His Highness Prince Dr. Turki bin Saud bin Mohammed Al Saud, President of King Abdulaziz City for Science and Technology (KACST), Chairman of Taqnia Company inaugurated today Riyadh Taqnia Venture Capital Fund with the participation of the Minister of Commerce and Industry in presence of selection of high-ranking officials and concerned figures in the Conference Hall at the KACST’s headquarters.
Prince Dr. Turki \underlined that the establishment of this Fund is one of the essential tools to achieve the Kingdom’s transformation into the knowledge economy, which is adopted by the government of the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud, to turn the Saudi economy into a knowledge-based one through securing robust organizational and technological infrastructures as well as the efficient resources to provide support and encouragement to small and medium-sized enterprises (SME) so as to invest in high value-added technological areas.
The Prince stressed that launching the Fund \of "Riyadh Taqnia" with the capital of 450 million Saudi riyals, is a culmination of exerted hard work and continuous efforts that spanned over more than three years which finally resulted in establishing strategic partnership among Taqnia Company, Riyad Capital, Public Investment Fund, Saudi Bank for Credit and Savings, Public Pension Agency, and Human Resources Development Fund for founding this Fund; wishing for this newly established Fund to participate, by God’s willing, in bridging the gap in financing emerging technological projects, inasmuch as the resources of this Fund \will be allocated to invest venture capital in SME through technology transfer, building-up specialized capacity in areas of information and communications technology, energy technology and advanced materials technology.
KACST President highlighted that KACST spared no efforts to develop the appropriate mechanisms to transform scientific research outputs into marketable products in cooperation and coordination with other relevant authorities and stakeholders; adding that among these mechanisms is linking supporting scientific research projects with economic feasibility and existing business partner capable of converting the product into to a marketable commodity which form the distinguished desirable achievement that has been fully accomplished, thanks to God in the first place , and then the sincere collaboration among stakeholders including both the government and private sector.
Prince Dr. Turki concluded his speech, expressing thankfulness and gratitude to His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Deputy Crown Prince, Second Deputy Prime Minister, Minister of Defense, Chairman of the Council for Economic and Development Affairs and Chairman of the Public Investment Fund, for his support to the initiatives of the transition to the knowledge economy and especially initiatives associated with Venture Capital
Mr. Abdullah Ibrahim Al-Iyadi, Taqnia Executive Officer, for his part, pointed out that launching Riyadh Taqnia Venture Capital Fund and the tangible effective support of the concerned governmental authorities through collaborating in making this ambitious Fund a real success on the ground, affirm the keen interest of the government of the Custodian of the Two Holy Mosques in supporting the SME sector out of its full understanding of its vital importance.
Al-Iyadi stressed that founding this Fund coincided with the Cabinet’s decision approving the establishment of the General Authority for SME, which aims to organize, support, develop and foster SME sector in accordance with the best international practices to raise the productivity of those enterprises, increase their contribution to the GDP of the Kingdom, authenticate, as well, the government’s seriousness to make full use of what this sector produces to diversify sources of income in addition to its positive contribution to employment and generating job opportunities for the national workforce and technology localization.
Taqnia Executive Officer, highlighted that SMEs are the main engine for the economical growth of most world countries based on their vast majority contribution to the national income of these countries; stressing that the World Bank’s estimates SMEs’ contribution by about 65% of the total global income as they also have an effective role in terms of employment since they contribute by 60 to 70% of the employment opportunities around the world, which in turn reduces the level of unemployment and raises the efficiency and productivity of the national labor force.
Al-Iyadi indicated that Riyadh Taqnia Fund is one of the beneficiaries of "Masharakah" (Participation) program which has been launched by Takamul ((Integration) Company and Human Resources Development Fund which aims to support SME sector through guaranteeing loans provided by banks to investment funds as an additional support from the government’s institutions to stimulate and increase funding resources for this sector.
Ali Abdulrahman Al-Gwaiz, CEO of Riyad Caputal, asserted that the Kingdom is considered one of the most polarizing investment environments for private equity funds where it gained 26th position among 118 countries around the world in this field and has maintained this advanced position by sustaining high economic activity.
Al; Gwaiz stressed that the scarcity of banks’ support directed to SME, and family corporates is considered one of the reasons that encourage the growth of private equity funds; noting that banks, with lower oil prices went to impose more stringent conditions on lending which made private equity funds the available alternative for lending.
The CEO of Riyad Capital highlighted that launching Riyadh Taqnia Venture Capital Fund will attract foreign equity which would open a wider market for the local stock market in the varied areas of investment and investors services while taking into account the local market's privacy to build-up relationships and business development; stressing that the government initiatives such as "Mosharakah" and "Takamul" and the support provided by the human Resources Development Fund, will contribute to generating opportunities to create venture capital funds.
Then, Yousef Hamad AlYousefy, shed the light on Riyadh Taqnia Venture Capital Fund stating that it focuses on the promising technology sector while contributing to building environmental system for private property and venture capital; stressing that the Fund is the first organization of its kind to accelerate the Kingdom’s transformation into the knowledge economy.
AlYousefy elaborated that the Fund which is managed by a team of experienced experts in various aspects of investment will hold several partnerships with leading companied in areas of technology, industry and asset management for the construction of solid base for entrepreneurship environment as it will also provide many investment opportunities in the Kingdom.
AlYousefy reviewed the target stages of Riyadh Taqnia Fund underlining the financial returns which form the main criteria used for selecting investment opportunities available in fields of technology; revealing meanwhile areas that the Fund will invest in as a result of the growth of domestic demand on information and communication technology, as well as benefiting from the leadership and strategic position of the Kingdom in areas of energy and petrochemicals.