“In the last couple of days, we have seen economic activities in the energy sector pick up to their pre COVID numbers in countries where we have portfolio presence including Oman and UAE. We saw the strengths and weaknesses of our regional ecosystem and better understood how pro-business reforms can act under pressure,” remarked Abdullah Al-Shaksy during the interview of his journey as CEO and Co-Founder of Phaze Ventures. The venture capital group and innovation platform aims to transform Oman by unlocking the untapped potential of youth, startups, and corporates in the region. Spearheaded by a deeply collaborative network and technical team, the firm’s focus is on early-stage technology investments that enable innovation through strategic partnerships.
The following interview was made possible through our company’s participation in the Phaze Ventures accelerator program. During this time, our team took its first steps toward international expansion. Specifically, into the hub of oil & gas in the Arabian Gulf region. We were able to meet with the innovation leaders of Petroleum Development Oman (PDO) and successfully identify the perfect spot for PERS deployment. This collaboration marks our first international paid-pilot.
I think it’s quite timely to revisit our origin story and see if we’re still on the track we envisioned. We started Phaze Ventures after me and the partners returned to Oman between roughly 2015 and 2016 after being away for a number of years. At that time in 2015, we were in a very similar situation as we are in today. We were facing the last oil downcycle and it had a very negative impact on the markets here [Oman]. It was particularly difficult for the young population and Omanis coming back from studies or work abroad to find job opportunities. We felt as though this whole cycle of dependence on one part of our economy was seemingly never-ending. We kept hearing about efforts to diversify, efforts to privatize, efforts to enable the business sector, but we never saw it come to fruition. We were tired of talking so we said, “well why don’t we try and do something about it? We have experience and a decent network between us in the government, private sector, business sphere, students, and entrepreneurs.” By 2016, we realized that the underlying hindrance to diversification and enabling the private sector was that the whole startup ecosystem required to build new companies did not exist. That’s where we narrowed our focus and decided to be the first private venture capital firm in the country and that’s how the idea of Phaze Ventures came along.
One of the things that we knew from day one was that the ecosystem needed scale. To achieve scale, we needed to start thinking and functioning as a single market block in order to build businesses that could compete on the global playing field. We needed to give new businesses a starting point where they could achieve that scale regionally first. Due to our small size in terms of population, we needed to work closely with all these other ecosystems. Another factor we considered is that we needed to address problems that were universal and not just local or regional. We needed an ecosystem on which founders could be bold enough to take on a global challenge such as the energy sector or the energy transition. Lastly, we needed everyone from the government and private sector, engineers, and entrepreneurs to be involved. So one of the things we did very early on was approach all the different organizations in the business ecosystem as a whole and start talks on the need for collaboration and support for new businesses by providing them access to local markets before they had to take on a Chinese or American market. We’ve been very collaborative, we want founders like yourself to really be shooting for the stars and I think Eden is in a sector that could be very transformative not just economically but environmentally and socially too.
I can’t even remember what I was thinking about and worrying about in January ’cause those concerns are so far removed from my priorities and concerns today. It feels like a lifetime ago, priorities have shifted, the way we are operating has shifted. Our top priority in the last three months was to double down, spend time with our existing portfolio, triage problems to find funding gaps and most of all, try to make sure our portfolio companies make it through the worst of it so that they can not just survive the day, but ultimately live and thrive another day. In the last couple of days, we have seen economic activities in the energy sector pick up to their pre COVID numbers in countries where we have portfolio presence including Oman and UAE. We saw the strengths and weaknesses of our regional ecosystem and better understood how pro-business reforms can act under pressure. We saw a lot of companies, big and small, go very close to the edge without receiving regulatory or funding of any kind. This was a kind of “stress test” which enabled us to see our peak capacity and limits. The resilience shown by our portfolio companies in these drastic times reassures us that we are on the right track.
We always had a view that a net-zero carbon future was inevitable, but we understood that to achieve this vision, the huge infrastructure of the petrochemical industry needed a massive shift. We had to be realistic to comprehend this multi-trillion dollar industry — an industry that our entire global economy from transport, to plastic, to polymers and chemical derivatives depends on — isn’t just going to go away overnight with a flick of a switch. We realized that timing is everything because people went through this whole cycle maybe 10 to 20 years ago with a huge push for investments into renewables and a lot of people failed. There was a mistake of timing because this is not the software world, this is not Silicon Valley, this concerns hundreds of countries with trillions of dollars of hard assets that need to be converted, replaced, modified and digitized — it’s not going to happen overnight. So, we wanted to build a thesis that would work with where we knew the future is going but also acknowledged the reality of today. We needed to invest in technology that can endure the transition and that’s an interesting line to tread. That means we wanted to focus on companies that were building technologies that had applications that could unlock unrealized potential today as well as tomorrow and 10 years from now. Our thesis, therefore, is to invest in technologies in the energy and logistics sector that can create value now and 10 years from now so that they are both in agreement with the reality of today and where the future is heading: technologies that can facilitate the transition while being functional on both sides.
With all the companies we want to work with, it always comes down to the people involved. It’s a rare breed to find the right people with the right vision and hopefully provide the right support. Our interactions with your team and other stakeholders is what gives us confidence that you have the right teams. We also think that Eden is taking on a valid challenge that needs addressing right now. It could have great potential to change and improve the energy industry and could have a lot of value in the energy transition. You have that combination of team and problem statement to solve and we thought we could be part of that story — be a catalyst to your journey. Additionally, we aren’t just looking for individuals that have the technical skills, being a founder is also about being a communicator: you have to communicate to your team, you have to communicate to your client, you have to communicate to stakeholders, you have to bring people together to solve these problems. We are looking for well-rounded individuals who can solve technical challenges but also bring people together and keep everyone focused through difficult times, ups and downs. Which I guess brings me to the second half of our question: has anything changed in our outlook and enthusiasm about Eden? Definitely not, I think if anything, we are pleased with how you managed through a really difficult time, took that time to put your thinking caps on, and ponder on what you can do productively under all this immense pressure. We were happy to see that you were making the best of that situation.
I got started in the investment world just after the last financial crisis in 2009 and I remember listening to a lot of leaders and one of them coined: “we are into a new normal now get used to it… and build your plans accordingly.” I think back to that when I look at what we are facing today and think how we must accept it as quickly as possible so that we can seize the opportunities based on this “new normal”.
I think the best advice for everyone is to really reflect on how you thought on day one of your journeys, don’t be married to any ideas, let anything and everything of your original ideas of the future go, and rechallenge all those thoughts again. Maybe some of them will be confirmed, great, and maybe some of them will change. Accept and embrace the new normal and in that way, I think the next 10 years could be very prosperous for you.
Check out the Phaze Ventures blog and take a deeper look into what it takes to innovate in Oman.
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