Shipsy, a leading global SaaS-based logistics management platform provider which utilizes technologies such as blockchain has signed an MOU with Monsha’at, the Small and Medium Enterprises General Authority of the Kingdom of Saudi Arabia, to support Saudi Vision 2030. This development took place at the sideline of Biban 23 Forum.
The MoU highlighted that Shipsy would offer its technology at a significant concession for all customers channeled through Monsha’at. The logistics SaaS provider also earmarked an investment worth USD 10 million over 5 years in the region to drive technology innovation and research and development.
This MoU’s objective will be to develop and support SMEs and entrepreneurship under the laws and regulations in force in the Kingdom of Saudi Arabia and commensurate with the available resources, aiming to drive growth and economic diversification.
“We are honored to partner with Monsha’at and thrilled to be a part of KSA’s Vision 2030. We are committed to drive technology inclusion in the Kingdom’s rapidly growing supply chain and logistics industry. Technologies like AI, automation, and Machine Learning, IoT, Blockchain and data analytics will create numerous employment opportunities and unlock efficiencies that will help logistics stakeholders build sustainable, agile and cost-efficient logistics processes,” said Soham Chokshi, CEO and Co-Founder, Shipsy.
Prior to this announcement, Alea Global Group Investments carried out a session on Blockchain in Trade Finance during their Alea Sessions edition in Riyadh KSA.
In November 2022, Saudi Arabian, Saudi British Bank (SABB) utilized Contour Blockchain platform to enhance trade finance by improving letter of credit and guarantee procedures for enterprises and international businesses. SABB worked with local fintech entity Bwatech.
Saudi’s first NFT marketplace platform, Nuqtah has raised a seed round of millions of dollars from Blockchain platform Polygon and Animoca Brands. As per the release the new funding will scale Nuqtah’s business over the next 12 months.
In 2022, Nuqtah had announced it was planning to raise $5 million in upcoming seed rounds.
Licensed by the Saudi Ministry of Communication and Information technology and the Ministry of Investment, Nuqtah aims to to empower its creators, businesses, and users to unlock the new opportunities that the Web3 space offers to the region. Nuqtah allows individuals and businesses to easily build, deploy and monetize NFT collections without having to navigate complicated blockchain infrastructure.
Yat Siu, the executive chairman and co-founder of Animoca Brands, commented: “Our investment into Nuqtah is another meaningful step in our commitment to build up the Web3 industry in MENA as well as develop our own capabilities in the region. Nuqtah is an important pioneer and we anticipate that it will greatly help to boost Web3 and NFT adoption in the Middle East. We will continue to expand our operational presence and collaborate with local strategic partners looking to adopt Web3.”
In February of this year Nuqtah signed an MOU with Saudi telecom group to tokenize photographs fro STC’s Sarha project.
Nuqtah is helmed by Salwa Radwi, an award-winning photographer, artist, and Web3 and blockchain advocate. In 2021 she founded Nuqtah to serve as the first-of-its-kind blockchain technology provider and developer in the MENA region, making her one of the first female founders and CEOs in Saudi Arabia’s NFT landscape. Salwa is joined by co-founders who previously worked at major companies including Careem and Oracle, and whose extensive industry experience has enabled Nuqtah to become a prominent and respected advocate of Web3 in the Kingdom.
Salwa Radwi, founder and CEO of Nuqtah, noted in the release, “Watching Animoca Brands pioneer and enable the Web3 scene since day one has been so inspirational, and so we take great pride in the trust placed in Nuqtah through this investment. We look forward to working together to unlock the massive potential and opportunities in the Middle East.”
Speaking to LaraontheBlock, Salwa Radwi confirmed that the latest seed investment raises millions of dollars. She states, “ This new round of investment will open new lines of opportunities, not only financially but also through animoca and polygons extravagant network.”
Nuqtah had raised close to a million dollars in its pre-seed round from Shorooq Partners, according to Radwi. At that time Nuqtah planned to build on the thriving NFTs space, and utilize the underlying blockchain technology to spearhead innovation in other verticals such as media and entertainment.
Animoca Brands, the creator of sandbox metaverse and other Web3 projects has been very interested in the MENA region. It announced it would be entering Dubai through its metaverse Dubaiverse, and it also signed an MOU with Saudi government at beginning of 2023.
In 2021 Avanza Innovations was piloting its KYC banking solution in Pakistan, two years later, Pakistan Banks’ Association (PBA), on behalf of all its member banks, signed the project contract for the development and execution of Pakistan’s first, blockchain based, national eKYC banking platform with the Avanza Group.
Avanza Group’s eKYC platform, ‘Consonance’, is being implemented for PBA. The platform will use blockchain technology through which banks will be able to standardize and exchange, with customers’ consent, their details via a decentralized and self-regulated network. This will be a support platform for Pakistan’s banking industry and all participating member banks will be able to perform assessments of their existing, as well as new customers, by utilizing information/ data available with any other bank on ‘Consonance’.
In 2021 Avanza was piloting the EKYC blockchain enabled platform with three big banks. In an interview Waqas Mirza, Founder and CEO of Avanza Innovations notes, “ “We are launching the EKYC Blockchain enabled platform initially for three of the biggest banks in Pakistan under the auspices of Pakistan Banks Association (PBA) and in-line with the guidance of State Bank of Pakistan. The eventual goal is to roll out this National EKYC platform to all banking and financial institutions in Pakistan.”
He had noted at the time that it is always recommended to start with a pilot and limited number of participating entities before scaling.
In the latest announcement Mirza stated, “The Standardization and anomaly detection of Customer’ KYC details is just the first use case in this journey. In the future, the same platform can be enhanced to share Trade Finance related details, digital exchange and verification of banking documents, digital cheque clearing and many more. Avanza is very proud to implement the first building block of this multi-year journey that will greatly benefit the industry as well as end customers.”
Mentioning trade finance, digital cheque clearing is paramount because it is what put Avanza on the map in the UAE as well as Bahrain and other places.
Avanza had rolled out the National EKYC platform for BENEFIT in Bahrain back in 2021. At the time Mirza had stated that GCC region has been our best partner for experimenting and implementing blockchain solutions and now we are replicating these solutions in neighboring countries.
Avanza Group had started its blockchain projects in the UAE and GCC region. Avanza was the technology partner for UAE Trade Connect Project. Blockchain UAE Trade Connect platform, the UAE’s first trade finance platform to combat fraud has 11 UAE banks on its platform and was the UAE’s first commercialized solution to combat fraud in the trade finance space built on advanced technologies, namely blockchain and Artificial Intelligence (AI). UTC is a collaborative project of the banking industry and co-created with e& enterprise.
With the advent of the Invoice Factoring law recently published by the Federal Government of the UAE, the UTC blockchain platform was a key enabler for banks to increase lending to SMEs and allow corporates to borrow against their trade receivables.
In December 2021, the UAE Blockchain AI enabled UAE Trade Connect trade finance had processed 10 Billion AED (2.7 billion USD) worth of invoices during the first eight months of its operation. Etisalat Digital launched UTC trade Finance platform in April of 2021 alongside seven banks within the UAE.
In early 2022, Abu Dhabi Commercial Bank joined UTC platform as did Dubai Islamic Bank. At that time UTC had in total nine banks on its roster. The founding banks included First Abu Dhabi Bank (FAB), RAKBANK, Emirates NBD, Commercial Bank of Dubai, National Bank of Fujairah, Mashreq Bank, ADIB – Abu Dhabi Islamic Bank, and Commercial Bank International.
The experience and reputation Avanza gained from both projects in Bahrain and UAE spurred the growth to other countries and continents.
Avanza Innovations, part of Avanza Group has also worked with multiple other UAE governmental entities on Blockchain projects. Entities include DP World, Dubai Chamber of Commerce, Dubai Customs, RTA, Dubai Police and others.
Waqas Mirza, Founder and CEO of Avanza Innovations in an interview in 2021 mentioned the work Avanza was doing in Saudi Arabia. He discussed working on a Blockchain Invoice verification with a well renowned company. He at the time stated, “We have won a project as one of the subcontractors working on an invoice verification solution built on Hyperledger. The client is utilizing this solution to ensure seamless procurement and payment procedures with its suppliers.”
In conclusion, Avanza Innovations a UAE blockchain solution provider has used UAE’s Blockchain strategy and commitment to innovation to grow well beyond its roots. This is a lesson to many blockchain and crypto entities that are setting up in UAE, the limits are endless.
CargoX, the provider of the fastest-growing electronic trade document platform, and CEBS Worldwide, a global integrator of business solutions and a former TradeLens integrator, launched a partnership to help corporations continue the digitalization of their bills of lading and trade document workflows even those in the MENA region.
Businesses that started using TradeLens for their eB/L have been scrambling to migrate their electronic trade document processing to a new platform since TradeLens unexpectedly announced the end of its service in December 2022.
While TradeLens was able to onboard global carriers — CMA CGM, MSC Mediterranean Shipping Co., Hapag-Lloyd, Ocean Network Express and Zim Integrated Shipping Services — it announced in November 2022 it would shutter due to a lack of a path toward profitability. TradeLens was also piloting projects in Oman and KSA.
Saudi Customs, in partnership with the Ministry of Communications and Information Technology, the General Authority of Ports, and Maersk International Company, one of the founders of Tradelens had announced in 2019 the successful Blockchain pilot and the importance of blockchain technology in the shipping industry.
In addition Oman’s Port of Salalah took the first step and is collaborating with Oman Customs and TradeLens built on IBM Hyperledger Fabric Platform for shipping and logistics industry.
The new partnership provides existing customers of the discontinued TradeLens platform with a proven, reliable and powerful alternative for creating, transferring, and processing electronic bills of lading and trade documents. CEBS and CargoX will provide former TradeLens users with a frictionless transition of their workflows on the TradeLens platform by integrating the platform features through CEBS’s framework interfaces.
CEBS will start migrating current TradeLens customers to their Supply Chain Finance platform and the CargoX Blockchain Document Transfer (BDT) Platform for electronic trade document exchange. This is accomplished by using CEBS’s middleware cloud and on-premise platform to help organizations effortlessly leverage different public blockchains in their enterprise applications, saving time and money.
This way, companies can become future-proof and fully blockchain platform agnostic. Companies can keep their everyday workflows and introduce CargoX’s optimized, tightly integrated blockchain document transfer features into their existing processes.
Satish Swaroop, CEO of CEBS Worldwide said: “We are committed to digitalizing the supply chain network for all trading partners and ensuring all transactions and documents exchanged are secure, traceable, and immutable. We have good partnerships and teams working with the public and private sector to shape the future and usher in a new era of global trade that is both frictionless and compliant.”
Stefan Kukman, CEO of CargoX said: “We are incredibly proud to welcome CEBS as our new partner. They are a true innovator in the market, binding together diverse solutions and platforms to build customer value. The digitalization of trade documentation is in full swing worldwide, and companies need all the support and advice they can get to implement the optimum solutions into their everyday workflows. “We see demand rising daily, and more than 104,000 companies registered on our platform prove that the CargoX Platform is becoming a standard item in the toolboxes of modern supply chain participants.”
CargoX in 2022 announced that Egypt had extended its agreement with Blockchain CargoX to include air cargo in its efforts to accelerate digital transformation of Egypt’s trade flows with the world. At the time the NAFEZA CargoX blockchain document transfer gateway had seamlessly and safely transferred more than 1,100,000 actual trade and finance documents for more than 75,000 customers.
The public-private partnership Misr Technology Services (MTS),80% owned by the Egyptian government, authorized CargoX as its blockchain document transfer gateway service provider for the country’s official NAFEZA single-window trade platform in March 2021.
WEMADE, the South Korean game developer shifting to blockchain NFTs, DeFi and metaverse has signed a Memorandum of Understanding (MOU) with KSA based Nine66, a Savvy Games Group (“Savvy”) company, to drive the development of the gaming industry in Saudi Arabia.
Savvy’s long-term objective is to drive the long-term growth and development of the games and e-sports sectors in Saudi Arabia. The group consists of five independent entities covering areas such as game development, e-sports, investments and more.
KSA based Nine66 is committed to building and investing in the thriving gaming ecosystem in Saudi Arabia. Nine66 is driving growth and success in the region’s gaming industry through a range of initiatives and partnerships, such as publishing, incubator and accelerator programs, training and events, as well as supporting virtual and real-life game development communities.
Saudi Arabia is a strong foothold in the Middle East’s gaming market, with over 80% of its 36 million population identifying as gamers. The partnership between WEMADE and Nine66 will support the local gaming ecosystem through training and educating Saudi game developers.
Additionally, the partnership will explore various programs aimed at knowledge transfer, sponsorship of regional events, and expanding networks in the region to help grow the Saudi gaming industry and create new opportunities for developers and gamers alike.
WEMADE recently launched its new flagship game MIR M Global on January 31, which currently tops the ranks of video games in RPG category in multiple Middle Eastern countries including Saudi Arabia.
Furthermore, in January 2023, WEMADE announced the establishment of a subsidiary in Abu Dhabi in the UAE, another gaming hub and plans to open another branch in MENA region and work with local projects and companies.
The announcement comes at a time when KSA will be hosting for the first time the Web3 Delight Summit in Riyadh KSA on March 6th 2023 at the Riyadh International Convention and Exhibition Center.
The event, which aims to engage, empower, and support a proactive, customised, collaborative, and secure advanced economy, will be attended by over 3,000 people in person and online from more than 40 countries.
KSA born Nuqtah NFT marketplace has signed an MOU (Memorandum of Understanding) with Saudi Telecom group (STC) to tokenize photographs from stc’s Sarha project and mint them in the form of non-fungible assets exclusively on the Nuqtah NFT marketplace.
As per the blog, STC is committed to delivering the best customers experience through its advanced technology and innovative solutions.
Sarha, the world’s first content-generating camel, is set to take its viewers on a journey of discovery. The camel travelled around Saudi Arabia in tandem with the most skilled photographers, capturing stunning images and videos that will be shared with the world.
Sarha’s journey will take its viewers further than ever before with the broadest network and widest coverage. This unique project provided by stc has be used to create amazing experiences for people all over the world.
As such Nuqtah and stc have come together to create a unique collaboration that will bring the world of photography and blockchain technology together. Through this collaboration, Nuqtah will be creating Non-Fungible Tokens (NFTs) from photographs taken by stc.
This Memorandum of Understanding was signed on the main stage at the Leap 2023 Tech Forum in the capital, Riyadh, KSA.
Salwa Radwi, Founder of Nuqtah NFT on LinkedIn stated, “At Nuqtah, we are proud to be the first blockchain and Web3 Company in Saudi Arabia to gain this amount of trust and approval from public and private bodies on a national and international scale.”
Saudi Aramco has signed a memorandum of agreement with Data Gumbo, a US based Blockchain technology company which developed a blockchain as a service platform to streamline smart contracts management for industrial customers. The agreement between Saudi Aramco and Data Gumbo is for Blockchain collaboration over a three year term.
This is not the first time Saudi Aramco has dealt with Data Gumbo. In August 2022, Saudi Aramco’s investment arm Saudi Aramco Energy Ventures made its fourth investment in Data Gumbo series C round where Data Gumbo raised $4million. The round was led by Saudi Aramco Ventures and Equinor, Norway’s energy operator.
As per the Data Gumbo blog post, “ Data Gumbo is proud to announce that on 8 February, 2023 we entered into a memorandum of understanding (MOU) with Saudi Aramco for Blockchain Collaboration. The agreement has a 3 year term. We are honored by the opportunity to deepen our collaboration and look forward to several transformational projects in the coming years.”
The MOU was signed by Mohamed Marzouk, Saudi Arabia Country Manager and Saudi Aramco’s Senior Vice President, Digital and Information Technology Mr. Nabil Al-Nuaim in Riyadh.
As per the agreement the Areas of collaboration will include, accelerating digital transformation within the Oil & Gas Industry, exploring, identifying and co-innovating blockchain use, improving operational efficiency and driving ROIU with Aramco, its customers and suppliers, providing blockchain training and finally identifying potential applications for managed blockchain services
During Saudi’s leading tech event LEAP 2023, being held between February 7th-9th in Riyadh KSA, IR4LAB, a Saudi-based company specialized in disruptive technologies such as Blockchain and Artificial Intelligence., and SGS (Saudi Ground Services), jointly announced the implementation of DocCerts Blockchain management solution for all training related digital documents and ground service equipment licenses issued by SGS at 28 Saudi Arabian airports where SGS provides ground services.
The Blockchain enabled solution will allow SGS to issue over 10,000 digital documents annually including licenses.
Document verification is one of the major challenges internationally. DocCerts is a solution developed to solve these issues by utilizing the power of Blockchain Technology.
Eng. Ayman Alghamdi, Vice President of Human Resources, at SGS, said: “We are very pleased to be announcing this groundbreaking solution at LEAP 2023. This is a historical moment and it’s the first initiative of its kind in the aviation industry. SGS delivers services to over 88 million passengers on 690,000 flights a year. Using DocCerts Blockchain solution at KSA airports we will be able verify documents and licenses easily, securely and efficiently improving customers’ experience. We are proud to be working towards achieving Saudi Arabia’s vision 2030 through these efforts.”
Airport ground services support smooth aircraft operations. Functions carried out through these services include delivery of passenger services, baggage handling, ramping, traffic control, load control and fleet solutions. According to Expert Market Research, global Airport Ground Market Size will grow at a CAGR of 10.40% in the Forecast Period of 2023-2028
Majd Jamal Alafifi, Co-founder & CEO of IR4LAB stated: “IR4LAB was Saudi Aramco’s first blockchain technology investment in the Kingdom given that we are committed to increasing the tech adoption in the country as well as building local capabilities. The agreement today with SGS is a clear example of the fruitful collaboration between local blockchain tech startups and leading local companies in the adoption of new technologies such as blockchain. We look forward to more agreements with other players in KSA as part of the aim to achieve Saudi’s 2030 vision and lead the way locally and globally.”
Mohamed EL KANDRI, Co-Founder & CTO IR4LAB added: “This is an important milestone for the aviation industry not only in KSA but worldwide. Our customizable solution DocCerts allows any organization to create documents for their recipients using digital signatures that are then issued on the blockchain. This enables all stakeholders to verify them securely in real-time making the ground service offering in KSA airports safer, quicker, and more transparent.”
Alea Global Group will be holding their editionof Alea Sessions in Riyadh KSA. The one day gathering under the theme ‘The New Opportunities in Investment in the New Saudi Arabia’ will gather 100 of the GCC and MENA region’s top family offices. The event will include a session on Blockchain in Trade Finance.
Alea Global Group is a conglomerate single family business formed in 1998 in the State of Kuwait owned by a member of Al Duaij family. The one day event will discuss private debts and CLOs, trade finance, mezzanine debt, open banking, micro and macro banking environments, and Saudi Arabia’s unicorns.
The Alea Sessions is a series of irregular but responsive events held by Alea Group Group which are held when there is a need to address important topics that need to be addressed and which our followers would like to talk about. These events are usually shorter than their Family Office Summits, with a more focused programme. They may occur anywhere in the world, and also online.
Some of the highlighted speakers will include Essam Albakr Founder & CEO, Ejada Capital, Kingdom of Saudi Arabia, Mark Mobius, Founding Partner, Mobius Capital Partners, Mirna Sleiman Founder & CEO, Fintech Galaxy, UAE, Omar AlShabaan Co-Founder & CEO, The Space, Kingdom of Saudi Arabia, Talal AlBakr Entrepreneur, CEO of SCCC, co-founded Embark Ventures, Kingdom of Saudi Arabia, Abdulaziz M. Alfakhri Board Director, CFO, CIO, Investments & Finance Executive, Angel Investor, Advisor, Mentor & Public Speaker, Kingdom of Saudi Arabia, Ajay Sunkara President & Co-Founder, Nala Robotics, USA , Ashar Nazim CEO, Aion Digital, Kingdom of Bahrain as well as Rabih I. Khoury Managing Partner & Chief Exit Officer Middle East Venture Partners (MEVP), Kingdom of Saudi Arabia and many others.
One of the sessions at the event will discuss the topic of how blockchain will shape trade finance. It will discuss how to overcome obstacles and find a competitive advantage in trade finance. Panelists will include Zineb Tamtaoui, Senior Executive Officer, Head Of Middle East Region, Chez BMCE BANK International Plc, and UAE Kevin Ramsamy, CFO, Barak Fund Management, Mauritius.
This is an interesting topic to be discussed at a family office event but not surprising given the latest stance taken by Saudi Arabian Finance Minister, Mohamed Al Jadaan in a TV interview with Bloomberg during the WEF 2023.
As per the interview Saudi Arabia is open to discussions about trade in currencies other than the US dollar. He states, “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal.”
“I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world,” Al-Jadaan said.
Blockchain could just be one of the ways KSA is looking to improve trade around the world.
In November 2022, Saudi Arabian, Saudi British Bank (SABB) utilized the Contour Blockchain platform to enhance trade finance by improving letter of credit and guarantee procedures for enterprises and international businesses. SABB worked with local fintech entity Bwatech.
In addition Saudi Arabian Taajeer Group, the exclusive agent for MG cars in the KSA utilized the Blockchain enabled Contour platform in its importing of cars from China. HSBC, Chinese SAIC Motor, and KSA Taajeer group executed a successful blockchain enabled trade finance transaction on the Contour platform.
Could this be the culmination of Saudi government strategy, and some blockchain success stories. Jut follow the money and all will be revealed.
In a recent survey entitled “MENA Investor Survey 2022-2023 for crypto Blockchain sector” carried out by laraontheblock with 83 MENA venture capitalists, fund managers, and family offices, 50% of those surveyed stated they will be allocating more funds to blockchain and crypto projects and entities in 2023. 19% of those surveyed stated in 2022 they had invested more than 50% of allocated capital and funds into crypto and Blockchain projects.
The findings of the “MENA Investor Survey 2022-2023 for crypto Blockchain sector” sheds light on the different areas of interest for MENA investors which will give startups and entities a better view on whom and where capital will be heading by investors in the MENA region.
This comes as cryptocurrency adoption has skyrocketed in the Middle East and North Africa (MENA) region. According to a survey by blockchain analytics platform Chainalysis, MENA countries have the fastest-growing cryptocurrency industry in the world, accounting for 9.2% of global digital currency transactions from July 2021 to June 2022.
Vast Majority of MENA VCs invested in crypto and Blockchain in 2022
75% of survey respondents confirmed that they invested in crypto and blockchain entities in 2022, while only 25% stated they hadn’t. The MENA region has become the center for crypto trading, investing and regulation. The UAE led crypto regulation in 2022 and was the first country in the region to launch a blockchain strategy back in 2017.
The stance taken by MENA investors in the survey is in line with global figures. In 2022, despite the slowdown in crypto VC funding, it exceeded the figure for 2021. Cointelegraph Research’s VC Database showed that a total of $36.1 billion was raised in 2022. This is in contrast to the $30.3 billion worth of funding in 2021.
Crypto projects globally attracted $19.9 billion in venture capital (VC) investments in the first nine months of 2022, 41% higher than a year ago, according to Pitchbook data.
Crypto and Blockchain entities are the Future
54% of respondents replied that they invested in crypto and Blockchain entities because it is the future, while 42% stated it was because these technologies solve real business problems. Only 18% believed that it was because while risky the return on investment was high. ( note that more than one response for some respondents
The MENA region witnessed sizable investments in crypto and Blockchain entities in 2022. For example crypto exchange RAIN received $110 million in investments and included investors from MENA such as MEVP. BitOasis also raised $30 million with UAE based Wamda Capital and others.
Significant developments in the UAE such as the launch of Dubai’s Virtual Assets Regulatory Authority (VARA), and the announcement of the Dubai metaverse strategy, which aims to attract more than 1,000 blockchain and metaverse companies as well as support more than 40,000 virtual jobs by 2030 has also played a role in enticing investors towards blockchain, crypto and metaverse as did the launch of Crypto Oasis ecosystem and the DMCC crypto center bringing in 1400 crypto and Blockchain entities to the
19% of surveyed spent over 50% of their capital on Blockchain and crypto entities
Interestingly when asked what percentage of capital or funds available in 2022 was invested in crypto and blockchain, a whopping 19 percent stated that they had invested more than 50 percent of funds into crypto and Blockchain entities. While the majority 33% invested between 5-15% of their capital into crypto and blockchain entities.
27% invested between 1-5 percent of their capital into crypto and Blockchain, while 21% invested less than 1%.
While the percentages maybe small compared to other areas, Nickel Digital Asset Management noted that UAE institutional investors, family offices, and wealth managers plan to increase their exposure to crypto dramatically by 2023. And while sovereign funds do not yet see digital assets as investable with just 7% of global sovereign investors have any exposure to digital assets through investments in blockchain companies, this is changing.
In May 2022, J.P. Morgan’s global investment strategy outlook elevated digital assets as the preferred alternative asset class alongside hedge funds for 2022. For the first time in history digital assets displaced other alternative strategies. In the report it is noted that digital assets are expected to offer the greatest potential for generating alpha and hedge funds expect as much as 10 percent of their strategy to include crypto.
A PWC Global Crypto Hedge Fund report in August 2022, found that more than a third of traditional hedge funds now invest in digital assets, this was double the figure of 2021
Global crypto leader at PWC left his role to set up a $75 million digital assets fund Nine Blocks Capital in Dubai UAE. Henri Arsalanian, founder noted that it was Dubai’s crypto openness that influenced his decision.
Majority of MENA Investors invested in Blockchain infrastructure
MENA investors surveyed were asked where they allocated funds in 2022. 64% of respondents stated that capital was invested in Blockchain infrastructure projects. Following Blockchain infrastructure was DeFi. 38% of respondents stated they allocated funds to DeFi projects. Equally 33-36% invested in metaverse and crypto assets.
In addition 22% replied they invested in Non-Fungible tokens or NFT projects, while 17-18% of respondents stated investments went into e-gaming, tokenization projects, crypto mining and blockchain crypto payments.
Only 8% stated they invested in decentralized messaging and social media platforms.
The findings of the survey fall much in line with Cointelegraph’ s recent blockchain funding VC report which found that blockchain Infrastructure projects took half the pot of investments in November 2022. While the Web3 sector saw the most deals closed. The global blockchain infrastructure sector secured $483.9 million in venture capital in 2022.
According to Galaxy Ventures, Crypto and Blockchain sector saw $5.5 billion of venture capital invested in Q3 2022 through 518 deals. Despite the QoQ (quarter on quarter) decrease, the $5.5 billion invested in Q3 is $2 billion greater than the 7-year average of $3.1 billion and more than $2 billion higher than the 2020 peak.
MENA investors will invest more in 2023
51% of those surveyed stated they would allocate more funds to blockchain and crypto entities in 2023. Only 15% replied they would not. In addition 33% were unsure. This means that potentially 84% of those surveyed could be investing more in blockchain and crypto in 2023.
Already investment companies such as TradeDog Group, the parent company of TD VC, have launched new funds. TradeDg Group launched their $100 Million Web3 blockchain special situation fund. The fund will re-structure and invest in projects with good products and businesses but struggling token markets.
Even UAE Cypher Capital VC announced in December 2022 the launch of a new $200 million fund which will focus on infrastructure and middleware investments in Web3. At the time they had invested in Rekt Studios and Fenix Games, while UAE Shorooq Partners also announced in March 2022 that they would be investing $150 million in Web3 startups. Many other investors across the MENA region have been following suite including Mubadala and G42 both based out of UAE.
Global players such as Goldman Sachs plans to spend tens of millions of dollars to buy or invest in crypto companies after the collapse of the FTX exchange hit valuations and dampened investor interest. Goldman has invested in 11 digital asset companies that provide services such as compliance, cryptocurrency data and blockchain management.
MENA investors view Blockchain infrastructure as biggest growth sector in 2023
According to 29% of survey respondents, Blockchain infrastructure projects will witness the biggest growth in 2023. Data gathered by BuyShares.co.nz, found that the global spending on blockchain solutions is expected to surge by 235% and reach $14.4bn by 2023.
Following, 21% view metaverse projects as high growth sector technology. This is in line with findings from Grand View Research, which states the global metaverse market is forecast to grow at a compound annual growth rate (CAGR) of 39.4% from 2022 to 2030.
Meanwhile 18% of those surveyed think DeFi will witness strong growth. DeFi has been the largest market cap activity within Web3, with a peak total value locked (TVL) of over $175 billion in 2021 shrinking to $39 billion in 2022. Yet Digital asset research firm Reflexivity Research in its recently published 2022 Annual Year in Review / Forward Outlook 2023 believes that given the blow to trust in CEXs, investors will be drawn to decentralized alternatives. The report believes DeFi TVL could make its way back to $75 billion or $100 billion.
12% of those surveyed view blockchain and crypto payments as one of the growth sectors for 2023. Cross-border payments and settlements are considered the most prominent blockchain use case. According to the IDC Worldwide Blockchain Spending Guide, Blockchain enabled cross border payments accounted for 15.9% of the $4.67-billion blockchain market in 2021. Juniper Research estimates that B2B cross-border payments on blockchain will account for 11% of the total B2B international payments by 2024.
When it comes to investment in tokenization projects 8% of those surveyed believe that tokenization sector will be a growth sector in 2023. 5% of those surveyed believe NFT sector will grow in 2023, only 3% of those surveyed believe crypto mining will be a growth sector.
Conclusion
In conclusion from the responses of 83 VCs, investment funds, across the MENA region that included names such as Oman Investment Authority, Equinox, Synaptech Capital, CypherCapital, Helion Ventures, Carter Capital, AlIImtiaz Investment Group, True Global Ventures, Roshan Investments, Crypto Oasis, Ghaf Capital Investments, Vault Investments, and many more, the reflection is a positive outlook when it comes to crypto and Blockchain and a growing interest in investing in projects. So while 2022 might have been one of the toughest years on crypto and Blockchain, it has not killed the appetite of investors in MENA!
