You’ll have heard about Careem’s acquisition of Enwani, the Saudi home delivery service and how it started.
But you what you might not have heard is the story of how Enwani was helped to reach the point of exit.
Aiming to solve the postal address problem in Saudi Arabia, Enwani joined the incubation program Badir in 2011. A year later, it participated in the first activities of the Sirb angel investors network.
“We introduced them to their first investor when they were in their early stage,” Sirb president Khalid Suleimani told Wamda.
Sirb is an angel investor network launched in 2012 as an initiative of King Abdul Aziz City for Science and Technology (KACST). The city was assigned to develop the National Plan for Science, Technology and Innovation, and one of the outcomes was Sirb.
The network aims to “develop startups and turn them into investment opportunities in order to support the knowledge economy and youth initiative; in addition to providing investments opportunities for investors in the field,” Suleimani said.
While the oil sector in Saudi Arabia accounts for around 80 percent of budget revenues, 45 percent of GDP, and 90 percent of export earnings, the country is aiming to restructure its economy with such initiatives compliant with Saudi’s Vision2030: increasing non-oil revenues, limiting spending and diversifying the sources of national wealth.
In this vein, Sirb is making part of its mission to actively get people into employment with startups. The age group 25 and 54 is around 46 percent of the population, while the Saudi unemployment rate for those above 15-years-old is 11.6 percent in 2016.
This network plays an important role in bridging angel investors with entrepreneurs by providing an electronic platform, empowering investors and entrepreneurs by giving them access to their database, and organizing training sessions and regular meetings to pitch their ideas to investors. It also has partnerships with incubators and accelerators and entrepreneurial centers in universities.
Suleimani explains that they invest and encourage startups in the tech fields by creating a channel where every young person with an idea or a tech startup can get support.
"One the most important aspects of this channel are the events they organize: startups pitch their ideas to Sirb’s registered angel investors. It is through a similar events that Badir sponsored, that Careem met Enwani."
Other successful partnerships and acquisitions that have come out of such events include Mango Jazan for selling mangoes. They met an investor who has pledged to buy all of their produce and distribute them, no matter the quantity.
The latest event, held on October 6, hosted seven companies looking for investments totalling about 10 million Saudi riyals (US$2.66 million). Suleimani said the number of initial sales for these companies was around 11 million riyals (US$2.93 million), and that they accounted for 40 jobs. After they received an investment, that number was supposed to rise to over 100 jobs.
Considered as one of Sirb’s biggest, this meeting also hosted startups from Turkey and Dubai for the first time.
Why angel investment is important
Suleimani said getting angel investment could put a startup in a better position when it came to seeking VC funding.
Sirb wants to educate the market and they do this with their workshops for both startups and investors.
More than 20 to 30 entrepreneurs benefit from Sirb’s services every year. They train investment-ready startups how to be eligible for investment, while they direct others to Badir incubator to enhance the business model.
Going forward, Sirb is planning to organizing two or three pitching events per year.