Investing for THE FUTURE
Despite the global economic woes brought on by the pandemic, Republic ha sseen increased interest from investors looking toward the future.
What has been the impact of COVID-19 on funding start-ups in Kuwait and the region?
There is growing interest in all sorts of specific deals, whether they are early stage, growth, or pre-IPO. This upward trend could be due to people having more time to focus and look into these deals, as well as the fact that now, relative to the current state of public markets, private investing seems less risky than it did before. The appetite for investment in Kuwait and in the region is picking up and focusing on certain areas. In general, people are restructuring their portfolios, diversifying their assets, and trying new things. We have been given a great opportunity to do this, given the extra time we have had to better analyze options. Younger people are increasingly getting involved because they have been out of work, giving them more time and less distractions to consider the options. In addition to that, they want to be better prepared for this type of situation in the future.
Which areas are people focusing on when restructuring their investments?
Generally, people are looking more into earlier-stage deals because they believe these companies are being built from the ground up for the “new normal.” In terms of industries they are looking at, it is an especially good time for fintech. Investment in fintech had previously slowed down but is now picking up again. People are looking into software enterprise solutions since the shift to digital has been greatly accelerated; biotech, and edtech are also getting more attention. All those technologies that were losing steam just before the pandemic are now picking up again. I still see interest in stock markets, though it varies from investor to investor and market to market. There is a great deal of uncertainty, but uncertainty is something we are used to in VC private investing. For us, it is not something new that we have had to adjust to; rather, we are re-evaluating this new environment to shift interest to the right industries and ideas.
Regarding the government’s move to support start-ups and SMEs, what is your assessment of its response, and what more can it do to support start-ups, especially in the tech sector?
SMEs are a priority for the government, and the government realizes how important it is to save this segment of the economy. We should continue focusing on the industries that are good for Kuwait, thinking bigger picture and more long-term. It is not about saving as many SMEs as we can, but about saving the right SMEs that will lead us in the right direction. And I see the intention to do just that. One major area where we need to ramp up efforts and guarantee support is in renewable energy. Oil will not last forever. The golden days are past us, and we need to diversify our energy exports and revenue streams. We need to get our act together and start promoting the many other industries in which we can excel. Technology will be the basis of everything, and we need to foster the knowledge and talent that will support growth in that area.
“There is a great deal of uncertainty, but
to in VC private investing.”
Touching on blockchain briefly, how is the development of blockchain helping tech startups, and has Kuwait made any progress in this regard?
Blockchain is an inevitable component of many solutions for the future. Compared to when we last spoke in 2019, when there was still a great deal of resistance and negative sentiment surrounding blockchain, awareness around its potential for good is getting stronger, more widespread, and more accurate. Most of the governments in the region, including Kuwait, are looking into it and seeing how they could apply it to their systems; COVID-19 will only amplify this. We should be taking blockchain seriously and see how we can leverage it, especially considering our fragile economic situation.
Could you elaborate on the challenges and opportunities presented to Deliveroo as a result of COVID-19?
The challenges are twofold, coming from both a regulatory and health perspective. Knowing that decisions led by the Ministry of Health around the lockdown are being taken because it is in the best interest of the country has been challenging, one we have had to adapt to. The next challenge is more internal: reacting operationally to the virus, making sure, as ever, we are being safe when it comes to our riders, for example, by conducting temperature checks, making sure we provide them with protective equipment, and so on. From a product side, it is all about safety: the main initiative around this globally has been our contact-free delivery, which allows customers to select contact-free delivery. We have also been working closely with restaurants so we share information with them about how to remain safe and operate. This means what they need to do to make sure they minimize risks and protect both their staff and our riders. In terms of opportunities, this moment has served to really demonstrate why we are an important function and service to every country we operate in. We consider ourselves an essential service at this period of time, as we deliver food to people who are at risk and those who do not want to go outside or visit a grocery store, and so on.
Are there any lessons to be learned from this period, and how has the current pandemic impacted demand for your product?
There have been many lessons reinforced around how we deal with our partners and remain transparent, as well as about how much our customers appreciate our consistent openness and honesty during uncertain times. There is demand, and we have seen a great deal of creativity from the restaurant side to ensure we can service the demand in different ways. From the traditional way of delivering meals that are ready to eat, to delivering do-ityourself boxes where customers can order earlier and do a little basic cooking to prep the meal later, we have seen a great deal of adaptation and innovation. There is demand for us because people want to feel safe ordering food through delivery.
How has the impact of increased digitalization validated Deliveroo’s strategy?
We will continue to deliver people’s favorite food to their doorsteps. That will be our strategy, when we shift away from the things that we had to adjust to for this period. Our strategy in the interim is definitely about how we help restaurants as much as possible. In Kuwait in particular, penetration of delivery apps is fairly deep compared to many other markets.
As countries across Europe and Asia are looking at life post-lockdown, what government response are you seeking in terms of how Kuwait will reopen?
In Kuwait, the government has done a great job maintaining supply chains of food to ensure there are enough supplies of the essentials that customers need. We want to be able to work with the government, continue to provide our service to the people of Kuwait, and play a part in keeping the city healthy and moving through this period. Data is extremely important to us. Getting the right information so we can adapt our business to those decisions led by health concerns and safety is essential, so we have enough time to react and make the necessary changes to protect the public. I have been pushing for increasing the scope of delivery and allowing more delivery companies to operate because I firmly believe that delivery reduces the risk of the virus spreading. It will avoid congregation and allow people to comfortably stay at home. I am very much a proponent of more delivery—not less—going forward.
“In terms of opportunities, this moment has served to really demonstrate
to every country we operate in.”