerging Oman commenced the “National Program for Enhancing Economic Diversification”, and MBS was about to announce “Vision 2030” in Saudi.
There was a general mood amongst the next generation that the good times our parents’ generation had enjoyed, with endless growth and opportunities for all, may finally be coming to an end - and the cycle of dependence on our regions greatest treasure was an unsustainable and insatiable addiction we keep failing to break. But we wanted to try and do something about it. We had good heads over our shoulders and a decent network between us within the government, private sector, academia, locally, and globally. Surely by speaking to all of them we could figure out the missing link in our efforts and formulate a plan that somehow we could play a part in executing.
By 2016, we realized that the underlying hindrance to diversification and enabling the private sector was that the whole startup ecosystem required to build new companies did not exist. That’s where we narrowed our focus and decided to be the first private venture capital firm in the country and that’s how the idea of Phaze Ventures came along. If we are to diversify, we realized, venture is the most proven model to rapidly test and scale new businesses.
In a strategic attempt to expand global expertise in the Energy sector, Phaze Ventures invested in US-based Interface Fluidics along with Tech stars and Equinor Energy Ventures. The startup is exploring next-generation fluid monitoring and analysis technologies to optimize the production of oil. Remarkably, the Energy sector in MENA raised 95% of all VC impact investment funds in MENA between 2016 and Q3 2021, raising more than $100M in impact investment.
“Trying to understand where the world is heading is the story of the propagation of information. Venture capital is the story of short-circuiting that.”
Breakthroughs in science, revolutionary business models, the know-how of the future take time to propagate over geographies and materialize into everyday life across the globe.
If trading exists to short circuit short-term trends and information arbitrage, then perhaps on the other end of that spectrum venture capital exists to short-circuit the long-term trends - the megatrends that reveal themselves from the noise. The big trends that produced the likes of Apples, Facebooks, and Amazons of the world that transitioned us into the age of personal computing, web 2.0, eCommerce, or perhaps the Ethereums and SpaceXs that will transition us into the age of web 3.0, space and beyond.
That is the role that VCs play in shaping transitions: to look past the noise and spot these long-term megatrends, and perhaps more importantly find the teams that are best positioned to materialize these exciting futures into our every-day lives. We bring to the table ready pools of risk capital to fund the teams that could potentially build these great businesses, and we provide access to the collective knowledge of our network of founders, advisors, and investors.
It is the consequence of a healthy venture ecosystem that generates opportunities to diversify our economies, accelerate our ESG goals, and hopefully make an outsized return on our capital along the way! As an optimist I believe the world will on the long-term average continue to trend towards a better, cleaner, more inclusive future – then we as investors should make sure we are backing the businesses that can accelerate us towards that future, and be on the winning side of history.
About the Author
Abdullah Al-Shaksy is the Co-founder and Chief Executive Officer at Phaze Ventures, Oman’s first private venture capital firm, founded to fund early-stage disruptive technology companies from around the globe, and accelerate the transformation of the region’s economies through early stage investments and strategic partnerships.
Abdullah is a board member of multiple global technology companies including Voyager, Spotlight Earth, PhazeRo, and is the Chairman of the Board at eMushrif, a board member at Shaksy Group, and a board observer at Interface Fluidics.
Abdullah was formerly a board member of Akeed, and a General Partner of the SparkLabs Energy Accelerator, the first energy focused startup accelerator program in the region, created in partnership with Petroleum Development Oman. In his spare time Abdullah is also a guest speaker, mentor and lecturer at multiple entrepreneurship programs, incubators, and startup accelerators.
About Phaze Ventures
Established in 2018, Phaze Ventures is the first private venture capital firm in the Sultanate of Oman, founded to fund early-stage disruptive technology companies from around the globe, and accelerate the transformation of the region’s economies through early-stage investments and strategic partnerships.
The firm’s existing investments include eMushrif, Carzaty, and Voyager, and is headed by its three co-founders: Abdullah Al-Shaksy, co-founder and CEO, Mohammed Al-Wahaibi, co-founder and partner, and Masoud Al-Rawahi, co-founder and partner. The team is also supported by a diverse group of advisors with leadership experience at global technology firms including Amazon, Siri, and Spotify.
The firm announced the launch and initial close of its $30 million venture capital fund, targeting early-stage startups in MENA, Europe and North America. The fund launches with commitments from the country’s largest investors, including Oman Information and Communications Technology Group (part of the sovereign fund of Oman), Ominvest and several prominent family offices.
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