Other BriefingsSaudi Arabia’s Sovereign Wealth Fund Injects New Capital Into China’s Middle East Development
Saudi Arabia targets Chinese SME tech investors with a US$1 billion investment fund
Saudi Arabia’s Public Investment Fund (PIF), part of its Sovereign Wealth Fund, has injected fresh capital into eWTP Arabia Capital (eWTPA), a Riyadh-based venture firm focused on Chinese business expansion in the Middle East.
The unit, Jada Fund of Funds Company, has taken part in the second fundraising for eWTPA, with the announcement made last Friday (December 8) at the FII Priority conference in Hong Kong, presented by the Future Investment Initiative (FII) Institute.
eWTPA, an investment arm of eWTP (Electronic World Trade Platform) launched in 2019 with the backing of PIF and Alibaba, aims to raise US$1 billion in capital commitments for its second fund. The funding will mainly go to Chinese small and medium-sized enterprises (SMEs) that have technology, products and business models that are proven in Asia and can be brought to the Middle East and North Africa region.
“Jada’s investments in our Fund II will further strengthen our capabilities in Saudi Arabia, thereby paving the way for the next wave of international technology companies to enter the Saudi market,” Jerry Li, eWTPA’s founder and managing partner, said when announcing the package.
“The fund will contribute to the economic transformation under way in the kingdom across key growth sectors such as digital infrastructure, cloud-based services, logistics and industrial technologies.”
The agreement was signed in Riyadh by Li and Bandr Alhomaly, CEO of Jada.
Bandr Alhomaly, CEO of Jada Fund of Funds (left), and Jerry Li, eWTPA founder and managing partner sign the investment agreement in Riyadh, Saudi Arabia on December 7, 2023.
eWTPA has invested in 18 companies through its initial US$400 million Fund, with most of these already established themselves successfully in the region. These include Saudi Cloud Computing Company, a major cloud services provider backed by Alibaba Group Holdings; J&T Express, the fastest growing logistics provider in the country; and Valuable Financial Group, the first international Fintech company licensed to conduct dealing and custody and advisory activities in Saudi Arabia.
The latest announcement comes amid rapidly strengthening economic ties between China and the Middle East. More than 1,000 policymakers, business leaders and investors have gathered in Hong Kong last week to attend the FII Priority conference.
A flurry of Chinese companies is now rushing to tap the Middle East market amid rising geopolitical tensions with the West and an economic slowdown in China. Countries in the Middle East, meanwhile, are seeking to develop tech-driven start-up ecosystems and reduce reliance on fossil fuels as a growth driver.
“We will continue to be a catalyst for growth in the local private equity and venture capital ecosystem, with the aim of promoting innovation and job creation in the kingdom, including by attracting [foreign direct investment] and supporting knowledge and technology transfer,” Alhomaly said.
Jada, established by the PIF with investment capital of around US$1 billion, is seen as a key component of Saudi Arabia’s 2030 mission of developing its private equity and venture capital ecosystem. Jada has invested in 36 funds, with US$800 million committed, in more than 500 SMEs in Saudi Arabia.
Dezan Shira & Associates has 13 offices in China in addition to Dubai. We assist foreign investors into these markets and have written extensively about the developing China-Middle East ties, with two recent reports available here:
BRICS & MENA: China’s Growing Influence in the Middle East -
China’s 2024 FDI Trends With A Special Focus on the Middle East
The Middle East Foreign Investment Trends with Focus on the UAE
