The profits of forward-thinking

 

When viewed from a financial standpoint, Wa'ed makes loans and take venture capital stakes in promising, transformative Saudi start-up companies.

As custodians and managers of Aramco's investment in the Saudi entrepreneurship ecosystem -- our Wa'ed Ventures fund has a nominal value of $200 million -- we are committed to prudent financial management and wise investment that benefits the Kingdom.

When you strip away the financial terminology and the spreadsheets, Wa'ed is investing in the future of the Saudi economy by supporting start-ups that not only will become financially successful but drive the Kingdom's economy forward.


 



Majed Alarji is the Chief Financial Officer of Wa'ed.

In essence, Wa'ed is investing in Saudi's future, and we are betting that future is going to be bright, as our economy grows and diversifies, and provides opportunity for all.

Based on Wa'ed's recent financial performance, a challenging period influenced by the COVID pandemic, this strategy of catalyzing Saudi's future is producing a healthy return. The value of companies in Wa'ed's venture capital portfolio -- there were 31 VC firms as of June -- increased 39 percent to 233 million SAR during 2020. That includes a fair market value increase of 78 million SAR over the 155 million SAR in Wa'ed's original disbursements.

Similarly, the value of Wa'ed's loan portfolio rose 16 percent to 68 million SAR during 2020. The increase included 32 million SAR in new loan disbursements and 11 million SAR in collections.

Viewed on a micro level, these gains are the market's momentary endorsement of Wa'ed's ability to identify and financially back successful, growing start-ups -- which is not the norm in the entrepreneur's world.

The gains are also confirmation of Wa'ed's ability to select Saudi start-ups who will receive and repay our no-collateral loans -- the only non-collateral form of lending available in the Kingdom to start-ups.

While these gains in financial numbers are a testament to Wa'ed's investment selection processes, our performance also benefits from our improving financial management practices, which make Wa'ed efficient and financially stronger.

The professionals in Wa'ed's Finance team provide a complete stewardship for Aramco's entrepreneurship arm from finance and accounting functions to planning and performance management to treasury and cash management.

Our financial reporting is done in house, and we are constantly improving our practices to meet Aramco's demanding best-in-class global standards.

 




Shariq Rehman is head of Wa'ed's Strategy, Governance, Risk and Compliance team

The team manages Wa’ed’s cash to ensure that invoices are paid timely and entrepreneurs receive disbursements as soon as possible. The Finance team also provides quarterly financial updates to the Wa’ed Board of Directors and assists with preparing Board meeting presentations.

With the Board, the Finance team works closely with Wa'ed's Planning and Performance Management team and Wa'ed's Strategy, Governance, Risk and Compliance teams to oversee reporting to the Wa’ed Board and the regular financial reporting to Aramco, including quarterly, mid-year and year-end accountability presentations.

The team headed by my colleague Shariq Rehman, the Head of Wa'ed's Strategy, Governance, Risk and Compliance team, is one of our key partners. Shariq is also the CFO of Wa'ed Ventures, and together with our other colleagues at Wa'ed, we are working to make sure the Kingdom continues to profit from its own bright future.