Ghada Ismail

When most people think about borrowing money, financing a business, or securing an investment, they think of banks. Yet an increasing share of financial activity today takes place outside the traditional banking system.

Private credit funds, fintech lenders, money market funds, and other non-bank institutions are playing a growing role in moving capital across the economy. Together, these players make up what is known as the shadow banking system.

The term may sound mysterious, but shadow banking is neither hidden nor necessarily risky by nature. It simply refers to financial institutions that perform many of the functions of banks without operating as licensed commercial banks.

What Is Shadow Banking?

In simple terms, shadow banking describes organizations that provide financing and credit without accepting customer deposits like traditional banks.

These institutions help businesses and individuals access capital through a variety of channels. Common examples include:

• Private credit funds
• Money market funds
• Hedge funds
• Finance companies
• Fintech lending platforms
• Peer-to-peer lending networks

While their structures differ, they all serve a similar purpose: connecting capital with those who need it.

Why Is Shadow Banking Growing?

The expansion of shadow banking is being driven by a combination of market demand, regulatory dynamics, and technological innovation.

Today, businesses are seeking faster and more flexible financing options, while investors continue to look for returns beyond those offered by traditional savings and investment products. At the same time, digital platforms and fintech solutions have made it easier to connect borrowers with alternative sources of capital.

Several factors continue to support the growth of non-bank finance:

• Businesses need more diverse funding channels. 
• Investors are searching for higher-yield opportunities. 
• Fintech platforms are streamlining access to credit and investment products. 

Startups and SMEs often require financing solutions that fall outside conventional lending models. 

Institutional investors are allocating more capital to private credit and alternative assets. 

As these trends continue, shadow banking is becoming an increasingly important source of funding and liquidity within the broader financial ecosystem.

The Advantages of Shadow Banking

Supporters argue that shadow banking makes financial markets more flexible and efficient.

For businesses, especially startups and growing companies, alternative lenders can often provide faster access to capital than traditional banks. In some cases, they are also willing to finance businesses that may not fit a bank's standard risk profile.

Some of the key benefits include:

• Greater access to funding
• Faster financing decisions
• More competition in financial services
• Increased support for innovation and entrepreneurship

In many markets, shadow banking complements traditional banking rather than replacing it.

Risks and Regulatory Concerns

While shadow banking expands access to capital and financial services, it also presents a unique set of risks.

Because many non-bank financial institutions operate under different regulatory frameworks than traditional banks, their risk profiles can vary significantly. In some segments, oversight may be lighter, while certain business models may be more exposed to market fluctuations or funding pressures.

Key concerns associated with shadow banking include:

• Liquidity pressures during periods of market uncertainty 
• Greater sensitivity to asset price and market volatility 
• Regulatory gaps across different jurisdictions and sectors 
• Interconnected financial relationships that can amplify risks across markets 

As the sector continues to grow, regulators and market participants are increasingly focused on improving transparency, risk management, and oversight to ensure that innovation and financial stability develop in parallel.

The Fintech Factor

The rise of fintech has added a new chapter to the shadow banking story.

Digital lenders, Buy Now Pay Later providers, and alternative financing platforms are transforming how people access credit. While many operate within regulatory frameworks, they also highlight a broader trend: financial services are no longer the exclusive domain of traditional banks.

As technology continues to reshape finance, the line between banks and non-bank institutions is becoming increasingly blurred.

Wrapping Things Up…

Shadow banking has become a major force in modern finance, helping businesses raise capital, supporting investment activity, and expanding access to funding.

Its growth reflects a broader shift in how money moves through the economy. While regulators continue to monitor the risks, shadow banking is likely to remain an important source of financing in the years ahead.

For entrepreneurs, investors, and anyone following the future of finance, understanding shadow banking is no longer optional; it's now essential.

Kholoud Hussein 

In the language of business and investing, few expressions carry as much optimism as “getting in on the ground floor.” The phrase is frequently used by investors, entrepreneurs, and startup founders to describe an opportunity to participate in a company, project, or market at its earliest stage, before significant growth occurs. While the concept originated in real estate and construction—where entering a building at the ground floor meant being there from the very beginning—it has become one of the most widely used terms in the startup ecosystem.

For startups, the ground floor represents more than just an early stage of development. It symbolizes potential. It is the period when a company has yet to realize its full value, when risks are high, but the prospects for future growth can be substantial. Investors who enter at the ground floor hope to benefit from the company's future success, while founders seek partners willing to believe in a vision before it becomes a proven business.

The appeal of the ground floor concept is rooted in the mathematics of growth. Early participants often have access to opportunities that later entrants cannot obtain. A startup that raises capital at a modest valuation may, if successful, multiply its worth many times over in subsequent funding rounds. This is why venture capital firms devote considerable resources to identifying promising companies before they become household names. The greatest returns in startup investing are often generated not by finding established winners, but by recognizing future winners before the broader market does.

This dynamic has shaped some of the world's most successful technology companies. Early investors in businesses such as Airbnb, Uber, and Stripe entered long before these firms achieved global scale. At the time, the opportunities were uncertain, the business models were still evolving, and profitability was far from guaranteed. Yet those willing to participate at the ground floor were rewarded when these startups transformed entire industries.

For founders, attracting ground-floor investors can be equally important. Early-stage capital often provides the resources needed to validate a business model, develop a product, hire talent, and enter the market. Beyond funding, these investors frequently contribute strategic guidance, industry expertise, and valuable networks that help young companies navigate their most vulnerable period.

However, the ground floor is also where uncertainty is greatest. Most startups fail before reaching maturity, making early-stage investing inherently risky. Products may never achieve market fit, competitors may emerge with stronger offerings, or economic conditions may shift unexpectedly. As a result, entering at the ground floor requires more than optimism; it demands careful evaluation, due diligence, and a long-term perspective.

In recent years, the concept has gained particular relevance in emerging startup ecosystems, including Saudi Arabia and the wider GCC region. As governments pursue economic diversification and innovation-led growth, investors are increasingly looking for opportunities to participate in sectors that are still in their formative stages. Areas such as artificial intelligence, fintech, climate technology, logistics, digital health, and space technology are attracting attention precisely because they offer the possibility of entering on the ground floor of industries that could expand dramatically over the next decade.

Saudi Arabia, in particular, presents a compelling example. Under Vision 2030, the Kingdom has invested heavily in entrepreneurship, venture capital, and technology infrastructure. New startups are emerging across a wide range of sectors, creating opportunities for investors to back businesses before they achieve regional or international scale. For many venture capital firms, the attraction lies not only in individual startups but also in participating in the ground floor of an entire innovation ecosystem that is still evolving.

The concept extends beyond investors. Employees who join startups in their earliest days are often described as getting in on the ground floor as well. Early hires may receive equity, take on leadership responsibilities, and help shape company culture. If the startup succeeds, their rewards can extend far beyond a traditional salary. This has contributed to a growing entrepreneurial culture where talented professionals increasingly view startups as career opportunities rather than risky alternatives to established corporations.

Looking ahead, the importance of the ground floor concept is likely to increase as technological disruption accelerates. Emerging fields such as generative AI, robotics, clean energy, quantum computing, and advanced mobility are creating entirely new markets where today's startups may become tomorrow's industry leaders. Investors, founders, and employees alike are searching for opportunities to participate before these sectors mature.

Ultimately, the phrase "getting in on the ground floor" captures one of the most powerful ideas in entrepreneurship: the belief that value is created long before it becomes visible. For startups, it represents the earliest chapter of growth. For investors, it represents the pursuit of outsized returns. And for innovation-driven economies such as Saudi Arabia, it represents the opportunity to build the next generation of globally competitive companies from the very beginning.

Ghada Ismail

Not long ago, the relationship between large corporations and startups was relatively straightforward. Established companies invested in promising startups, partnered with them, or acquired them once they had proven their market value. Innovation largely happened outside the walls of major businesses.

Today, that dynamic is changing. Across Saudi Arabia, a growing number of conglomerates and family-owned business groups are taking a more active role in creating innovation by building startups themselves. Rather than waiting for entrepreneurs to identify opportunities, these companies are establishing dedicated teams tasked with spotting market gaps, developing new products, and launching entirely new ventures from within.

The shift reflects broader changes taking place across the Kingdom. As Vision 2030 drives economic diversification and digital transformation reshapes industries, Saudi companies are increasingly looking beyond their traditional business models. For many, the objective is no longer simply to adapt to change but to create the businesses that will drive future growth.

These internal startup units—often operating as venture studios, innovation hubs, or venture-building teams—are becoming an increasingly important part of how some of Saudi Arabia’s largest organizations approach innovation.

Why Conglomerates Are Looking Inward

For decades, diversification often meant expanding into new sectors through acquisitions, partnerships, or geographic growth. While these strategies remain important, they can be expensive, time-consuming, and dependent on opportunities that may not always exist.

At the same time, technological disruption is forcing companies to respond faster to changing markets. New business models can emerge rapidly, and startups have repeatedly demonstrated their ability to challenge established players with innovative products and services.

Many Saudi conglomerates have realized that waiting for the next disruptive company to appear may no longer be enough. Building ventures internally allows them to stay closer to emerging trends while creating businesses that align directly with long-term strategic priorities.

The Kingdom’s rapidly maturing startup ecosystem has also influenced this trend. Over the past decade, Saudi entrepreneurs have built successful companies across fintech, e-commerce, logistics, healthtech, and software. Their success has shown that innovative businesses can be created and scaled locally, encouraging larger corporations to adopt entrepreneurial thinking themselves.

What Is an Internal Startup Unit?

An internal startup unit goes beyond the role of a traditional innovation department.

While innovation teams often focus on improving existing products, services, or processes, startup units are typically tasked with creating entirely new businesses. Their role is to identify opportunities, validate market demand, develop products, and launch ventures that could eventually become standalone companies.

These teams often combine entrepreneurs, product managers, developers, strategists, and industry specialists. Many operate separately from core business units, giving them greater flexibility to experiment and move quickly without becoming trapped in corporate bureaucracy.

The goal is not innovation for its own sake, but the creation of sustainable businesses capable of generating new revenue streams and opening new markets for the parent organization.

The Venture-Building Influence

The rise of internal startup units is closely linked to the growing popularity of venture-building models globally.

Unlike venture capital firms that invest in startups founded by others, venture builders actively participate in creating companies from the ground up. They identify opportunities, assemble teams, develop products, and provide operational support throughout the startup journey.

The model has gained traction in Saudi Arabia through venture studios and startup factories that treat entrepreneurship as a structured, repeatable process rather than a matter of chance.

For conglomerates, the appeal is clear. Instead of investing in multiple external startups and hoping a few succeed, they can build businesses aligned with their own strategic priorities while leveraging assets they already possess.

Different Models Are Emerging

Saudi companies are experimenting with several approaches to venture building.

Some have established dedicated venture studios that operate almost independently, identifying opportunities and creating startups from scratch. Others have launched innovation labs focused on emerging technologies and experimentation, with successful projects sometimes evolving into standalone businesses.

A third approach involves commercializing internal capabilities. Technology solutions originally developed for internal use can become products serving external customers. Some companies are also pursuing joint ventures with entrepreneurs, international technology firms, or specialized operators to combine corporate resources with startup expertise.

Despite these differences, all of these models share the same objective: creating new growth engines beyond traditional business lines.

Saudi Companies Putting the Model into Practice

While Saudi Arabia's corporate venture-building ecosystem is still developing, several organizations have established structures that reflect different approaches to creating and scaling new ventures. Importantly, not all of these initiatives follow the same model. Some focus on building businesses internally, while others support external startups or expand through internal innovation.

One of the strongest examples of venture building in the Kingdom is Saudi Aramco. Through the Saudi Aramco Entrepreneurship Center, known as Wa'ed, the company has spent more than a decade supporting entrepreneurship and business creation. Complementing this effort are Wa'ed Ventures, Aramco's venture capital arm, and LAB7, its venture-building and product development platform. Together, these initiatives form part of a broader ecosystem designed to identify opportunities, develop technologies, support entrepreneurs, and help transform ideas into scalable businesses. While not a traditional startup studio in the Silicon Valley sense, Aramco has built one of the Kingdom's most structured pathways for venture creation and commercialization.

Beyond Aramco, other organizations are helping shape an emerging venture-building ecosystem. Dussur, established by Saudi Aramco, the Public Investment Fund (PIF), and SABIC, was created to develop strategic industrial businesses that advance Saudi Arabia's localization and industrialization ambitions. Unlike traditional investment vehicles, Dussur often works alongside partners to establish and grow new industrial ventures, making it one of the Kingdom's most prominent examples of institution-backed company building.

Another notable example is Sanabil Studio, a venture-building platform launched by Sanabil Investments. The studio works with entrepreneurs to identify market opportunities, validate ideas, assemble teams, and launch startups. Its model reflects the growing popularity of venture building in Saudi Arabia, where startup creation is increasingly being approached through structured processes rather than relying solely on individual founders.

Not all corporate innovation initiatives, however, focus on creating ventures internally. Some organizations have chosen to engage with the startup ecosystem through external support platforms. stc's InspireU program is a leading example. Since its launch, InspireU has provided startups with mentorship, funding, training, and access to industry networks, helping strengthen the Kingdom's entrepreneurial ecosystem while giving stc exposure to emerging technologies and business models.

Other companies demonstrate how internal innovation can create entirely new commercial opportunities without necessarily operating formal venture studios. Elm is one such example. Originally focused on digital government solutions, the company has steadily expanded its portfolio through the development of digital products and platforms serving both public- and private-sector customers. Its evolution illustrates how large organizations can leverage internal expertise, technology capabilities, and market knowledge to create new business lines and revenue streams.

The distinction is important. Building startups internally, supporting external entrepreneurs, and expanding through internal innovation are different approaches, but all reflect a broader shift in how Saudi organizations think about growth and innovation. While the Kingdom still has relatively few publicly documented corporate venture studios compared with more mature markets, an increasing number of organizations are experimenting with new ways to create businesses rather than simply invest in them. As competition intensifies and economic diversification accelerates, these models are likely to play an increasingly important role in shaping the next generation of Saudi companies.

Why the Model Makes Sense

One reason internal startup units are attracting attention is that they address several challenges commonly faced by traditional startups.

Access to funding is perhaps the most obvious advantage. Corporate-backed ventures typically begin with financial resources already in place, allowing teams to focus on product development and market validation rather than fundraising.

These ventures also benefit from established customer networks, supplier relationships, distribution channels, and industry connections that can accelerate growth significantly. Brand recognition provides another advantage. While independent startups often spend years building trust, ventures launched under respected corporate brands may gain credibility much faster.

Perhaps most importantly, they can draw upon decades of industry expertise. Large corporations possess deep knowledge of customer behavior, operational challenges, and market dynamics that can help new ventures avoid costly mistakes and identify opportunities more effectively.

Yet There Are Real Challenges

Despite these advantages, corporate venture building is far from a guaranteed success.

The biggest obstacle is often culture. Startups thrive on experimentation, rapid iteration, and calculated risk-taking, while large corporations are typically structured around governance, efficiency, and risk management. These priorities can sometimes clash.

A startup team may want to launch a product quickly, while corporate procedures require multiple layers of approval. Without the right balance, the speed and agility that make startups effective can easily be lost.

Talent acquisition presents another challenge. Experienced entrepreneurs and startup operators often prefer environments that offer autonomy and flexibility. Attracting and retaining such talent within a corporate structure requires thoughtful leadership, clear incentives, and sufficient independence.

Measuring success can also be difficult. New ventures rarely become profitable immediately, requiring organizations to evaluate progress based on learning, customer adoption, and market validation rather than short-term financial performance alone.

The Future Ahead

As Saudi Arabia continues its economic transformation, internal startup units are likely to play an increasingly prominent role within the private sector.

Sectors such as artificial intelligence, fintech, logistics, healthtech, climate technology, enterprise software, and industrial technology offer significant opportunities for corporate venture building. Future startup units may also collaborate more closely with universities, research institutions, entrepreneurs, and government-backed innovation programs, strengthening links between established corporations and the wider startup ecosystem.

What is clear is that the relationship between corporations and entrepreneurship is changing. Saudi conglomerates are no longer content with supporting innovation from the sidelines. Increasingly, they are becoming builders themselves, creating startups, launching new ventures, and shaping the next generation of businesses that could define the Kingdom’s economic future.

In many ways, this marks a new chapter for Saudi corporate innovation, one in which some of the country’s largest organizations are beginning to think and act more like startups themselves.

Noha Gad

Investors in today’s fast-paced financial world face a constant challenge: how to grow their wealth effectively without getting lost in the complexities of daily market movements. For both seasoned investors and those who start to build their portfolio, the decisions they make and the time they are willing to spend making them can significantly impact their financial future. For many, the ideal solution is to partner with a professional who can navigate market volatility on their behalf, combining expertise with a personalized approach to wealth management. This is where discretionary investment management comes in.

What is discretionary investment management?

Discretionary investment management is a service model in which a professional investment manager is authorized to make buying and selling decisions on behalf of the client, without needing prior approval for each transaction. Instead of spending hours researching stocks, analyzing trends, or monitoring global economic developments, clients delegate day-to-day portfolio decisions to a trusted advisor while retaining overall control through a clearly defined investment mandate. 

This service is usually offered to wealthy individuals or large institutions and often requires a large minimum investment. It can be an ideal choice for clients who do not wish to manage day-to -day investment decisions.

What do discretionary investment managers do?

Discretionary investment services cater to high-net-worth individuals and institutional investors, requiring minimum investments. The portfolio manager uses their expertise to grow and protect the client’s account balance over time, while making investments that align with the client’s goals.

Managers’ strategy may involve purchasing a variety of securities in the market, as long as it aligns with the client's risk profile and financial goals. Managers might buy stocks, bonds, ETFs, and financial derivatives.

Benefits of discretionary investment management

Discretionary investment management offers a compelling value proposition for investors who want professional expertise without the burden of daily portfolio oversight. Core benefits that make this approach increasingly popular among high-net-worth individuals, institutional clients, and retail investors include:

• Professional expertise and active management. Discretionary investment management offers access to skilled investment professionals who dedicate their time and knowledge to analyzing markets, identifying opportunities, and managing risk. These managers continuously monitor economic indicators, company performance, and global events to make informed decisions that align with the investment objectives.
• Time-saving and convenience. Saving time is one of the key benefits of discretionary management services. It also enables investors to focus on their career, business, or personal life, while the manager handles all transaction execution, research, and portfolio adjustments, making it a truly hands-off investment experience.
• Designing personalized portfolios. Discretionary managers create tailored investment strategies designed specifically for investors’ financial goals, risk tolerance, time horizon, and liquidity needs. Unlike off-the-shelf investment products or pooled funds that follow a one-size-fits-all approach, the portfolio is constructed to match investors’ unique circumstances. 
• Faster reaction to market opportunities. As discretionary managers can execute trades immediately without waiting for client approval, they can capitalize on time-sensitive opportunities or quickly reduce exposure during market downturns.

These benefits make discretionary investment management an attractive option for investors seeking expert guidance, efficiency, and the potential for superior risk-adjusted returns, all while maintaining control over their overall financial direction through a well-defined investment mandate.

Whether you are a high-net-worth individual, an institutional investor, or a retail investor increasingly accessing these services through digital platforms, discretionary management provides the perfect balance of professional expertise and hands-off convenience. It allows investors to focus on what matters most, their career, business, or personal life, while their portfolios are actively managed to align with their financial goals and risk tolerance.

Ghada Ismail

In the startup world, raising money is often treated as the ultimate sign of success. Big funding rounds generate headlines, attract attention, and create momentum around companies. But experienced founders know something many first-time entrepreneurs eventually learn the hard way: not all money behaves the same way.

Some investors stay committed when growth slows down or markets become uncertain. Others disappear the moment conditions become difficult.

That difference is what people in the investment world call “sticky capital.”

What Is Sticky Capital?

Sticky capital refers to long-term investment that stays committed to a company or market despite temporary setbacks, economic uncertainty, or market volatility.

Unlike speculative funding that chases trends and quick returns, sticky capital focuses on sustainable growth. Investors providing this type of funding understand that building successful businesses takes time and that difficult periods are part of the process.

In simple terms, sticky capital is often described as “loyal money.”

Sticky capital usually involves:

• Investors staying during downturns instead of exiting quickly 
• Long-term commitment over short-term gains 
• Patience with slower growth periods 
• Strategic guidance alongside financial support 
• Focus on fundamentals rather than hype 

For founders, this kind of stability can be incredibly valuable. It creates room to experiment, solve problems, and improve the business without constantly worrying about investors suddenly pulling back.

Not All Money Behaves the Same Way

In the startup ecosystem, founders often celebrate funding rounds as signs of success. But experienced entrepreneurs know that where the money comes from matters just as much as how much is raised.

Some investors aggressively enter trending sectors during boom periods, chasing hype and fast returns. But when markets cool down, they pull back just as quickly.

This is often called “tourist capital.”

Tourist capital follows momentum. Sticky capital follows conviction.

The difference is simple:

Tourist Capital

• Chases trends and hype 
• Focused on quick returns 
• Pulls back quickly during downturns 

Sticky Capital

• Thinks long term 
• Supports sustainable growth 
• Remains committed during uncertainty 

That difference can completely shape a startup’s future.

Why is Sticky Capital important?

Startups operate in uncertain environments by nature. Markets shift, customer behavior changes, competition evolves, and economic slowdowns can happen unexpectedly.

During those moments, stable investors become extremely important.

Startups backed by sticky capital are often better positioned to survive difficult cycles because they are not forced into panic-driven decisions. Instead of abandoning long-term goals outright, they can focus on improving products, refining operations, and adapting strategically.

Sticky capital also allows founders to think beyond short-term optics. When entrepreneurs know their investors believe in the bigger vision, they are more likely to invest in talent, infrastructure, and long-term product development instead of obsessing over the next funding round.

In many cases, companies built with patient capital become healthier businesses because they are focused on fundamentals rather than hype.

To Wrap Things Up…

Every startup ecosystem wants investment flowing into the market. But sustainable growth depends on attracting the right type of investment.

Sticky capital encourages healthier founder-investor relationships, supports long-term thinking, and helps startups survive difficult cycles without losing focus.

Most importantly, it creates businesses built on resilience rather than hype.