What key factors do you analyze before investing in the tech space?
Many investors make the mistake of venturing into technological investments that are unoriginal and do not have a competitive advantage. It is important to follow an investment and understand it from genesis and germination all the way to IPO. One has to identify where the company is going and its revenue and success drivers. In my 22 years of working with technology, knowing the lead investor in all deals helped me become more successful. I always look at who is investing in the deal, who is actively involved, and who is behind the brand before I make a decision. Another big mistake is that investors sometimes do not know what they are investing in. We only do direct, primary, and preferred shares, which is why when we promote a particular transaction, other investors pay attention because they know it is probably an oversubscribed deal. I focused on venture capital, because people in the region did not have the proper background or access to high-quality transactions. Small funds invest in the local community or regionally, but nobody was really dedicated to investing in and promoting deals in Silicon Valley. I knew we could address this market need, so we started to advise US-based funds and companies on how to approach and navigate through the regional investor landscape, specially engaging with HNW family offices, institutional investors, and the regional sovereign wealth funds, since the decision makers regionally were not seeing or did not have access to those deals.
What is Kuwait's potential in the tech sector, and how it is positioned at a regional scale?
The deal flow is in San Francisco, and the cash flow is in Kuwait and the GCC. Thus far, the only real tech unicorn that came out of MENA is Careem, out of Dubai. In Kuwait, there are great apps like Talabat, which was acquired by a European company for USD170 million, Carriage, 4Sale, and so on; however, these are small sums compared to deals in the US. It is a whole different league, and Kuwait has a long way to go. That is not to belittle players in Kuwait's tech sector because they are leading the path for the next generation. Kuwaitis in general are entrepreneurial in spirit, and the new generation of Kuwaitis is highly creative. The smart ones will find ways to adopt the latest technologies, localize it, and scale it. Equally important, Kuwait is slowly changing the laws and market dynamics that allow for innovation to grow. Kuwaitis are entrepreneurs who can create, compete, come up with good ideas, and fund them locally. That is the barometer we need to utilize when comparing regional countries.
What are your expectations for the year ahead?
Kuwait is one of the greatest tech investors in the world, and the government, through its different sovereign investment funds, has been early investors in Google, Apple, Uber, AirBnB, and Thumbtack, to name a few. One of the reasons for this is the country's sound investment policy. 2019/20 will be a major infliction point for the stock market in general and the tech market specifically, because a number of big companies “Decacorns" like Uber, Lyft, AirBnB, Slack, and Pinterest are getting ready to launch their IPOs. Uber's will be the biggest IPO in history, and it will change the dynamic of the US market, which will cause a tsunami and suck all the money before redeploying it across the market. As a result, there will be a huge M&A wave where several small companies will be acquired and people will be cashing out. This will create another wave of liquidity searching for deals, which in return will fund the development of other sub-sectors in the market and leading to further advances, such as in digitalization, robotics AI. Based on all this, 2019 will be extremely significant.