Youth driving down the Saudi IT headway

Tom Gara

• Last Updated: May 14. 2009 5:46PM UAE / May 14. 2009 1:46PM GMT

Barig Siraj, the chief executive of ICT Ventures, says Saudi Arabia is at a tipping point, ready to lead the region's IT development. Victoria Hazou for The National

Saudi Arabia, the traditional economic powerhouse of the GCC, is emerging as a major hub for regional start-up technology companies, according to entrepreneurs and investors.

The kingdom and its growing, wealthy and youthful population was the topic of much discussion among technology businesses and venture capitalists at an industry conference this week in Cairo.

“It is the 800-pound gorilla that you want to be able to tackle as an IT company,” said Barig Siraj, the chief executive of ICT Ventures, a technology investment fund based in Riyadh. “It is at the tipping point for electronic commerce. We’re at the point where the digital society, driven by the huge youth population, can monetise the internet.”

ICT Ventures is the first technology fund launched by Malaz Capital, a Saudi investment firm backed by some of the kingdom’s most prominent businessmen and companies, including the Binladin Group, one of the country’s largest conglomerates. The fund has a US$66 million (Dh242.4m) budget to invest in young technology companies looking to expand through the region.

The Saudi government has placed an emphasis on the development of an indigenous technology sector, meaning opportunities in the country are almost endless. It has allocated 8 billion riyals (Dh7.83bn) towards the first five years of a 20-year plan that aims to place the country in the top technological ranks of the industrialised world. Some of that money will fund the country’s 10 new technology incubators, scheduled to open in the next five years.

A further 3bn riyals have been earmarked by the Saudi Arabian Monetary Authority (SAMA) to pay for all government bodies to implement electronic payment systems. Saudi Telecom, the country’s former telecommunications monopoly, has set aside $250m to invest in the commercialisation of academic research. Since a reform of the country’s intellectual property system was completed last year, its researchers have started applying for patents on a large scale. More than 30 patent applications have already been filed so far this year, compared with just three last year.

And while the country’s institutions make massive investments into the nation’s technological economy, entrepreneurs are building websites, portals and forums that are quickly seeing some of the highest traffic in the Arab world.

“It is one of the most dynamic markets on that level and one of the most innovative,” said Majied Qasem, a Jordanian internet entrepreneur. “What I mean by that is that the youth in Saudi Arabia have been very aggressive in going online and hosting their own portals. They have taken the initiative and created some very interesting stuff.”

Mr Qasem runs D1G.com, a popular website for Arabic user-generated content. In the past year, his company has acquired two Saudi websites as part of a push to drive traffic from the GCC’s largest internet market. “While Gulf states make up only 20 per cent of internet users, they make up more than 35 per cent of our traffic,” he said. “And they are the ones that let us monetise that traffic.”

After acquiring the Saudi website Yasater, which specialised in tabloid-style news and gossip, Mr Qasem said he had began to realise the depth and diversity of the Saudi internet community, whose entrepreneurs have kept a far lower profile than others in the region.

“When you look deeper you find more and more success stories,” he said. “But the difference is, they don’t care if somebody writes about them, they don’t care if somebody says they are the greatest. All they care about is how many paying customers they have today – and how many they will have tomorrow.”



tgara@thenational.ae