The move stems from a recent initiative by the Indian Saudi Council, which had a first round of meeting in New Delhi recently. We have proposed to establish a Saudi-Indian ICT fund to pursue investments in Saudi Arabia and India and open opportunities for cooperation between Indian and Saudi ICT companies, Abdul Aziz Abdul Latif Bakr Jazzaar, executive partner, Malaz Group, engaged in venture capital investments in IT companies, said.
Jazzaar was in Hyderabad leading a Saudi Arabian ICT delegation for an interactive session here, organised by APITCO and Ficci. The proposed fund will be set up on the lines of the Malaysian fund wherein the Malaysian government has put in $50 million and the rest by private sector from the Middle East, he said.
According to him, factors that may work as growth drivers for the ICT sector include substantial demand for existing innovative services and applications, a market regulator that encourages competition and introduces innovative services, increased private and public sector spending on technology, and a public equity market with at least 40 IPOs within the next 24 months. Interestingly, Saudi Arabia is the largest telecom market in the Middle East and is estimated to touch $11.4 billion in 2008 from the present $8.4 billion involving both voice and data. The total IT services market is estimated to be $869 million by 2008, driven by IT outsourcing and custom application development. The Saudi IT market is poised to grow to $5.7 billion by 2008.The other factors which are driving this growth in Saudi Arabia areone million PC initiative (reduced price with easy payments for citizens), development of King Abdullah Economical City and King Abdullah Financial Center in Riyadh, and an e-government initiative for three ICT and hi-tech parks to begin operations from 2008, he informed. The fund will help in establishing specialised institutes and invite the Indian side to establish an institute in Saudi in the ICT technologies relevant to Indian ICT sector.
Meanwhile, the Malaz group of Saudi Arabia, is eyeing Indian venture capital companies to co-invest with local companies, with a fund of 100 million Riyals. Incidentally, the group will also be managing a private sector fund worth $100 million which is sponsored by the Saudi Arabian General Investment Authority.
Partners In Growth
The exclusive Saudi Arabia-India ICT fund size is estimated to be close to $100 million