Bootstrapping to Exit from Saudi Arabia: Emad Daghreri, Co-Founder CEO of Autobia (Part 6)

Sramana Mitra: So, Emad, I’m going to try to synthesize all the things that you said into something that people can understand better. What I’m hearing is that in 2019 when you started restructuring the company, you created platforms for doing not only competitions and engagement but also event management and grant management.

So there are different ways of engagement for the government to engage with the public, and each of those had their own government projects, and different agencies in the government were using them. You were consulting to get the agencies trained in using them, and then they were taking over and using those products and running those products. So you productized different modules of these functions, yes?

Emad Daghreri: Yes, exactly.

Sramana Mitra: So this is the business that you built from 2019 onwards?

Emad Daghreri: True, correct.

Sramana Mitra: How did the revenue build-up happen from the 2019 onwards time frame?

Emad Daghreri: Since we’d created all of those different frameworks, we started to have this framework agreement with the government. It’s like we sell a catalogue of services that contain software, project management, engagement, third party, and all the things they want. We started to sign mega frameworks with them so they have the freedom to pick and match whatever they want based on the event or project they want to do. The cycle would be longer if they do it the traditional way, so we had to think of a medium to agree for both sides that will help the government be agile and will help us have the right pricing for them. Usually the framework agreement is higher in volume. We are talking about $10 million and above on a framework that can last for one, two or even three years.

Because of that relationship, we started to sell professional services like consultation. Usually, they’d have a high level consultation framework from the Big Four, but they need to cascade those bigger projects to small pieces contained in a project that will last for two or three months rather than having this long-term vision. TAM was mastering zooming in and creating a specific, smaller project aligned to the bigger vision.

Since the project became huge, we had to be involved in two main roles. The first one was managing third parties for them. So, we started to act as the third party manager for the government as well as educational institutes and technology companies from the outside. If we needed a specific product that we do not offer, we can bring it in from outside and localize it for them. Since we lack the infrastructure for some of the basics, we need help from third parties to transfer the knowledge to Saudi; then they can take over, and grow the foundation.

One of the biggest categories we are in now is the marketing, because engagement needs marketing. We started to do these marketing agencies to have the right messaging and manage the social network. We linked all of that under one technology umbrella as TAM. We can report the metrics for the management through a dashboard. All that ecosystem is happening because you have this mega project. We pivoted from technology company at the beginning to an enterprise that provides a 360 degree solution public engagement.

Sramana Mitra: What year did you go public?

Emad Daghreri: I think it’s been almost a year. We went public in July last year.

Sramana Mitra: So between 2019 and 2023, what kind of revenue level did you reach to go public what number did you go to go public with?

Emad Daghreri: I think we started to hit $40 million a year, and it was growing by 30%-40% year after year until we did the IPO.

Sramana Mitra: Is this $40 million recognized revenue or $40 million worth of contracts? You were doing multi multi-year deals, so from a public market perspective, is that $40 million of contract value or is it $40 million per year of revenue?

Emad Daghreri: No, it’s $40 million per year of revenue because we report that we signed the contract, but we only report what we invoice from that specific contract.

Sramana Mitra: So, this is a Saudi market IPO?

Emad Daghreri: Yes. In Saudi, we have two markets – Tadawul and the Parallel Market, Nomu. Usually, Nomu market is for companies under the one billion valuation. Once you cross one billion in valuation, you are able to go to the Tadawul market, which has less regulations, ensuring that companies can have some kind of exit. One of the problems in Saudi is we don’t have this proper infrastructure that helps companies to exit rather than going to the Tadawul market. Tadawul is the bigger market; it’s really rare for companies to go there. We don’t have that much acquisitions and merger happening in the ecosystem. So the government decided to do this Parallel Market called Nomu to help companies to exit faster.

People can trade the shares until they can reach a bigger level, and they can go to the Tadawul market. However, from the technical point of view, anyone can go and see all the companies in one place, and they can trade immediately without the specification of the two markets.

This segment is part 6 in the series : Bootstrapping to Exit from Saudi Arabia: Emad Daghreri, Co-Founder CEO of Autobia
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