The prince of pur­pose

With canny in­vest­ments in Sil­i­con Val­ley firms, Saudi Ara­bia’s HRH Prince Khaled Bin Al­waleed Bin Talal is help­ing the planet, bring­ing sus­tain­abil­ity to the Mid­dle East, and craft­ing his own legacy

Arabian Business English - - CONTENTS - BY NEIL HALLIGAN

Prince Khaled Bin Al­waleed Bin Talal is help­ing the planet and bring­ing sus­tain­abil­ity to the Mid­dle East

PRINCE KHALED BIN Al­waleed Bin Talal turned 40 this year, but the man who’s steadily mak­ing a name for him­self as the Mid­dle East’s most prom­i­nent im­pact in­vestor didn’t take too much time out to cel­e­brate.

“I was asleep at 10.30pm,” he laughs, as he in­vites Ara­bian Busi­ness to take a seat in his cor­ner of­fice with out­stand­ing views of Dubai Creek.

The four-decade mark is a mile­stone in any­one’s life but over the course of an hour-long chat with the prince it’s clear that he also sees this as a time of tremen­dous op­por­tu­nity. Our con­ver­sa­tion veers from Sil­i­con Val­ley to Pe­tra, and from the Mid­dle East’s start-up ecosys­tem to the prospects for Saudi Ara­bia.

Prince Khaled’s in­ter­ests can ef­fec­tively be split into two dis­tinct ar­eas. There’s KBW In­vest­ments, the Dubai­head­quar­tered hold­ing com­pany that counts Rai­mondi Cranes and other con­struc­tion-re­lated en­ti­ties in its port­fo­lio. Arada, the de­vel­oper that has been mak­ing head­lines across the Gulf for its eye-catch­ing projects in Shar­jah, falls into this cat­e­gory.

But it’s the sec­ond port­fo­lio, KBW Ven­tures that is also com­ing more to the fore, thanks to a se­ries of in­vest­ments into com­pa­nies that are gain­ing trac­tion in a num­ber of dif­fer­ent sec­tors around the planet. “We’ve seen re­ally, re­ally good re­turns,” says Prince Khaled, of KBW Ven­tures, which has now grown to a team of seven ex­ec­u­tives. “Granted this doesn’t hap­pen all the time, but we got about a five-and-a-half or six times re­turn on one of the com­pa­nies we in­vested in, which is de­cent for the ven­ture world. But we’re in the early stages right now, and we’re just plant­ing the seeds of where the com­pany will be in the fu­ture.”

At first glance, there ap­pears to be lit­tle rhyme or rea­son to the be­wil­der­ing ar­ray of firms within the KBW Ven­tures port­fo­lio. There’s Gel­tor, a Cal­i­for­nia-based start-up that makes plant-based col­la­gen. Pro­lacta, a life sciences com­pany that is de­vel­op­ing hu­man breast milk for­mula for pre­ma­ture ba­bies, is al­ready present in “20 per­cent of the hos­pi­tals in the US now,” Prince Khaled points out.

Then there’s Zi­pline, a drone de­liv­ery ser­vice that is cur­rently fly­ing med­i­cal sup­plies to ru­ral parts of Rwanda.

Throw in cryp­tocur­rency out­fits, a lengthy list of plant-based and lab­grown food man­u­fac­tur­ers, LED and elec­tric ve­hi­cle projects in Jor­dan and a fast-grow­ing part­ner­ship with Na­tional Geo­graphic’s Ocean Odyssey, and it seems tough to draw the threads of this di­verse in­vest­ment strat­egy to­gether.

For Prince Khaled, how­ever, the strat­egy is clear. “One of our cri­te­ria is you have to be prof­itable, you have to have an ac­tual prod­uct that peo­ple can get be­hind,” he says. “I usu­ally don’t in­vest in seed, I in­vest in Se­ries A [rounds], B, maybe C and D is a lit­tle late.”

In ad­di­tion, each in­vest­ment is in a com­pany that KBW Ven­tures be­lieves has the ca­pac­ity to im­pact the planet pos­i­tively in the fu­ture, while Prince Khaled also says that bring­ing the very best that Sil­i­con Val­ley has to of­fer to the Mid­dle East is also a prime con­sid­er­a­tion.

“Right now, with ev­ery com­pany that I’ve worked with, we’ve set out plans for them to come into the re­gion,” he says. “Why? Not be­cause of how promis­ing the re­gion is, but I be­lieve the re­gion can ben­e­fit from amaz­ing com­pa­nies, amaz­ing tech­nol­ogy, amaz­ing thinkers and driven en­trepreneurs. Our econ­omy and our peo­ple need new ideas and fresh blood. Sure, we’re get­ting some ideas or­gan­i­cally from the re­gion, but to get some in­flu­ence in­ter­na­tion­ally is some­thing I’m a very big pro­po­nent of.

“By de­fault, a lot of these com­pa­nies are go­ing to want to ex­pand in the US first – that’s nat­u­ral. They’re also nat­u­rally go­ing to want to go into Europe. The reg­u­la­tions there are pretty tough, so you have to jump through a lot of hoops, and then maybe Asia. I’m here as an in­vestor to ed­u­cate these com­pa­nies, these CEOs. I ex­plain to them what the Mid­dle East has to of­fer, the pur­chas­ing power here. So we open the door for them and re­ally ed­u­cate them about the fact that this is a mar­ket they need to fo­cus on.”

The “Ve­gan Prince”

Bring­ing a Sil­i­con Val­ley mind­set to the Mid­dle East is no easy task, but Prince Khaled seems de­ter­mined to ac­com­plish the task step by step. A clear area of fo­cus is the fu­ture of food, which is per­haps no sur­prise given his well-known agenda with re­gard to ve­g­an­ism, an­i­mal rights

and the ef­fect the live­stock in­dus­try has on the en­vi­ron­ment.

Among the in­vest­ments and part­ner­ships that KBW Ven­tures is linked to is Be­yond Meat, a Los An­ge­les-head­quar­tered plant-based food man­u­fac­turer whose ‘Be­yond Burger’ re­cently be­came avail­able in the Gulf. Just, an­other Cal­i­for­nian pro­ducer, makes plant-based may­on­naise and a ve­gan egg al­ter­na­tive that has al­ready been picked up by a num­ber of Amer­ica’s big­gest re­tail­ers. Mem­phis Meats, based in San Fran­cisco, is de­vel­op­ing lab-grown (or ‘clean’) meat and has also seen in­ter­est not only from the likes of Tyson Foods and Cargill from the con­ven­tional meat in­dus­try but also from Bill Gates and Richard Bran­son as well.

Not only that, but Prince Khaled has also teamed up with Plant Power Fast Food, a San Diego out­fit out that is pre­sent­ing it­self as the ve­gan al­ter­na­tive to McDon­ald’s, and plans to open an out­let in Dubai by the be­gin­ning of 2020.

“I’m in talks with a com­pany right now that will im­port all these prod­ucts to the re­gion on a whole­sale ba­sis,” Prince Khaled says. “For me, this is some­thing that I need to do, be­cause I need to ed­u­cate peo­ple that other al­ter­na­tives are out there. And they can’t just be avail­able in just one or two small chains – they need to be avail­able in Car­refour, in Spin­neys and in LuLu, so peo­ple can see they are read­ily avail­able.

“Take Just Egg for ex­am­ple – it’s new to the mar­ket and they can’t make enough of it as it’s just fly­ing off the shelves in the US. We’re try­ing to get an al­lo­ca­tion for that here in the Mid­dle East. Be­yond Meat is ab­so­lutely killing it in the US – it’s clear they have a mar­ket they need to ful­fil there and ex­pand­ing in­ter­na­tion­ally isn’t nec­es­sar­ily on their radar. But they do have a sup­plier in Europe that we’re work­ing with so we can get sup­plies here in the Mid­dle East.”

In ad­di­tion, KBW Ven­tures has also tied up with US celebrity chef Matthew Ken­ney to cre­ate Fo­lia, a plant-based menu that was launched ear­lier this year at the Four Sea­sons Ho­tel Los An­ge­les at Bev­erly Hills, while Prince Khaled’s own Plant Café is al­ready open in Bahrain. While a fur­ther 10 Plant Cafes had been ear­marked, that num­ber has grown con­sid­er­ably since then.

“The 10 restau­rants that I’m think­ing of open­ing right now have grown to about 25 or 30,” the prince says. “How’s that go­ing to work? KBW Ven­tures is al­ready in talks with Four Sea­sons so we can have our brand in their prop­er­ties in the Mid­dle East – that au­to­mat­i­cally opens up six or seven lo­ca­tions in the re­gion. And it’s an in­di­rect way of me get­ting these [plant-based, clean] prod­ucts into restau­rants.”

In­vest­ing with a pur­pose

Else­where in the KBW Ven­tures port­fo­lio lies Zi­pline, the drone de­liv­ery com­pany that is sav­ing lives in Rwanda by fly­ing blood to ru­ral ar­eas to pre­vent women from dy­ing dur­ing child­birth. While the in­vest­ment is cer­tainly laud­able, it’s also clear that the po­ten­tial for Zi­pline around the world is colos­sal. As tech gi­ants and e-com­merce play­ers around the globe have al­ready found, solv­ing the ‘last mile’ of de­liv­ery has proved one of the in­dus­try’s thorni­est prob­lems.

“If you re­ally think about it, this com­pany has been do­ing this for five years now, so we’ve got a back­log and a his­tory of de­liv­ery,” Prince Khaled ex­plains. “There’s an ac­cu­racy of about 10 square me­tres, even though you’re re­leas­ing the drone from a few thou­sand feet up. The idea be­hind it is that when the Western world opens up to drone de­liv­ery, we’ll al­ready have the his­tory. We’ve al­ready done our home­work, we have case stud­ies and we’ve al­ready been suc­cess­ful.”

Gel­tor – a plant-based col­la­gen man­u­fac­turer – also looks to have in­cred­i­ble prospects. And this is es­pe­cially the case in the Mid­dle East, given that con­ven­tional col­la­gen comes from pigs and fea­tures in a huge per­cent­age of cos­metic prod­ucts, many of which are sold in the Mus­lim world.

“We’re heav­ily into that com­pany and I 100-per­cent trust the CEO, Alex [Lorestani],” the prince says. “They have lit­er­ally just re­ceived ha­lal cer­ti­fi­ca­tion from a board of schol­ars in the US, and we’re work­ing with them to get sim­i­lar cer­ti­fi­ca­tion in Saudi Ara­bia, Pak­istan, Malaysia and Egypt.”

Also ex­pe­ri­enc­ing sold take-up in the US is Pro­lacta Bio­science, a Los An­ge­les­based firm that col­lects hu­man breast milk through dona­tions or pur­chases, and then uses a biore­ac­tor to con­cen­trate the milk, dou­ble the pro­tein and quadru­ple the fat in it.

“This then be­comes a su­per­food for su­per-pre­ma­ture ba­bies,” Prince Khaled says. “Sadly the med­i­cal in­dus­try refers

to these chil­dren as the ‘mil­lion-dol­lar ba­bies’ as it costs fam­i­lies and in­sur­ance com­pa­nies so much to main­tain ba­bies in neona­tal in­ten­sive care units.”

Use of the Pro­lacta for­mula re­duces the amount of time pre­ma­ture ba­bies spend in these units from up to 14 weeks to be­tween two and four weeks.

“Right now we’re work­ing with reg­u­la­tory bod­ies at min­istries of health in the re­gion to in­tro­duce Pro­lacta to hos­pi­tals, be­cause health­care is sub­sidised heav­ily in the Arab world and it’s cost­ing the gov­ern­ment a lot of money,” Prince Khaled re­veals.

“In fact, there’s a grow­ing num­ber of pre­ma­ture births in the re­gion, be­cause of the in­crease of other fac­tors. So we’re see­ing a huge op­por­tu­nity for healthy ba­bies to live a beau­ti­ful and nor­mal life and sav­ing the gov­ern­ment hun­dreds of mil­lions of dol­lars in the process.

“We’re work­ing with these gov­ern­ment bod­ies and we’re work­ing to bring Pro­lacta into the re­gion. They’re al­ready in about 20 per­cent of hos­pi­tals in the US now. So the un­der­ly­ing mes­sage for me is that I will al­ways in­vest in com­pa­nies that have pos­i­tive im­pact on the world other than just be­ing prof­itable.”

Home-turf de­vel­op­ments

Saudi Ara­bia, in par­tic­u­lar, is a key area of fo­cus for Prince Khaled in the near term, as the king­dom seeks to diver­sify its econ­omy away from oil as part of the Vi­sion 2030 plan. Not only will Arada, the de­vel­oper that forms part of the KBW In­vest­ments port­fo­lio, be launch­ing projects in Saudi Ara­bia in the not-tood­is­tant fu­ture, but KBW Ven­tures will be mak­ing a size­able play in the en­ter­tain­ment space, a new multi-bil­lion-dol­lar in­dus­try for the coun­try.

A re­cent ex­pe­ri­ence in New York at Ocean Odyssey, a ‘vir­tual aquar­ium’ that is run in con­junc­tion with Na­tional Geo­graphic, has re­sulted in Prince Khaled de­cid­ing to launch the con­cept re­gion­ally, along­side Saudi Ara­bia’s new Gen­eral En­ter­tain­ment Author­ity (GEA).

“I said this has to be in Saudi, but it has to be big­ger, it has to be geared for the Saudi pop­u­la­tion,” he says. “They’re re­ally in­ter­ested in part­ner­ing with us and en­ter­tain­ment is what I’m re­ally in­ter­ested in driv­ing to­wards with re­gard to 2030. For me, within the next five to seven years, there won’t be a need for any zoos in Saudi Ara­bia, you’ll have Ocean Odyssey, and [we’re also con­sid­er­ing] this idea of hav­ing an ex­pe­ri­en­tial in­door theme park that can also be a vir­tual zoo.”

Prince Khaled is also quick to praise the ar­chi­tect of the 2030 Vi­sion, Prince Mo­hammed bin Sal­man, Saudi Ara­bia’s crown prince and a man he had pre­vi­ously re­ferred to as a friend.

“We are friends; but ob­vi­ously our re­la­tion­ship is very much on a pro­fes­sional level: he’s the Crown Prince and I treat him as such,” Prince Khaled says. “I look up to King Sal­man and to Prince Mo­hammed bin Sal­man so much. King Sal­man, or Prince Sal­man as he was when he was the Gov­er­nor of Riyadh, has been a huge in­flu­ence on my life. The way he con­ducted him­self and the way he trans­formed Riyadh into what it is to­day is some­thing I’m in awe of.

“Prince Mo­hammed bin Sal­man was al­ways with His Majesty when he was Gov­er­nor of Riyadh, so I got to know him dur­ing that time. He’s been a very pos­i­tive in­flu­ence for the coun­try and the re­gion. He’s a man of high moral grounds and in­tegrity, very hum­ble and de­mand­ing. De­mand­ing for re­sults that is.

“This coun­try has seen dra­matic pos­i­tive shifts in the past few years and that’s all be­cause of His High­ness’ vi­sion and courage to make these vi­sions into a re­al­ity. I do know him per­son­ally, and we do in­ter­act. I re­spect his pri­vacy and I re­spect his enor­mous re­spon­si­bil­i­ties. I will al­ways be be­hind His High­ness and by His Majesty’s side, and by Saudi Ara­bia’s side; es­pe­cially if there’s any­thing I can do to help.”

Prince Khaled’s unique ex­po­sure to Sil­i­con Val­ley puts him in a solid po­si­tion to ap­praise the lo­cal start-up en­vi­ron­ment, for which he has been a vol­u­ble pro­po­nent in re­cent years.

“The ecosys­tem here is lack­ing, and that’s the re­al­ity of it,” he says. “We’ve heard about these com­ing changes for SMEs, but they haven’t re­ally hap­pened yet, apart from some small changes here and there. Ju­di­cial sys­tems need to change, the ecosys­tem for start-ups needs to change, it still needs to be more invit­ing.”

Of par­tic­u­lar con­cern is the re­gion’s in­tol­er­ance of fail­ure, the prince warns. In ad­di­tion, he also points out that ven­ture in­vest­ing is still rel­a­tively low key in the Gulf, with in­vestors more in­ter­ested in de­ploy­ing cap­i­tal else­where.

“A lot of peo­ple aren’t in­vest­ing in ven­tures, they’re in­vest­ing in real es­tate and fixed as­sets that are gen­er­at­ing rev­enue as rent,” Prince Khaled says. “That has to change. You do have tech in­vestors here in the re­gion, but they are in­vest­ing in com­pa­nies that are al­ready pre-IPO, when they’ve al­ready made it. When a bank pitches a pri­vate com­pany to you – and I have to be care­ful here be­cause I’m close to a lot of bankers and I don’t want to an­noy them – you know it’s al­ready too late. My fo­cus is def­i­nitely on com­pa­nies that haven’t got to that stage, so be­fore they’ve made it.”

Fam­ily tra­di­tion

Prince Khaled’s busi­nesses and in­ter­ests may have branched out in a dif­fer­ent di­rec­tion to his fa­ther’s, but he says he is still learn­ing from a man who is widely re­garded as the re­gion’s most cel­e­brated busi­ness­man.

“I lis­ten to him a lot,” the prince says. “I lis­ten to ev­ery­thing he says, and I watch ev­ery­thing he does very care­fully to re­ally an­a­lyse and un­der­stand him. It’s like when I grew up – you’re al­ways learn­ing thanks to peo­ple like him. I con­sider my­self a lis­tener and I take in how peo­ple like him re­act, how peo­ple like him con­duct them­selves when it comes to busi­ness. So yes, it’s re­ally a fa­ther-son re­la­tion­ship as op­posed to any­thing else.”

It’s not too much of a stretch to imag­ine that many of these com­pa­nies will be house­hold names in the near fu­ture if their strate­gies pay off. Re­ports in the US are al­ready stat­ing that Be­yond Meat is in touch with in­vest­ment bankers about a po­ten­tial IPO.

In the nearer term, Prince Khaled has an ag­gres­sive time­line for in­vest­ments and part­ner­ships. Of the eight planned for 2018, five have been com­pleted al­ready, and the po­ten­tial for growth in each of them is sub­stan­tial. “I’m in­vest­ing in these com­pa­nies for the long haul,” Prince Khaled says. “I’m with them be­cause I be­lieve in them and I be­lieve in the im­pact they can make in the fu­ture – so it’s about a lot more than just fi­nan­cial re­ward.

“That be­ing said, I’m not a char­ity, so we’re def­i­nitely there to make money. But I’m their part­ner, they’re my part­ner and that’s how we com­mu­ni­cate with each other. The fu­ture is ab­so­lutely a blank slate and I’m re­ally ex­cited about the in­vest­ments we have and the part­ner­ships we’re build­ing right now.”

“When the Western world opens up to drone de­liv­ery, we’ll al­ready have the his­tory. We’ve al­ready done our home­work”

Prince Khaled ex­plains the Al­jada Cen­tral Hub project to Dubai Crown Prince Sheikh Ham­dan

Prince Khaled with Jor­dan’s Min­is­ter of Tourism Lina Annab

Dis­cus­sions with Jor­dan’s ruler, King Ab­dul­lah II Bin Al Hus­sein

The sign­ing an­nounce­ment event for the Na­tional Geo­graphic Oceans Odyssey in New York

Fo­lia, a plant-based menu, is now avail­able at Four Sea­sons Ho­tel Los An­ge­les at Bev­erly Hills

Fo­lia’s menu is in line with Prince Khaled’s strict ad­her­ence to ve­gan food

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