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.

The Business Year Special Report - - Interview -

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.”

An­waar AlMah­meed

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