Cairo: Saudi Arabia's booming business landscape has encouraged regional and global companies to establish a local presence in the growing market.
Egyptian-born generative artificial intelligence startup DXwand is leaving no stone unturned as it aims to get closer to its customers with an on-ground team.
In an interview with Arab News, DXwand CEO Ahmed Mahmoud shared strategic insights into the company's establishment of a local office in Riyadh in the middle of the year.
“We have started the formalities and got the MISA (Ministry of Investments of Saudi Arabia) license. The exact location is still under discussion, but it will be in Riyadh, the wonderful capital of Saudi Arabia,” he said.
one step closer
Mahmoud stressed the importance of rapidly delivering value and impact with quick wins and is also keen to demonstrate the company's differentiated position in technology and long-term ambitions in partnerships.
He said: “We plan to work with local partners, technology and other industries to ensure our success. We already have many partners in Saudi, and our plan is to multiply this number by the end of 2024.
DXwand's expansion strategy is strongly aligned with Saudi Arabia's Vision 2030, focusing on economic diversification and digital transformation.
Mahmoud said: “By focusing on the focus areas of Saudi's 2030 Vision, particularly economic diversification, quality of life, environmental sustainability, and impacting on culture and entertainment, we have set long-term goals and initiatives to support and impact those areas.”
He further explained: “DXwand's expansion always includes local partners who are industry-focused or technology builders, who contribute greatly to each country's economy, have a fast and deep impact, and local talent and resources who understand the culture and the local. It hurts so good.”
One of these partners includes Gulf business expansion platform AstroLabs which aims to leverage DXwand's strong presence in the US, UAE and Egypt.
Mahmud stressed the importance of working together with official bodies to enhance services in his area.
“Collaboration with the Saudi government is a key cornerstone in delivering our expansion vision, and we are in the process of identifying potential cooperation areas and relevant government agencies,” he said.
The collaboration is aimed at supporting DXwand's alignment with the country's evolving regulatory environment.
Our solutions align with the country's goals of expanding digital infrastructure, improving government services and encouraging innovation.
Ahmed Mahmoud, CEO of DXwand
“Regulations for AI is an emerging field not only for Saudis but globally. We believe in early engagement with regulators to benefit both parties in understanding risks and building proactive mitigations. We believe that AI companies, regardless of regulations, should be responsible for building secure AI technology and ensuring that it adheres to privacy and security standards globally,” Mahmood said.
“This will help us adapt to any regulatory requirements in Saudi as we are proactively mitigating risks and ensuring a safe experience for our community,” he added.
Mahmoud said the company has been growing by two times annually since 2020, and he is looking to deliver two nationwide impact initiatives per year to maintain this momentum.
He added that Saudi Arabia will be a key geography for one of these national impact initiatives in 2024. “We believe that in Saudi Arabia is not only one of our national initiatives, but it can be the best delivered. Said.
Mahmoud also revealed that the company has three new products in the pipeline, taking advantage of their generative AI technology, although details are still under wraps.
“With the help of our co-creation partners, we have three new products in the pipeline that are using our same generative AI technology. We cannot share more details about them at this time but we will announce them soon with the respective partners,” he said.
Expanding into Saudi Arabia is important to DXwand's strategy due to factors such as alignment with Vision 2030, market opportunities, and government support, Mahmoud highlighted.
He also explained the alignment of DXwand's AI solutions with Vision 2030 ambitions for economic diversification and digital transformation.
“Our solutions are aligned with the country's goals of expanding digital infrastructure, improving government services and encouraging innovation,” he said.
He said that significant investment in areas such as healthcare, education, financial services and tourism is an attractive opportunity for DXWAND.
Government support for the knowledge-based economy and technology investment is also in line with his company's objectives, Mahmoud said.
Initiatives to attract foreign investment and create a favorable business environment make Saudi Arabia a strategic location that provides access to other Middle Eastern markets, serving as a springboard for regional expansion, Mahmoud explained.
The tech-savvy Saudi population provides a receptive market for AI-powered solutions. “This demographic is receptive to adopting new technologies, creating an environment conducive to AI solutions,” he said.
Business fundamentals
In terms of funding, DXwand has raised $6.7 million since its inception, with the latest $4 million Series A round closing in December 2023. This investment will ignite DXwand's establishment in Saudi Arabia, fostering strategic partnerships with local partners, academic institutions, and strategic customers. .
Mahmoud said: “We plan to use part of the funding to foster strategic partnerships to ignite DXwand's first installation activities in Saudi Arabia and to build an ecosystem that will deliver DXwand's growth ambitions, both partnering with Saudi Arabia to influence and implement its 2030 implementation. Vision Outcomes and Land Impacts Nationwide.”
Addressing industry challenges in Saudi Arabia, Mahmoud discussed Generative AI and DXwand's approach to finding niche solutions.
He noted that DXwand's platform, DXP, was designed to address issues such as high large language model costs, lack of systematic accuracy measurements, and slow time to market.
“DXwand's platform DXP leverages low-end LLM offerings to deliver more than 90 percent cost optimization, while increasing accuracy by more than 30 percent using a tool that allows users to scale and easily optimize RAG (recovery-enhanced generation) accuracy and costs.” enables,” Mahmood said. .
DXwand operates on a subscription-based business model, selling its products through annual or monthly subscriptions relevant to the size of the problem, represented by conversation volume or user numbers.
Mahmoud said that DXwand is a profitable company with a healthy financial model, designed to ensure profitable unit economics.
The inspiration behind founding DXwand stemmed from Mahmoud's experience at Microsoft, where he saw the potential for AI ventures focused on the region's cultural and linguistic needs.
“This potential was not being served and it tempted me to take a leap of faith and resign from such a prestigious international Silicon Valley giant to embark on the journey of DXwand,” he said.
DXwand's key performance indicators include LLM cost optimization, accuracy overtime, new sign-ups, new contracts, new partners, and time to market.
Mahmoud emphasized the importance of careful growth management to maintain reputation and customer experience in Saudi Arabia.
“Specifically for Saudi, we are still new introductions, I will focus on their experience with new partnerships, new customer sign-ups, and cost and accuracy optimization,” he said.
Mahmoud assesses the current market landscape for AI and technology in Saudi Arabia as rapidly evolving with many opportunities and challenges.
He highlighted the Saudi government's leadership and investments in economic diversification, digital transformation, artificial intelligence and talent development.
“With government leadership and investment in economy diversification, digital transformation, artificial intelligence, and talent development, we foresee huge growth opportunities with such an emerging market with significant GDP (Gross Domestic Product) and population,” he said.
In terms of industry forecasts, Mahmoud predicts a decline in adoption due to economic factors and the cost of operational generative AI affecting their business cases. However, he sees it as an opportunity.
“We foresee a slowdown in adoption influenced by economic factors and the cost of operating generative AI and its reflection on their relative business cases, which is a huge opportunity for the next year or two to take advantage of this challenge if you have a solution that can solve it. Cost efficiency and speed.” Technology with the ability to scale,” he explained.
