Mazin S. Al-Naamani, Portfolio Impact Lead, shares insights on how IDO Investments is bringing in new age solutions and fostering a knowledge based economy to Oman. Mayank Singh reports
Can you give us a brief background of IDO Investments?
IDO Investments was established three years ago to support the growth of a knowledge based economy in the Sultanate. Our founders include notable institutions and organisations like the State General Reserve Fund (SGRF), Omantel, Oman Oil Company (OOC) and The Research Council (TRC). IDO Investments is the Sultanate’s first strategic Venture Capital Fund which looks at providing solutions to the unique business challenges that we have in Oman, as well as aid Omani startups with scalable potential to compete in global markets. To date, our portfolio comprises of eleven investments and we expect to close a few more by the end of 2019. The four founding partners have invested RO50mn (US$130mn) in IDO as the paid up capital and aim to enhance value by plugging in the startups to the partners’ core businesses and create synergies. Overall, IDO Investments primarily focus on life sciences, energy and water, food and agriculture sectors as well as other related technologies with the aim of delivering tangible benefits to Oman.
How does IDO Investments go about selecting companies in which to invest?
At IDO Investments we pursue a two-pronged investment strategy – one is a top down approach wherein we look at key challenges facing Oman and ways in which startups can help in addressing such issues. For instance, in the healthcare sector, our interactions with government, key stakeholders and research showed that obesity, diabetes, hypertension and cancer are major public health concerns in Oman. Therefore, we look at companies which are working on developing treatments for such diseases using technology, artificial intelligence and new age solutions. Keeping this objective in mind we have made investments in companies like Fractyl which is developing non-invasive curative therapies for metabolic diseases such as type-2 diabetes, as well as, Allurion which developed an Elipse balloon weight loss programme capable of addressing the obesity epidemic.
We take considerable means in identifying companies which are working on some of Oman’s key challenges and then work with them to generate solutions. To cite another example – we have invested in a company called Locum’s Nest which is an online platform that connects locums with temporary posts/vacancies in the National Health Service. The app helps hospitals to digitise their staff requirements using the company’s ‘Nest’ technology. The solution cuts out “middle-men” agencies and vendors leading to considerable cost savings and better quality of service to the healthcare system. We believe that the solution can have a significant impact on filling healthcare gaps in the Sultanate as well as knowledge exchange and training opportunities with the NHS UK.
The second approach is the vanilla private equity model, wherein IDO invests in companies that have a potential of high financial return. Here too, we try and identify start-ups that are operating in markets which are facing similar challenges like those of Oman. This is done with a view to take Omani start-ups to these markets and the world.
How do you insure that the benefits of a technology, product or solution gets implemented in Oman in line with IDO Investments larger goal of benefiting Oman?
Through IDO’s investments, TRC can expand their access to world-class research and educational institutes. For SGRF, creating wealth for future generations is essential, and IDO can act as a supporter in that mission. Oman Oil Company can get cutting edge technology related to the oil & gas industry, whilst for Omantel, IDO can facilitate Omantel’s drive towards digitalisation and technology transfer both in the B2C and B2B space. Moreover, there are multiple ways we can enhance the local impact of our investments. One approach is by using a licensing model, wherein we can start using the patented product or solution owned by the said company in Oman, right after we have invested in it. For example, Allurion’s Elipse balloon weight loss programme is being offered to patients through multiple hospitals in Oman, with more than 150 of these programmes having been used by patients with good results to date.
Has IDO Investments taken a stake in any Omani start-up company till now?
Yes, we have invested in a company called iNNOVATEQ which is a spin-off company of Petroleum Development Oman’s digital transformation programme. The company uses an IoT digital solution which allows PDO to cut and reduce downtime and maintenance costs significantly. The solution, otherwise known as ‘Nibras’ is not only applicable to Oman but is also applicable to a multitude of other geographies. iNNOVATEQ is exploring a few other international locations. This is a successful example of how IDO Investments is helping Omani startups to explore broader horizons.
How has your portfolio’s performance been and are the founding partners looking at increasing IDO’s capital base?
We have a good portfolio and a number of companies have already been able to raise subsequent funding from other parties, reflecting their strength and growth. A few of the startups have an IPO coming in the medium horizon; creating an attractive financial potential for IDO. Depending on the progress made by IDO during the next year, the shareholders will take a decision on additional paid up capital.
Can you give us insights into IDO’s investment strategy?
Like most VC funds we are trying to deploy most of our capital in the first three to five years. This gives enough time for the investments to grow. On the other side, we look to empower founders by taking minority stakes in companies, typically, not exceeding 30 per cent, yet ensuring IDO gets voting rights, which helps us in voicing our interests and building bridges between startups and Oman. Overall, we endeavor to empower startups in their drive to excel without diluting their value proposition. As a VC fund, we try and mix up the stages of our investment. Usually startups go through three stages in their business cycle – early stage, growth and later stage, apart from pre-seed to the seed phases. We invest in companies while they are gaining traction and are scaling up in their quest to go global. We see a number of Omani startups that meet this criterion and this is a good sign.
Give us a brief on IDO Investments team and your expansion plans?
We are an eleven member team, out of which ten are Omanis drawn from diverse backgrounds and disciplines like finance, business, engineering, genetics, bio-chemistry etc. As IDO Investments grows in the coming years, we expect the size of our team to expand gradually.