Abu Dhabi: Into the Nucleus of Innovation - Investing in Growth Sectors

[Music] hello everybody it's great to be back in Abu Dhabi for finance week very happy to see you all let's go straight into the topic of today and I would love to ask Kate here to the left of me the very first question now because we are in the UAE Capital right from your very Global Perspective at the um Global private Capital Association how do you view Abu dhabi's a position as an innovation and startup and just Capital Marketplace great thank you so much Martina it's such a pleasure to be here again at ADF W first this is a little gratuitous but I can't help going back to the opening speaker who I heard briefly this morning at the Venture session was an academic um looking back at the history of Silicon Valley and trying to map out through data how to be a successful Venture investor as far as I'm concerned the rest of the world does not need to learn from Silicon Valley I think we have moved on there are new models and The Innovation that is happening outside the US is a really important part of what's driving um Global Innovation today so I I just I just have to throw that in there um of course the UA UAE has been a capital exporter for many many many years um uh well over you know probably two decades and I think the shift that I've seen um in Abu Dhabi over the last decade or particularly last five years is instead of being a financial exporter of capital that is De investing in say develop markets the US looking finan looking for financial returns today Abu Dhabi is looking for strategic outcomes and they're looking for strategic outcomes in key sectors to transition the economy and to think about um the the environment in the country that that Abu Dhabi wants to be for the future um within that um there's been a really growing relationship between Abu Dhabi and Asia in particular India China southeast Asia and a lot of strategic Capital um and ecosystem building across those markets so we've seen both Financial Capital moving out of um out of Abu Dhabi into China into those markets and key sectors but also drawing back in technology and and strategic Capital back into the into Abu Dhabi and I think that is really the repositioning of of Abu Dhabi today within that I would highlight four sectors there's clearly a focus on food security uh in in Abu Dhabi and so there's been there have been strategic investments in agtech globally um I would mention there was a a large round where g42 took part in a deal in Indonesia for E fisheries and again in each one of these you can assume that there's something that's ACR back from an innovation or a technology perspective to Abu Dhabi um another key sector is biotech and healthtech um most recently mubadala did a large round for um uh a biofarma uh business in China uh sorry it's just jumping out of my head right now a little jet lagged um uh in partnership with the global Consortium of investors but of course we see so much happening where New Life Sciences businesses are being brought to to Abu Dhabi so um healthtech uh biotech of course um climate Tech and everything related to climate transition and electric vehicles and we've seen um large players here invest in India there was around where adq was in uh a billion dollar round for um Tata electric vehicles in India and we've also seen Global Investors crowding into startups tendered raised a $30 million um series a recently from some Global Investors here here in the UAE and then finally of course artificial intelligence it's the buzzword of the day it's what everyone's focused on um and um there's just the UAE is positioning in such an important way and they've really proved themselves as the center of gravity by pulling in Microsoft with that 1 billion $ 1.5 billion partnership with um with um uh g42 Asset Management I mean that was that was a quite quite a long conversation and I think some hard choices were made and Microsoft decided to put the money here and decided to partner with Abu Dhabi G4 to be the place to be Kate that that's why we're all here right and so many interesting uh appealing and attractive uh sectors as well new haven't seen you in some time so a lot of developments here in this part of the world also in the startup uh industry right I'm sure we have a lot of startups here um looking for opportunities uh at Global Ventures you've always been a great Advocate uh helping startups as well so tell me a little bit how you see the potential for Abu Dhabi based startups thank you Martina good to see you Kate ladies everyone um it's really good to be here I'll keep it short um I I think this place is definitely one of the new kind of centers of Entrepreneurship globally so I run a VC firm we're based here we've been an hub71 ecosystem partner for goodness maybe six years now seven years now since it started it's been fantastic and the reason is that I think a lot of a large part of the regulatory infrastructure here is very intertwined with the financial infrastructure which is very supportive of Entrepreneurship I don't think this might we have some mic uh issues if we could check the sound hold it like this no it's fine I think it's it's closer and closer um so the way that we see it the UAE in general and Abu Dhabi specifically really has this ability to move things forward and the forward the tech forward government regulator enables that so we just made an investment in a company based on ABAB called bios Sapien which is in the tech biospace um which enables the delivery of any medication so I think oncology localia 3 printed chips that are stapled or stitched onto tumors so the whole process has changed it's less than 10% of the cost of traditional chemotherapy treatment you have none of the side effects and this is now in Cleveland Clinic and live clinical trials so to think through the regulator enabling that along with the infrastructure the hospital providers along with the founder that is based here to provide a solution for hundreds of millions of peop across the global South is just fundamental back to Kate's point is Silicon Valley Silicon Valley that did incredibly well but right now you have billions of people living in the global South that are looking for new centers of Entrepreneurship ones where you have very close access and understanding of local Regional or Continental problems and then the ability to build solutions that really help solve those immediately in a way that works for these markets and I think that's where these cities are playing an instrumental role bringing the world best talent World in-class Tech and Tech forward Regulators to solve these massive problems um so for us this is just a wonderful place to be we've been here for years we've invested in 61 companies and we'll continue to do more amazing can't wait for 2025 already Fara you are a global citizen like all of the ladies here on stage moving between Riad and Delhi and New York um how do you see this Marketplace the capital of Finance Abu Dhabi when it comes to fostering Innovation Investments and what kind of unique opportunities do you see here thank you so much for that and uh yeah two decades in the US and I can't imagine anywhere else besides here it is so safe I just left my handbag open uh at the back and I know that it nobody leaves the room please exactly um coming back to stride Ventures we the first and only Indian um you know fund manager to get a license here at 0gm and this is for investing in the region um where the largest uh provider to the startup ecosystem in India and we see an incredible opportunity here in Abu Dhabi and in the UAE in particular um you know the the preference for uh this particular Emirate to build a knowledge-based economy has led to a lot of innovation there's a huge amount of startup um support uh to n's point the regulatory Frameworks the Visa the you know ease of doing business in here and the ease of I mean you can imagine right anyone who's been in the US us and Tred the H1B Lottery it's pretty hard but imagine here you can come you can set up you can get a job you can start a start a startup it's just it's extremely supportive we see the startup ecosystem over here um it's probably a few years behind India but the speed to Market and the access to Capital is absolutely amazing and that's exactly why we're here to make sure that we are providing debt to um high growth startups and bringing the culture of uh you know urgency and uh you know high performance to the region which already exists but we're very very happy we close work very closely with hub71 and uh adgm and uh we're regulated by adgm and it's been fantastic working with them and uh providing debt to the startup ecosystem just a quick followup how big is stride Ventures presence here in the region or even in the UAE itself of course so in India we've uh cumulative deployed close to a billion dollars to date now um and in this region it's a $250 million fund with one turn we will end up deploying close to half a billion dollars um in this region so that's how large we are that's a significant amount M last but not least for the first round of questions uh PNY has been focusing on advanced technology and sustain sustainability as well how do these um priorities align with your uh strategy at bny going forward especially in this market so I think for this Market it's really sort of capital markets that really intersect with what we prioritize right so if you think about about what bny does we are critical infrastructure for Capital markets globally so 1 fifth of the world's investable assets flow through bny's platform we custody over $50 trillion of uh USD we uh sorry US dollar assets we uh are the leading us treasuries settler and clearer in the world I could go on and on um but really this region is so focused and the uee in particular on financial markets and capital markets that the intersection makes a ton of sense uh so if you look at some of the statistics I think uh GM AUM are up 250% year on year DFC AUM are up 60% year on year um the UAE uh Capital markets are now about to cross a trillion dollars uh USD market cap uh so all of that intersects very very well with our priorities uh and I would call out three priorities specifically uh one is sort of capital markets data analytics and AI that we're very focused on we have a scale platform in the us and we're keen to bring it here um another one is uh sort of wealth technology we launched along with our partners adq and lunate Alfa last year out of abudhabi it's already got 100 people working here in adgm Roger was on the one of the earlier panels today so wealth Tech is another area of priority for us um so really when it comes to Capital markets and financial markets technology uh wealth technology data analytics and AI these intersect very closely the other thing I would mention is that the UAE is partnering with some of the same organizations we are partnering with globally so I'll take my Microsoft as an example obviously there's a partnership between Microsoft and g42 AI is a priority Microsoft Azure is also a global strategic partner for bny um and we are investing heavily in AI on our side and we're actually one of the most advanced financial institutions when it comes to AI deployment internally and for customers so those themes are all very very aligned with what abudhabi is focusing on fascinating insights ladies now we have just come back from cop 29 Kate and you have always been a very strong advocate for climate investing as well um how do you see here um Abu Dhabi also as a place for climate change and and financing in that space um well I was going to talk a little bit more broadly about some of the the more impact lens but again climate is a massive driver of investment today it's it's important to note that we are in a down cycle even though you feel a little bit less in this part of the world um fundraising for private equity and venture capital is off significantly from its Peaks from a few years ago and one of the pieces the two pieces that are counter cyclical are everything related to climate and everything related to AI so um we see a lot of activity in the climate space and I think in many ways this part of the world was somewhat ahead because there's already been a focus on transitioning the economy um out of an oil dependent so we see a lot of Partnerships happening between investors in this part of the world and and of course you have the success success of areas like ma companies like mazdar others that have been built but the other thing that I just wanted to highlight a little bit from a broader perspective around the outcomes of these Investments and you know the the impact lens is um you know what metrics are being used for success for many decades we've had this idea of a unicorn and achieving unicorn status is a goal in and of itself for a startup and a marker of success at our organization we stopped talking about unicorns you know a few years ago because let's face it that's a financial speculation that's round maybe if you were in 2021 one thing was to be a unicorn in 20121 another thing to be is to be a unicorn in 2024 so just looking at what the underlying business is and not thinking only about the day that you're going to IPO or exit that company and you're going to have your cash out which is very important and let's face it that venture capital is there to deliver returns to their investors but where is that company going to be 6 months after the IPO a year after the IPO 5 years after the IPO let's think about the sectors that are being invested in and the business models that are being generated and the impact very important here in in Abu Dhabi in the UAE on society right because you're looking for job creation you're looking for environmental sustainability and I frankly I worry about this I mean there are a lot of people um opining on the impact of AI I think thinking about um the impact of AI on job creation and on the workforce that you want to have in your country is something to be taken into consideration alongside the short-term Financial gains to be made we've heard a lot the word uh collaboration and partnership so this is definitely uh something that we have to keep in mind and that's also very much enshrined here in Abu Dhabi n you are a venture capital leader um one of uh yeah the top women running the show here uh tell us a little bit about your advice for you know um investors looking uh at Abu Dhabi and and what kind of dos and don'ts they should be aware of um so I think from a venture capital lens there's so much opportunity here in the region um I think that this is one of the centers of it and I think that when we take a look at sectors people do get very excited about Ai and energy and climate and those are very very important sectors conceptually speaking but I do think there are lower hanging fruits so when we think about where do we want to invest today and we are by definition series a investors so companies have1 or $2 million in Revenue they want to grow very quickly they want to get to that $10 million Mark in two or three years so when we take a step back and we do a lot of research which we publish on our website about different sectors the fundamental question we ask ourselves is which industry five years from now is massively different to five years ago and specifically so in this part of the world and today where we come out with is yes AI is interesting it's an enabling factor for all Industries if you don't use it in the next two years you're probably going to fall behind your compet competition but industry-wise and thematically we believe that supply chain technology and agretech so anything related to food security are at inflection points 5 years from now the way we manufacture things is going to be unrecognizable to 5 years ago just something as basic as 3D printing or additive manufacturing 5 years ago was still proof of concept today is properly commercial and 5 years from now will be massively scaled the way we ship things drone deliveries everything you think through the supply chain all the way from what you manufacture and where to how you get it delivered is today at an inflection point and that's huge for this part of the world which has historically been a trading Hub then you think about agratech the way we produced food 5 years ago again indoor farming was still massively loss making in of concept maybe a handful of vegetables or fruits like tomatoes 5 years from now when we think about indoor Agriculture and the way that we do root grafting and the way we do everything on how we want to feed our people is going to be so different and why because in this part of the world again we import 85% of our food as do many of our neighboring countries so when we take a look at that and we say we're going to solve this it's an acute problem for us if you take a look at Europe or the US they import less than 30% of their food So when you say food security is important and we have population growth and we import 85% of our food then the mission is there to say how do we change this and we Embrace technology at a much faster pace and we Leap Frog and we invent and we've now invested in three agretech companies that all have patents across the board from indoor farming all the way to root grafting all the way to Material Science to allow indoor farming to absorb light but not heat so we are really solving massive problems in this part of the world so when investors come here and say what do we invest in it's great to invest in AI there's so much to do everywhere but these are the two industries that we find 5 years from now are massively different to five years ago at inflection points with real companies creating real revenues solving massive problems for this part of the world very important to focus on the lwh hanging fruits in Agri Tech as well and you know nor I lived in Dubai for five years such just after Dubai Deb crisis and the progress that we have seen in sustainable agriculture and Technology since then has been absolutely amazing and of course we know about the sustainability and diversification goals of the U government as well um Fara uh Venture debt also plays a very important role when it comes to climate financing and impact Investments and so on um how do you think that uh Abu Dhabi can align you know with uh sustainability diversification goals uh while at the same time making Financial returns for investors thanks for that it's quite a uh Qui I'll I'll make it quick there a lot to talk about but we really put our money where our mouth is and I think that um you know if I can share some stats we've done more than $300 million in deployments in the climate sector in India um which is more than any climate focused Fund in India um we're trying to take that up to a billion dollars within the next three years um and so it's very similar we're extrapolating those priorities to this region as well we have a huge bias for working capital requirements or um you know we we try to invest in compan companies where there is an impact in a climate sort of sector play um we like battery manufacturing battery recycling um ride hailing Etc so we've done a lot of work in the EV um and climate space specifically and that's a priority for us in this sector as well we've been hearing a lot and you know obviously with last year with cop as well there's a huge boom of uh climate Tech startups over here they're a bit on the early stage but you know we're looking at growing with them and making sure that we can provide them with the um capex at least right so it's non-dilutive so we do debt we are sector and cies agnostic but we can do from CDs a to preo and that is very broad we can do someone who's early stage we can do someone who's late stage and you know it's just it's been fantastic for here because we hear Abu Dhabi really prioritizing the climate space as well so um we're looking to grow with the with the ecosystem and um and yeah that's that's largely our priority and like I mentioned we're extrapolating a lot lot of those priorities from India to here as well lots of good news and interesting to learn about those opportunities and connections as well uh madha now also Global corporates uh big companies have been shifting their focus more towards uh emerging growth sectors it took a long time but finally the time is now uh it seems what role can Abu Dhabi play in this transition and can you explain maybe more about m&a sourcing and financing as well so let me touch on very quickly two or three ways that we innovated Me Andy and then how AB we can um supports there right so one we actively take minority stakes and Venture investments in uh companies that have a product that strategically aligns with what we're doing and that check comes with a POC at bny so it has to make sense it has to integrate with what we're providing or deliver something to our clients in the financial markets or Capital Market space right when it comes to digital assets for example that has become a full-fledged business unit within the company given how core it is to some of the work that we do right so that's no longer an incubation unit right that is a full-fledged business unit um and then growth Ventures which is uh uh the team that I'm on the leadership team of we build buy and invest in uh and co-build new Ventures right that uh sort of look to scale specific technologies that are strategic to what the bank is doing globally so I mentioned ala for example that's a great example of our school building in Abu Dhabi uh building for the region from the region we have wealth Tech in the us but we decided not to just export it here we wanted to build it from here for the local market while leveraging the team expertise and some of the backend infrastructure that we've built uh out of the US business we're now trying to do something very similar for data analytics and AI for financial services and really where Wabi can play a role is it's not just capital and we're not asking for the capital to leave the Abu Dhabi and go abroad we want to build here with strategic Partners not just Financial Partners so obviously capital is one core piece the other core piece is actively partnering with a partner here who for example can provide domestic compliant Cloud that's suitable for financial services um another partner could be a stock exchange or other Capital markets participant that wants to contribute data and monetize their data on our data analytics and AI platform so we bring the software other players provide other key strategic pieces and we co-build here together right so I think that given Abu dhabi's focus on supporting certain sectors that are so close to what bny is working on both in terms of capital markets AI wealth Tech Etc I think it's really about co-building for us we just have four minutes left so that gives one minute per lady here on stage and I'm Swiss so I need to finish on time Kate uh in one minute uh how uh do you see the outlook for uh Investments next year and where are your priority areas great will you give me the opportunity one more minute to to mention that it was a year ago we the global private Capital Association it mentioned its part announced its partnership with the Middle East Venture Capital Association meva so it's been great to be here through that partnership over the last year we're looking to do a lot more on training and ecosystem developing in this part of the world um markets overall listen we're hoping there's all of the macro stuff like where our interest rates going to be in the rest of it um I feel like this part of the world is a little bit more protected frankly from those um trends that are EXP Ed by the US so I'm looking to see the UAE and the GCC more broadly continue to develop its relationships globally and be a real Hub of energy and excitement you feel so much more positivity being in this part of the world than being say um well I shouldn't say it in maybe in US these days let's be diplomatic exactly and let's move here why not nor your 60 seconds um well I'm not going to give it away because I've just completed my book which comes out next month which has all of the secrets of where to invest in the next 5 years it's called coming of age and it's about the Region's rise of the entrepreneurial ecosystem here over the last 10 years and what we're looking forward to over the next 10 so look out for it starting January 10th and uh we can have a book signing ceremony at the next ADF W right okay um next emad in one minute lots of Trends but I'll mention two one is how to increase access for retail investors to private assets whether it's private debt uh uh Venture Capital private Equity how to make those types of assets more accessible to retail investors and we've just launched a platform for that in the US it's a tech and Ops platform and hopefully we bring it here soon um the other Trend I would mention is I know it's becoming a buzzword or cliche but but machine learning and gen in the capital markets and financial markets technology space will truly be um both from the workflow efficiency point point of view but also from sort of inside generation driving performance um and being able to look across as an investor your public and private assets and really being able to extract insights is going to be critical for that s AA nutshell your outlook um yeah I'm very key on this particular region I'm really really bolish and that's one of the reasons why we're here um we're seeing fintech we're seeing consumer and we are seeing a lot in the climate space as well so we're really bullish on those private credit as an asset class has really boomed um it's all over the world it's booming in India in the US um in Europe as well as here so we see a lot more in the Venture debt and private credit space one of the reasons why we're here and we're really excited about it and fixed income is something that's very palatable to the investors here to the family offices institutions Etc so from the lp base as well we do see a huge influx of uh funds coming in into this specific um sector there's a lot of Co Investments that are now now becoming important and the family Offices here are now also maturing getting a little more professionalized and so co-investments is now becoming more important to them and we're very bullish on um bringing that to the Forefront for them we are definitely all very excited about 20125 we have a book coming out we have a 195 women equality song being released as well in January so thank you so much ladies it's been fun having an all female panel and shangaan next next up FL thank you [Music]