Khwarizmi Ventures Managing Partner Abdulaziz Al-Turki on what Saudi Arabia offers for the startup ecosystem

Khwarizmi Ventures, an early-stage fund investing in startups across the MENA (Middle East and North African) region, has so far backed 27 startups. Founded in 2021, the fund already has had three exits. 

In a conversation with YourStory Gulf, Abdulaziz Al-Turki, Managing Partner of Khwarizmi Ventures talks about the fund thesis, investments, and future plans. Abdulaziz has held several senior management and leadership meetings for the likes of McKinsey and Company subsidiary Elixir Management Consulting, SABIC (Saudi Basic Industries Corporation) and others. 

Abdulaziz has a degree in Electrical Engineering from the University of Maryland and is an MBA from the London Business School.

Edited excerpts: 

YourStory Gulf (YS Gulf): Tell us about Khwarizmi Ventures? 

Abdulaziz Al-Turki (AAT): Khwarizmi Ventures is a Saudi Arabia-based fund. Our fund is $70 million and we invest in Seed and Series A stages, with few exceptions in Pre-Seed. We invest in MENA and Pakistan regions. We enter with the first cheque of $500,000 and invest up to $2 million. And close to half our fund is focussed on follow on investments. 

Our Limited Partners (LPs) are a group of high-net-worth individuals and family offices in Saudi Arabia.

Today, we are in a great position and time, where Saudi as a region is experiencing great changes in different aspects both in the public and private sectors.

We have seen an upward trend for the past five years, and venture capital and startups are definitely leading sectors in those changes. There has been a clear increase in activities in VCs and in the number of startups not just in Saudi, but across the region. 

There has also been an increase in funding and government support to the sector, either from regulation or from even injecting capitals to the funds. 

It therefore became the right time to invest in the region. We look at capturing and enabling startups and the founders. Today, we see a large number of people opting to startup. We have over 27 portfolio companies, and almost all of them are first time founders. And we are part of this journey with them to help enable and grow the ecosystem. 

YS Gulf: What do you look for in a founder before investing in the startup? 

AAT: We look at what you would call as bright, ambitious, and resilient founders, who are trying to solve problems and capture more opportunities in large markets. 

We are sector agnostic, and invest in fintech, ecommerce, logistics, B2B (business-to-business) SaaS (Software-as-a-Service), foodtech, and possibly any tech-enabled business. They should just be strong and scalable. 

YS Gulf: What should the founders keep in mind while pitching to you? 

AAT: More than the pitching, it is more about what they have done with the business before they actually pitch. This displays their ability to execute, ability to build a strong team, and this isn’t just the founding team, but also the second layer. 

And does the founder’s vision cascade to the whole team? Another important factor is the sector that they pick, is it promising and does it have large enough problem to be addressed and solved for. 

YS Gulf: What are the top challenges faced by the startup ecosystem in MENA?

AAT: I think it is natural that the ecosystem today is facing a lack of startup founder experience. This is also true for the VCs. We are in our nascent stages, and time on its own will solve for this problem. There will be flywheel of experienced companies, and experienced people starting their own companies. We are in the early stages, so we are therefore also very excited to create a new path forward. 

This is our first fund, and it has been a little bit over than a year since closing of the fund, and we have been active with deals. We look forward to continuing our investments and support for our portfolio companies we enter. We have other funds that will soon follow. 

YS Gulf: What advice would you give founders today? 

AAT: I think one of the biggest things that determine the success or failure of a company is the ability to build a right team. It is important to establish right functions early own. 

The common factor for successful companies has been solid teams and healthy culture, and this in turn encourages others to join them. Founders thus should surround themselves with people who are smart and have the right culture.