Aspiring Sunni entrepreneurs learning to code (photo credit: The Economic Times).
Ryiadh, Saudi Arabia—In a move that is sure to excite Muslim entrepreneurs and rankle others, Saudi crown prince Muhammad bin Salman announced Tuesday that Saudi Arabia would use its oil assets to launch a $1.5 trillion startup fund. The announcement follows a recent commitment to back a $2 trillion sovereign wealth fund.
The KSA’s massive change in economic policy is affirmation that the kingdom is preparing for a future that will eventually bring an end to the petroleum business. With global warming widely accepted as a reality, countries are feeling pressure to abandon burning fossil fuels, including coal. This, along with the rapid growth of electric cars, and depressed oil prices, is pushing Saudi Arabia to be proactive in diversifying its economy.
The startup fund, aptly named “Wahabi Disrupt Fund”, will be the largest fund in the world, easily eclipsing China’s $338 Billion government-backed venture capital fund. According to Deputy Prince Abdul Abdullah VI, the managing partner who oversees the firms deal-flow, "The Wahabi Disrupt Fund focuses on identifying and funding exceptional Muslim male entrepreneurs who are Sunni." He added, “We have so much home grown talent here in the Middle East, and abroad in the UK, France, Belgium, especially in the madrassas. We will, inshallah, empower our most talented Muslims to build inspiring startups that will disrupt the world.”
But not all are as optimistic or excited about mega Saudi dollars being funneled into promising startups. Rival Iran quickly dismissed the fund, releasing a statement that said, “This is yet another attempt by Saudi Arabia to create sectarian friction in the region.” Even harsher language came from President Obama’s deputy national security adviser, David Axelrod, who accused Saudi Arabia to have fueled the rise of Al Qaeda. “A lot of the money, the seed money if you will, for what became Al Qaeda, came out of Saudi Arabia,” he added. Industry watchers are now pointing to ISIS (Daesh) as the latest startup benefiting from Saudi money, via the Wahabi Disrupt Fund.
Asked about the controversy around the startup, Prince Abdul Abdullah VI proudly said, “ISIL is a shining example of the sort of startups we seek to incubate, fund and scale. They have achieved to take over large swaths of land and inspired a generation of young people. Even Facebook, for all its reach and members can't claim this. Simply put, we're looking for disruptive startups that solve large problems and that create a paradigm shift, both on the ground and in your heart.”