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Backing Breakthroughs: Inside Aramco Ventures’ Investment Strategy
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00:01Hello everybody, how is everybody doing? Friday afternoon, a bit tired maybe, long couple of days, very nice that you
00:11still made it, came around here to us to join us today for presenting Aramco Ventures.
00:16My name is Lisa Schneider, I've been with Aramco Ventures for about two years now, and I'm here today with
00:21my colleague Simone.
00:23Hello everyone, my name is Simone, I joined Aramco Ventures also a couple of years ago, about the same time
00:30as Lisa, and coming from Aramco, I spent 15 hot summers in Saudi Arabia, before deciding to move to the
00:43Ventures team in London, and here we are, we're going to tell you a little bit about what we do
00:49and how we work.
00:50So Aramco Ventures, who of you is already familiar with Aramco or with Aramco Ventures? Could I give a raise
00:58of hands?
00:59Well that's a couple, that's a couple, so you'll definitely know more about us later on today, so that's why
01:06we're here.
01:08Basically, Aramco Ventures is the corporate venture capital arm of Saudi Aramco. So Aramco is one of the major oil
01:16and gas companies based in the Middle East, and they have set up quite substantial funds actually to invest in
01:22startups across different stages, across different sectors and categories, and we're going to tell you more about what that exactly
01:29means and what they're exactly investing in.
01:31So in total, we have 7 billion asset under management, so 7 billion to put into startups, and that is
01:37kind of across three main categories.
01:39So we have strategic venturing. Strategic venturing means that we invest in companies and technologies that we can then afterwards
01:45deploy at Aramco for different reasons.
01:48Could be for sustainability purposes, could be to make the organization a bit more efficient, but basically to work together
01:54with Aramco.
01:55The second one is Prosperity 7. This is more like a diversification fund. Here, we invest in everything outside of
02:02the energy space, from semiconductors to AI over medtech and life science, but everything I can think about.
02:08And here we got 3 billion dedicated to these areas. And last but not least, we have the late stage
02:13venture fund.
02:14So imagine your company, you're very early stage, you get an investment, but of course you want to grow. So
02:19you need to grow at that point, and you need a lot of capital, and that's why we got a
02:22late stage growth fund as well.
02:24So 2 billion for that to really grow companies that Aramco collaborates with.
02:30But these are a lot of keywords, of course, and what's behind it is actually a very diverse and global
02:36team.
02:37So we are more than 100 employees worldwide. Simone and I were actually coming from the European office, so we're
02:43based in London, but we do have a team in the US.
02:47We do have a team in Dharan, where we actually have our headquarter, and we also have teams in China
02:52and in India.
02:54We also actually have more than 10 nationalities. As you can imagine, even in our European office, we actually already
02:59have more than six different nationalities, so globally, quite a diverse team as well.
03:07So what makes us special, Simone?
03:09Yeah, there is a number of features that give to our venturing platform its own identity.
03:18I'm not going to maybe go through all of these reading bullet points, but let me maybe focus on those
03:25aspects that are more relevant.
03:27First thing to say is that across our funds, Aramco is the only LP, so Aramco only puts the capital,
03:36which means that there is no real time pressure, not as it happens in other funds, for example,
03:44which means that we can give the startup the time to develop, and particularly in sustainability, where also the legislative
03:55environment is important, we can also have less pressure on having, for example, to exit.
04:05We have an investment team with a quite diversified background, Lisa has more of a management finance background, I have
04:14a technical background, and it's, I would say, also across the different teams.
04:18Our team in London, the teams in China and the US, you get this mix of people with a more
04:25either economics or financial background, and some technical background, with maybe PhD and so on.
04:34We are investing at different stages, despite the size of the funds, Lisa mentioned before, 7 billion assets under management,
04:44but we do include seed, which means we can go down,
04:48to maybe fraction of a million investment, to maybe fraction of a million investment, that doesn't mean we only do
04:52that, because to cover 7 billion with 500 million checks, we want to create jobs for a generation, but we
05:02like to see a mix,
05:04and we like to bet on very early stage companies with the potential to grow, we like to be present
05:12at the board, we like to follow the company's
05:18that's close. Particularly, we have a team in Iran, as Lisa said before, we have 100 people. Overall, we are
05:27not all investors. There is a good, quite a large crowd in Saudi, dedicated to business development, bringing business to
05:38the companies we invest in.
05:40Also, taking care of the communication between the startups and the business units in Aramco, with the objective to create
05:49opportunities for pilots of different scale.
05:54Could be demonstration pilot, could be first-of-a-kind plans, a little bit larger, so that the startups we
06:02invest in, they have the opportunity to expand, and also at the same time generate value for Aramco.
06:12Technical expertise, mentioned before, something we have within the ventures team, but obviously, we are in close communication with the
06:22business unit in Aramco.
06:25Aramco is a very, very big company with different areas of expertise, both in the downstream, upstream, but also digital,
06:33and many more.
06:35And I'd say, yeah, maybe enough with this part. We generally don't invest alone. We like to be part of
06:47investment consortiums. We do invest quite often with other oil companies, so there is really no competition on the venturing
06:55part.
06:57We do have common investments with, for example, other corporate venture capitals from the oil and gas world, like BP
07:05and Shell. We all invested in OGCI, oil and gas climate initiatives, fund of fund.
07:11But we also like to invest with more traditional VCs, either financial VCs or sustainability, climate tech VC, which is
07:22our focus in Europe.
07:27In Europe, we are focused on climate tech. Our objective is to support Aramco meeting its decarbonization targets. And the
07:44pillars of our sustainability mandate encompass carbon capture.
07:52So decarbonization of Aramco cooperation through different ways. We have done several investments in DAC, direct air capture. We have
08:03investment also in endpoint source to decarbonize industry at the chimney level.
08:11We are looking at natural base solution, big projects in Saudi Arabia involving mangrove. But also, this is something that
08:22is of interest to the company, the kingdom at large. So it's also our area of focus.
08:30We look at low carbon fuel business, starting from hydrogen and then down to its derivatives. We have interest in
08:40ammonia, methanol, all the green fuels, particularly soft.
08:44And maybe we can make some examples later on of companies we invested in. New energy businesses include renewables. Obviously,
08:53Saudi Arabia, for an obvious reason, climate related, very strong on onshore solar.
09:01So there is space, sun, and so that puts solar advantage compared to other maybe other form or renewables that
09:15are more typical in the north of Europe, for example, offshore wind.
09:19This is something that is something that is not a perfect fit for Saudi. So as a corporate venture capital
09:26arm, look at the other synergy with Aramco and Saudi Arabia.
09:33We look at new materials as well, carbon materials, composites. We look at, obviously, energy storage to combine with the
09:45renewables.
09:46And in general, everything that is disruptive in the energy world.
09:54Just a few examples here. I promise I won't go into the details of all of them.
10:00But maybe one example per category. We have one investment in the US called Rondo.
10:06It's an energy storage company storing heat, which is obviously very synergistic in a country like Saudi Arabia.
10:19Carbon capture, two investments done actually from our portfolio.
10:27One is carbon clean, which is a point source carbon capture, but also Kaneo.
10:32It's a recent investment. They were here, I think this week, I think Wednesday and Thursday.
10:38They are a direct air capture company from Germany. Very innovative, very driven team.
10:44They are doing, we invested in them at seed stage. They are doing very, very good progress.
10:51From the low carbon fuels, we have one investment in OXCCO.
10:55It's a company that produces sustainable aviation fuel using green hydrogen and CO2 to produce fuel for aviation in a
11:07single step.
11:08So with no emission. And maybe one more example that I can make.
11:14And maybe if there is time at the end, Lisa can add on it.
11:19Under the material category, Prometeum particles, they develop a metal organic framework.
11:25A new class of solid material with different application from spanning from carbon capture to retrieval of water from the
11:36atmosphere.
11:37So different application depending on the use case.
11:43Yeah, and maybe before I continue with the industrial fund, which is also part of the strategic fund.
11:49So the way that it would usually work is, so just to give you like a practical example from like
11:54an investment perspective.
11:55So we go to a conference like that in Europe, in France. We see a lot of startups and companies
12:00here.
12:01We have a look. We know, okay, these are the areas that we invest in, like the ones that Simona
12:05has just presented.
12:06We get in touch with the companies. We have a discussion and then we really check, okay, what is the
12:10potential of deploying your technology with Aramco?
12:13So we make kind of like a business plan basically for the company.
12:17Let's say in the sustainability space, how much emission reduction could be achieved or what could be an efficiency gain
12:23if we deploy this technology.
12:25And then we bring this to our investment committee.
12:27So our investment committee basically consists of the heads of our regions and of our management in Aramco Ventures.
12:33And for bigger ticket size, so for larger investments, we also have the CTO of Aramco in our board and
12:39our investment committee.
12:41And we basically present that idea to the committee.
12:43And if they agree to the case, if they like the case, then we get an agreement and we invest
12:49a certain amount of capital to the company.
12:52And then we start continuing working with the company from a business development perspective.
12:56So we facilitate the connection to Aramco, but also to the broader region, right?
13:01I mean, Aramco is not a single company in Saudi.
13:04They're also very well connected in the whole Middle East region.
13:07And also, you probably all know about the project Neom, which is also taking place in Saudi Arabia.
13:12So there's a lot of opportunities that the companies basically get from Aramco in investing in a company and a
13:17startup at the early stage.
13:19Because it's the network, as Simona has explained earlier on, it's the business development opportunity.
13:23And I think this is something that really differentiates us from other funds that are purely financially driven.
13:28And on the industrial fund, it's basically the same.
13:31It's also part of the strategic fund, meaning that we also look for a strategic buy-in of Aramco to
13:36invest in a case.
13:37But it's more on the industrial and more on the digital side of things.
13:40So what does it actually mean?
13:43So we look at different technical solutions to make the different operations of Aramco more efficient.
13:48So we look at upstream and downstream activities and businesses of Aramco and see, okay, how can we apply technology
13:53to different kind of areas?
13:56Let's say, for example, cybersecurity, that's a big topic for Aramco, or supply chain management.
14:01And then we see, okay, which companies can help Aramco to get better in these areas.
14:07And just to give you an example of that, I just mentioned cybersecurity just now.
14:11We quite recently did an investment in Immersive Lab.
14:13That's a cybersecurity training platform.
14:17And through a gamified way, employees can learn about cybersecurity and they have a massive accumulation of knowledge on cybersecurity.
14:24So cyber professionals who then train basically people on different areas and different departments of Aramco.
14:32And so we facilitate this connection, we support the company in generating basically more commercial pipeline.
14:40And they obviously have the adventure of having us as an investor, but also as a customer.
14:44But we also do other things.
14:46So you see different applications when it comes to robotics.
14:49So for example, autonomous robotic solutions for like very remote areas where you need to do like some sort of
14:54monitoring.
14:56But also everything in other areas like additive manufacturing, AI, analysis topics, everything that you know a big industrial organization
15:03has and can make more digital.
15:07Also a couple of examples from our upstream portfolio.
15:10But yeah, I think the classical areas of upstream as you probably know and drilling production, but also digital enablement.
15:17Again, how can we make that better?
15:20And on the downstream side, so you have a classical example here would be like corrosion monitoring of like pipes.
15:26So you get like various pipe systems, especially Middle East, you got very harsh weather conditions.
15:30So how can you basically make sure that they that they stay intact?
15:34And these topics might sound boring sometimes, you know, you see all of these like crazy AI ideas that are
15:41also walking around.
15:42But actually, there's massive markets in like corrosion monitoring of pipes.
15:45And I'm not just trying to sell this, but it's actually really interesting space.
15:51And then last but not least, we also have some overlaps, of course, with the sustainability portfolio.
15:56So chemicals, materials and non-metallics, everything that you basically require also for the energy transition.
16:03So just to give another example, I mean, Simone mentioned Promethean Particles.
16:07That's a company that's based in the UK.
16:09What they basically can do is to produce these new sort of materials called metal organic frameworks in a very,
16:15very cost efficient way.
16:16So it's very cheap, very good quality, and they can scale them.
16:19So in these materials, they can be used, for example, in carbon capture systems, because they basically absorb the CO2
16:25from the air.
16:26But they can also be used in other sorts of applications, could be used, for example, in gas storage, they
16:30could be used for water harvesting.
16:32So a lot of different applications, kind of like a magic material.
16:36But yeah, very promising on the chemical and material side, but of course, also on the sustainability side.
16:44Okay, then we have the second fund, which is, sorry, not fund, the second kind of big area, which is
16:52the non-strategic area.
16:53And I think Simone will talk more about that.
16:55Yes, I can try to tell you a little bit more about Prosperity 7.
17:01The geographical focus of Prosperity 7 at the moment has been mostly towards the US and China.
17:11Less so in Europe, although things might change in the future.
17:15I will try to touch on the main characteristics of this vehicle that we have.
17:21I might not be as detailed as I was on the sustainability front.
17:25That is our bread and butter in Europe.
17:28But I'll try to give you an idea.
17:31So as Lisa mentioned, this is not a vehicle that looks at strategic synergies, at least not as a priority.
17:41But it's looking for diversification opportunities for Aramco.
17:46So it's a vehicle that has some similarity with the strategic funding in terms of, for example, we look at
17:58the minority investment.
18:00The check size, it's similar in some way.
18:06But the primary criteria include looking at disruptive technologies in whatever area.
18:15We will look exactly what are the areas that are of main interest for Aramco and the diversification of the
18:21industry going beyond oil and gas in the future.
18:24Scalable, so the potential to grow as very large businesses and the resiliency.
18:36If you look at this portfolio, you'll see that it's already made of 60 companies.
18:46So quite a big portfolio, including a lot of the companies that are here today work, I would say, in
18:57similar sectors.
18:58So cloud, AI and data and deep tech are definitely big pillars.
19:03Medtech, sometimes intertangled with the AI again.
19:10Robotics, possibly not the strategic part.
19:14So Lisa mentioned before, we have robotics investment within the strategic vehicles.
19:22And those are, for example, robots for maintenance and inspection.
19:26When there is no clear strategic synergy, then the vehicle would be Prosperity 7.
19:34Mobility, it's another pillar.
19:39And then cybersecurity, Aramco as other measure is subject to probably thousands of cyberattacks every day.
19:50So this has been for years a very, very strong pillar for Aramco and the venturing arm does its part
20:00to find the best startups in the area.
20:04Blockchain, e-commerce on the kind of downstream side and food tech as well.
20:15Now we conclude with the affiliate programs.
20:18Yeah, so if you came across the region, you probably heard about a lot of different funds already.
20:24So there's a lot of investment activity actually going on in the MENA region.
20:27And we just want to give you some examples because there's a lot of activity and sometimes it might be
20:32hard to understand who's actually doing what.
20:35So you now know a little bit more about Aramco Ventures.
20:38These are some other programs.
20:40So the first one is climate investment.
20:42That is basically a conglomerate of different energy companies who come together to invest also globally into sustainability topics.
20:51So because, I mean, Simona mentioned earlier on, we invest or co-invest also with other energy companies because these
20:57problems that we are addressing, they are global and they apply to all of us.
21:01And I mean, there's really like a lot of capital and effort behind pushing these ideas forward and also doing
21:06it jointly because if you want to create new markets and grow it, then you can't do it alone, right?
21:11You have to work together.
21:13So Aramco Ventures put 150 million into that fund, into this opportunity.
21:17And they are also active around Europe.
21:19So you might come across them.
21:20The second one is Sarvik.
21:22So Sarvik, a chemistry company basically working very closely with Aramco.
21:26Aramco owns a share of it.
21:27And they do invest in a lot of the downstream activities.
21:31So since we kind of work very closely together, it's quite a nice syndicate for companies, for example, that work
21:38in CO2 conversion into new sorts of products, for example.
21:42So that's a great opportunity.
21:44And then last one, we have Vite, which is basically responsible for economic development in the MENA region.
21:50So their investment scope is mainly in the MENA region.
21:53So you might come across them as well, sometimes in other European countries, for example, or in the US.
21:59But the main investment scope is in the Middle East.
22:03And yeah, I think with this, we're already finishing our presentation.
22:07So thank you very much for joining us today.
22:09And if you're a startup with an interesting company, you feel like you might fit in one of the hundred
22:14categories that we've just presented, then please come to us.
22:17We're over in hole two, the small one without the air conditioning.
22:19So it's really hot in there. The topics we discuss are hot as well.
22:22So come over and join us and we can have an in-depth discussion.
22:26Thank you.
22:27Thank you.
22:28Don't go away yet.
22:29We'll do a couple of questions.
22:30I think that'd be nice from the audience.
22:33Actually, I have a question for you.
22:34So it's a great presentation.
22:36I have the feeling you've just pitched us like a hundred companies, you know.
22:40So if I understand correctly, you're kind of a VC level investment fund, right?
22:45Okay.
22:46So you look at these, these are late stage startups.
22:48People have already raised money elsewhere.
22:52What gives you the competitive edge as a choice of VC compared to your competitors?
22:57That's a question that came to my mind.
22:59Yeah.
22:59Maybe I can say one.
23:01I would say the possibility to avail the resources to help a startup to deploy at different stages.
23:12Okay.
23:12Pilot, so small to larger, I think is one of the key advantages that we have.
23:21because we have a very strong industrial infrastructure where the startup can just plug and play a solution
23:29that will be chosen already with in mind a potential application because it's a strategic fund.
23:37So there is going to be the conditions for the startup to develop its business.
23:43Maybe, you know, have the first revenues, demonstrate at the same time, and then expand.
23:51Okay.
23:51Any companies that you two are particularly excited about in the fund or you can talk about or give any
23:57preference or maybe you can't?
23:58I think I kind of already gave my preference.
24:00So Promethean Particles, I think it's quite exciting because you got a material tech platform that you could use for
24:05a lot of different applications.
24:07And they're starting with biogas upgrading, going into carbon capture, and then you can take it from there, basically.
24:12So it's a platform that has massive potential.
24:15And I know that you have other favorite companies, but this is definitely my favorite company.
24:19Yeah, yeah.
24:19I mean, we tend, for some reason, we are humans, so we tend to favor the companies that we bring
24:25along the investment journey.
24:29Yeah.
24:30So I mentioned a direct air capture company from Germany that I worked on.
24:34But I would say companies in the field of sustainable aviation fuel are very interesting.
24:43There's a lot of debate on the cost of fuels and the alternatives.
24:48Yes.
24:49But aviation is a very tricky business where obviously very, very regulated, very safety conscious.
24:59We have heard of the accident just yesterday.
25:04And we're in a very key transition phase as well.
25:06Yeah.
25:06So that is an interesting space.
25:10And obviously, not just a ramp hole.
25:13Our companies are looking at opportunities and technologies to try to find an alternative to fossil fuel based.
25:23Yeah.
25:24Yeah, I feel like all of the areas are very interesting.
25:27I guess that's also what's so exciting about this job is that you're always at the edge of what's being
25:31developed.
25:31So whether it's on the AI side or on the sustainability side for us, but you're always like, you're seeing
25:36what's happening.
25:37And while you watch the news and see what's being claimed, what's being developed, you see what is the reality.
25:42And you can always like touch base and see, okay, where is this heading?
25:44And you can be part of shaping where everything is heading, which is really exciting.
25:49Great, great stuff.
25:50Any questions from the audience quickly?
25:52No, you've got to go.
25:54Okay.
25:54Well, then we'll leave it there.
25:56That's good.
25:56Ladies and gentlemen, Aramco.
25:58Thank you.
25:58Thank you very much.
26:00Thanks.
26:01Pleasure.
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