EUVC #230 Noor Sweid, Global Ventures

0:00Hi, everybody, and welcome to the European VC podcast. Today, we have with us Noor Sweet from Global Ventures. I am Andreyas, and with us today, I have our very good friend Omar Hassan from the Mina Tech Fund. And Noor in the hot seat is the general partner of Global Ventures, a UAE-based international venture capital firm with a presence in Cairo, Jada, Riyadh, Tunis, and Lagos. Noor was the chief investment officer at the Dubai Future Foundation and managing partner at Deep Ventures. Prior, Noor joined her family business Deepa, where she scaled the business tenfold, executed four cross-border acquisitions, and led the region's first IPO on Yeliti and Nasdaq Dubai, achieving a billion-dollar valuation.

0:47Making UBC one of the less acclaimed outlets to be featured in, Noor has also been recognized in Forbes' World Top 50 Women in Tech list and also the Arabian Business 100 Most Powerful Arab Women list. And to top it off, she's also received the prestigious Arab Women Award for Finance. So if you're listening in, love our show, do drop us a review, follow the pod and subscribe at EUVC. This is what they're finding down. Tear down this wall. It's more than just an ally. This is a union of values. United and determined we can serve as a model for other regions of the world. The nature of a problem requires a European response.

1:38Europe is a story of new beginnings. New beginnings. Let's start acting, acting, acting, acting, acting, acting. This show is not investment advice and the hosts of this episode may be invested in the funds and companies featured. Nora, amazing. Thank you so much for joining us. As my good friend Andreas alluded there in the intro, there's a lot of accolades there, but there's also there's a lot of story behind Nora. I've heard about Nora for many years and I've been dying to kind of hear firsthand from you the journey that you've been on. So maybe let's start with that. Let's start with the audience.

2:10Tell them a bit about Nor and Global Ventures, but prior to Global Ventures, how this all came about and your journey, not just in venture, but prior to that. So my journey has been, I guess, a series of very happy accidents. I never planned to be a venture capitalist. Before that, I never planned to work in government. So I was at the Dubai Future Foundation for a while. And before that, you know, in VC. And if I had to take a look backwards, as Andreas mentioned, before that I was in a family business, I joined a company my father had founded in 95, and I joined in 2005, an interior contracting company.

2:46And we grew that from six markets in the Gulf to 22 markets globally in three years. We 10x the revenues, the IP in April of 2008 and the week of time. And I stayed for five years running the public company side of things, the expansion, the strategy and so on. But that was never my plan. At the same time, I built the first yoga studio in Dubai, Zen Yoga, a skill that exited to a private equity firm, but that was never my plan. So I take a look backwards at my life and I just say, it's really a series of just very happy accidents and opportunities that I think I was lucky enough to be curious to investigate and then enjoy.

3:28So that's really, as I look back, and before that, business school and strategy consulting for a few years before that. So nothing is really planned and simple and straightforward. It wasn't like I woke up one day and said I want to be a VC. It was much more my struggles with being an entrepreneur and realizing that in some ways building something from zero to$1 million in revenue is harder than a$1 billion company. And I had done both and done both simultaneously and realized that entrepreneurs actually have it harder in some ways. And the question is, how can you help and support? And so with that, I went into angel investing in 2009, just to be helpful to entrepreneurs in the region.

4:12And then realizing that the regional ecosystem for entrepreneurs and venture was massively underfunded compared to global ecosystems. Every time I'd work with one of the founders that I'd invested in to raise money globally, they would get funded and then they would move. And that's not really helpful to participate in a brain drain. So I really got curious as to why is there no VC money in the region and what can we do about that? And that's how I got into venture capital. It was just much more as an entrepreneur trying to solve the problem of access to capital for founders. And that's still what we're trying to do at Global Ventures.

4:50So it really is working with founders to give access to strategic capital that then we can support them on their growth path. So we started the firm in 2018. Those were very early days in our ecosystem. That year, there was just a few hundred million dollars deployed into venture capital across all of MENA, all year, all deals. And I always say that it's the size of a one-series C-round in the Bay Area. would be our entire ecosystem all year, which is really sad, but at the same time, such an opportunity because it means that valuations were lower. It means that entrepreneurs were hustling to create businesses that were financially sustainable from an earlier stage and weren't just burning through$10 million because they knew they could raise another 10 in three months.

5:37So the ecosystem was very, very nice. And that was when we raised Fund One, which was the 2018 vintage. And that was really the inception and global venture is not because we invest globally or rather because our companies aspire globally and so just under half the portfolio now has more revenues outside the region than within the region and when we invest there are only regional companies and it's really the fact that we can build these global companies from the region so that's you know the background is a little bit of everywhere pulled together i love it when somebody says it's a series of fortunate accident but you know if you go if you go back to the first fortunate accident we've kind of gone into angel investing in the middle east to start off with just give us an idea of what the ecosystem was like back then what kind of ideas were coming to you and you know was it quite easy to find entrepreneurs at that time because from my memory that was really kind of you're doing at the beginning when we weren't even talking about startups or entrepreneurs back in those days?

6:38No, this was before unicorns existed. This was before entrepreneurship was kind of a hot thing. It was when, you know, you were a business person and you were just starting your own business. And this was really, you know, with that mindset, with the whole, I'm going to start a company, right? Not a startup. So no one started a startup. People started a company. They were building a business. I think that that was when it was, if you're in Dubai, you would know companies. So whether it was Zen Yoga that I founded, NBAR, NSTYLE, and ultimately, you know, it became things like NetBish, which was one of the very early tech companies out here, and Mumsworld, which was an angel investment as well.

7:23And that was in 2012 and 2011. So we think about the first generation of these founders and what they were building. And then that was, a good 11 or 12 years ago. Going from this angel investing perspective and investing in the very early days in the ecosystem, looking at that compared to today, where I think it's not wrong to say that there's not many geos that are talked as much about in the global VC landscape as the Middle Eastern region right now. So could you tell me a bit about what it is that you're seeing happening now in the region and what's kind of underlying that growth? So I think globally, there's been a change in the venture landscape in the last couple of years, the good and the bad, right?

8:13And the bad being the valuation corrections and how that's hurt a lot of the underlying companies as well as the VCs. But I think the silver lining there is we've gone back a little bit to fundamentals, that makes sense. So before, you know, revenue multiples, we used to have earnings multiples, which, you know, are definitely a thing of the past. And yet, about a quarter of our portfolio is EBITDA positive. And for a Series A focused fund that's very unique on a global level, what it means, though, is that regionally, due to the lack of capital in the ecosystem historically, founders have always been focused on being financially sustainable.

8:51And I think that now that the world has noticed that that's actually relatively important, can we find companies where the valuations are not overinflated, that have the economics that make sense and are sustainable? the regions become that much more interesting. I also think that there's this awareness of emerging markets, whereby technology that gets built and used in emerging markets and scaled in emerging markets actually usually tackles problems that affect hundreds of millions of people, and where the demand is really based on human needs and people's needs and growth of the ecosystem rather than an incremental 2 % change.

9:30So I think as we look to using technology globally to impact not just lives, but also to scale in a sustainable manner, that technology does have to be meaningful. And I think that that also is happening more in emerging markets than perhaps in markets that traditionally have more R &D. And so when we take a look at that shift towards where does capital want to be deployed, it's sensible valuation and markets where technology is deployed to affect hundreds of millions of lives in a sustainable way. And that's really how we're thinking about the new capital that's coming to the region and the opportunity that the region has.

10:10I'm curious to ask you, because where do you see the startups from the region growing into? because as you said, you're a global investor because your startups aspire to be global. Do you see them growing into Europe and the U.S. or do they grow more East and South? Both. I think that, you know, there is the opportunity in both the West and the East. We've seen historically that they're going more into Europe and the U.S. So companies based in the region are really leapfrogging. So historically, we had a large problem with financial inclusion. So five or six years ago, you had 85 % of the region was not able to access financial services.

10:54So you had 85 % of financial exclusion. We never really built banks or any other infrastructure, historical infrastructure, in order to address that. It was fintech. And so you're able to use technology, leapfrog that, that now the region's at 55%. And that's a drastic shift in just five years. So when you think about how we can use technology and leapfrog, then the next step becomes, is this technology better than what's available globally? And how can it be applied? And so with health care, we had the same problem. So, for example, in sub-Saharan Africa, you have 0.2 doctors per 1 ,000 people.

11:36In MENA, it's one doctor per 1 ,000 people. In Europe, for context, you have four doctors per 1 ,000 people. So again, we're never going to build enough hospitals to overcome that access to health care. And it's not just telemedicine. It's also remote diagnostics. It's also e-pharma. It's everything that comes with that. And so you take a look at our portfolio, and now you have 5.5 million people that have access to health care that didn't before these companies grew. So as you start to think about that leapfrogging, now we're seeing supply chain leapfrogging. So the region historically has imported most of everything.

12:10And now there's this large push on supply chain to say, can we manufacture ourselves? Well, we're not going to go build manufacturing style from the 90s. We're going to build additive manufacturing, 3D printing. There's no software to enable those. So we're going to build our own software, and then we're able to export that software. Just like with healthcare, for example, there's a company that we invested in called Proxiny that does virtual or augmented reality for surgeries. And you can scrub any doctor into any OR anywhere in the world. They did over 17 ,000 surgeries last year in the U.S.

12:43But it's a regional company that was leapfrogging to serve a real need for the region. And that real need is global. It's just more dire in the region. And now we're seeing the same thing in supply chain. We'll see the same thing in Agritech, one of our companies, which is fantastic because it's a lot of innovation in the region. It's not just this copycat approach. So we still import over 90 % of the food. Again, it's desert, so that's expected. But in a world where you can start doing vertical farming, your biggest cost component that makes that unviable commercially is energy. And so if you can reduce your energy consumption, and most of the energy consumption there is related to water.

13:23So we have a company that reinvented water desalination. It's called Red Sea. And they now desalinate water for the purpose of vertical farming. And they've reduced the energy consumption by 95%. they're now retrofitting farms in the US and in Europe and so on. But it's out of dire need. We need to feed our people. There isn't enough energy. We need to desalinate water. How do you fix that problem? And that innovation does grow global and does scale globally. But the problems are just not as dire in the US or Europe. And so no one needs to tackle those problems. Those are the problems where innovation comes in here.

14:00And then those are things we're able to export and to share with the world. Lou, out of your portfolio at the moment, where do you see the biggest opportunities for innovation? I think right now, supply chain is changing drastically. So everything, like I mentioned, like additive manufacturing. So how do we manufacture and what are those materials? So for material science, the process of additive manufacturing, the software that enables that and lets you roll it out across multiple companies. So for example, one company, Mensa, they work with large oil and gas and industrial that have$100 million and over in spare parts.

14:37Again, massive inventory, massive ways. What if we create 3D digital blueprints for each of these spare parts? And anytime you need something, we manufacture it locally using additive manufacturing rather than shipping it halfway across the world and having it there just in case. So the whole mindset shift. And then you go all the way to commercial drone deliveries. So companies that are really working with, why are we shipping things from a port to a warehouse using trucks on old roads across emerging markets where street addresses don't exist, when drones can do this in a much more efficient way?

15:10And it's all B2B. And so and these companies are real with real revenues, real EBITDA, right, scaling massively. So that opportunity to leapfrog in supply chain exists more in emerging markets where this is a real, real problem than it does where it's not. And it's already streamlined in other markets. Just linked to that, we've had this conversation in a couple of our previous episodes. And without getting it, without picking sides, if you look at the region and innovation, you know, we were trying to explain to people kind of the makeup of the GCC, the Levant, North Africa. where not saying you're where do you see the most promising country but where do you see typically innovation coming from is it kind of the north african region is it gcc or you see more in sub-africa each destination has its own demand its own market its own nuances so some areas are really solving for a very large middle class um right and it's really about food delivery and feeding people and educational needs and healthcare needs.

16:16Others are trying to become trading hubs. So it's really about supply chain, logistics. So it really varies. I think each market is very unique. And that's exactly what provides the opportunities across the region, is being able to identify each market, its uniqueness, and therefore the opportunities that present themselves. Which market excites you the most? All of them, honestly. online it depends if it's supply chain tech i love the uae right it's agriculture we're looking at egypt if so you look and if it's consumer you're looking at saudi right so each market has its own real offering no amazing and so an interesting thing we're trying to kind of paint a picture of you know as a as an investor coming from outside what the various factors to consider and where those markets are you kind of you know the earliest stage stuff in egypt or kind of you know scaling into the uae then into saudi etc but that makes a lot of sense and you know just quickly you've been in the ue a very long time and through your journey things have changed so much over the years you know from your rollback at future foundation to what you're doing now if you can kind of take three things that you're most excited about over the next three to five years and you see happening within the ecosystem, both from a local perspective and a global perspective.

17:41What would you, could you pinpoint three? You know, I think it would be great to see a few more large exits, maybe one or two IPOs to just really solidify the capital market opportunities for a lot of these startups. And I think we'll see that later this year. So that would be fantastic. I think it would be great to see one or two companies scale globally a little bit and emerge or acquire even a global player because again that then validates the region's global presence and equal technology and then you know oh i guess that's two things you asked for two or three so there you go there's two things two or three i tell you i i i agree i'm excited i think you're you're 100 I think, you know, there's a couple of things that I would love to see.

18:30A, a regional startup go global, truly global, and put its footprint on international markets. I think that from a UAE perspective, can you now build to go global from here? It's a real opportunity. I think the other thing is, you're right, the IPO. You know, I think having an IPO to come out of this region will be phenomenal. And I think we'd be, I guess, close a few times, but never quite got there. And so I agree with you on that. And before we kind of near the end, you've been to Expand Northstar so many times. You've been to the conference in the UAE. If you can kind of think of anybody coming in visiting Expand Northstar this year, how would they make the best use of their time here or what should they be experiencing?

19:13I think as people come into the region, it's good to meet with the founders. So I think as much as we do see people coming in looking to advance their capital formation, I think what's more interesting is really meeting with the founders, understanding their challenges, understanding how the ecosystem's growing, the solutions that they're building, the companies that they're growing, and really getting a feel for what's happening here. And it's not that hard to find the founders and they're all very friendly. And, you know, the question is, spend time with them and understand their journeys. And that'll help you understand the ecosystem.

19:49That I think is very important. Amazing. And Noor's experience, kind of three things you wish you'd known 10 years ago. One is, you know, to celebrate the small wins. So I think, you know, in the 20s and 30s, I took myself way too seriously and didn't didn't pause enough to kind of celebrate small wins. The second is that, you know, you eventually get there. So just enjoy the journey, right? And really like focus on enjoying the journey. And the third is just to surround yourself with people you enjoy being with. I think enjoying the moments, enjoying those little wins, I think it's the best thing.

20:28And I think a lot of people surrounding yourself with people you enjoy being with, I've heard somebody say, if you have more than five friends, then you've probably got too many. I'm not sure I agree with that. Norse, thank you so much for being with us today. It's a real pleasure having you on EUVC. Hopefully, you'll join us again on the next episode. But I think if anybody coming to the UAE, if anybody wants to understand a bit deeper about ecosystem, I think you've probably been the best person. And then hopefully, they'll connect with you directly. Of course. That would be wonderful. Thank you, Alman.

20:58Thanks, Andreas. Thank you so much. This is what they're finding down. Tear down this wall. It's more than just an alliance. This is a union of values. United and determined, we can serve as a model for other regions of the world. The nature of a problem requires a European response. Europe is a story of new beginnings. New beginnings. Let's start acting