Halal Industry Islamic Finance

Food and retail start-ups can look to another source of funding with new Savola VC arm


Savola Group has started a venture capital arm, adding to Saudi Arabia's rapidly increasing investments in start-ups.

There has been an intensification of venture capital investments from Saudi corporates and government-backed firms in the last few years, with data platform Magnitt estimating that start-up funding there jumped from $67 million in 2019 to $152 million last year. 

The acceleration of the start-up and VC scene follows government efforts to boost entrepreneurship especially since the April 2016 launch of Vision 2030, the Kingdom's overarching roadmap to diversify its economy away from its dependence on hydrocarbons.

Savola Group's VC arm will focus on Series A and B investments in tech and opportunities in the food and retail sectors regionally and globally, the company said in a statement this week.

The company, whose business is mainly in staple foods, said it completed two investments in January.

The first was a Series B investment round in UAE-based logistics digitisation platform Lyve and the second was a 100% acquisition of Saudi-based e-grocery start-up Lilbab. Both investments were funded through internal cashflows.

Savola bought Lilbab through its wholly-owned Panda Retail Company. The e-grocer is now rebranded as PandaClick.

Savola Group is involved in the food industry through its Savola Foods unit and also has financial investments in other companies.

It posted a 92% increase in profit for 2020 to 910.8 million riyals ($242.88 million), reaping gains from higher sales and margins in a COVID-19 pandemic year that saw customers stocking up amid lockdowns.

The company is 11.23% owned by Aseela Investment, 8.23% by AbdulKadir Al-Muhaidib & Sons, 8.21% by Abdullah M.A. Al Rabiah, 6.67% by the General Organisation for Social Insurance, and 6.36% by Al-Muhaidib Holding Co.

© SalaamGateway.com 2021 All Rights Reserved


tags:

Start-ups
Venture Capital