Tech VCs Resort to Party Crashing in Middle East During Downturn - Bloomberg
Silicon Valley has taken investment from moneyed state-run funds in the Middle East for years. Now that the technology industry is mired in a downturn, those relationships are becoming more desirable, and more visible.
In elite tech circles, connections to sovereign wealth funds are suddenly in-demand. Investors including Chamath Palihapitiya and Tribe Capital’s Arjun Sethi have recently been spotted passing through the region. Ben Horowitz spoke at a major Saudi conference late last year. And one person who invests in VC funds said they’d seen multiple newer venture capitalists without an invite frantically trying to get into parties held in the region by United Arab Emirates and Saudi Arabian investors.
The VCs’ desperation, this person said, was poorly perceived by the Mideast investors, who value long-term relationships and were shocked by the party crashers. The person asked not to be identified discussing private information.
Relationships between VCs and their backers are usually private, particularly with overseas funds that value discretion. Some of those ties were made unusually public this spring when the Saudi Arabia Public Investment Fund’s venture arm, Sanabil, took the rare step of listing names of the firms it has backed on its website. The more-than-$600 billion fund disclosed ties to tech’s most elite firms, including Andreessen Horowitz, Sequoia China, Founders Fund and Tiger Global. Tech news site the Information first reported some of the names.
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