JD Durkin: This week, we are bringing you ongoing coverage from Money20/20 in Riyadh. Now, take a look at one of our recent interviews from the fintech event in the Middle East. Take a look.
Dalia Kamar: Hi, and welcome to another segment of Taking Stock. I’m Dalia Kamar, Head of Investor and Startup Programs at Money20/20 Global, and I’m joined here in the Middle East with Armineh Baghoomian, Managing Director, Head of EMEA and Co-Head of Global Fintech at Partners for Growth. Welcome, Armineh.
Armineh Baghoomian: Thank you.
Dalia Kamar: And you are no stranger to the region. I think you probably came here, you know, earlier than most people even thought there was an ecosystem. So tell me more about that journey of finding these hidden gems and what attracted a global entity like Partners for Growth to have a very early strategy here?
Armineh Baghoomian: Sure. Thank you for having me. Anything for you.
So what our DNA is, and has consistently been, is focusing on underserved markets and sectors, ecosystems, et cetera. So people tend to come to us with deals when it’s a relatively new geography.
And we were fortunate enough to have that introduction in 2019. There were some regulatory changes and laws that were put in place in the 2018 timeframe that had lenders like us look at opportunities in the region.
So that framework was put in place. There’s rule of law. There’s a good ecosystem. The ecosystem for entrepreneurs is very strong, and the equity investors are very strong. So that kind of magic all came together, and we started seeing some really good deals.
Trukker was our first. We then did Wizz Air and Tabby, and on and on and on. It’s been really, really rewarding.
Dalia Kamar: So some clear winners that you’ve mentioned here, and I’m sure at the time it wasn’t as clear.
Armineh Baghoomian: Yeah.
Dalia Kamar: Now you’ve trekked from California to the GCC, I think, more times than most people spend time here. What about the founder makes you think, you know, they might not be profitable, but I’m willing to lend them? And what are some clear red flags for you?
Armineh Baghoomian: Yeah. So most of the companies we work with globally are not profitable day one, but they have a path to profitability, and a pretty quick one we can see, right? We don’t fund for very long.
And the other piece that’s important is that we’re mostly asset-backed. So we’re looking for discrete assets. Those can be receivables or hard assets that we can finance separately, and then we structure around that.
So those dynamics all existed. The entrepreneurs are hungry. They want to find solutions. There’s an ecosystem that needs these solutions, right? It’s a very young population. It’s digital-forward. And so they’re finding all these gaps and filling them with ideas that we’ve seen elsewhere. We know how to finance, and so we’re happy to kind of lean in and know how to finance.
Dalia Kamar: Indeed, Partners for Growth is arguably in most regions in the world. What do you see in those regions that you’re seeing here, and what is unique about this market that makes you so bullish?
Armineh Baghoomian: So the dynamics of having these gaps I just mentioned exist in all these markets, right? There’s always something that’s being ignored. It’s either a population, a product the banks might be ignoring because it’s a small population today or a small product fit today, or it’s a technical solution that’s brand new. And so these gaps exist everywhere.
Here, it’s a bit louder, right? Because everything’s kind of very new. So that’s consistent everywhere.
Then in terms of what we like, it’s all those dynamics. What we see that we are improving, that we’re really excited about, is just the infrastructure to make it more institutional and allow more international investors to come into the market, which is happening.
Dalia Kamar: Thank you so much, Armineh. I think that advice will definitely hold true.
This is Dalia Kamar here at Taking Stock, live from Money20/20 Middle East, and we’ll see you next time.
