CAIRO: Saudi Arabia's growing business landscape has encouraged regional and global companies to establish a local presence in the burgeoning market.
Egypt-born generative AI startup DXwand is leaving no stone unturned as it aims to get closer to its customers with a team on the ground.
In an interview with Arab News, Ahmed Mahmoud, CEO of DXwand, shared the company's strategic outlook on establishing a local office in Riyadh by mid-year.
“We have already started the formalities and obtained the MISA (Ministry of Investments of Saudi Arabia) license. The exact location is still under discussion, but it will be in the stunning capital of Saudi Arabia, Riyadh,” he said.
One step closer
Mahmoud emphasized the importance of delivering value and rapid 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: “This goal is planned to be achieved with local partners, from technology and other industries, to ensure our success. We already have several partners in Saudi Arabia and our plan is to multiply this number by the end of 2024.”
DXwand's expansion strategy is firmly aligned with Saudi Arabia's Vision 2030, focusing on economic diversification and digital transformation.
Mahmoud said: “Focusing on achieving impact on the priority areas of Saudi Arabia's Vision 2030, particularly in economic diversification, quality of life, environmental sustainability and culture and entertainment, we have set long-term goals and corresponding initiatives for to support and impact them. areas.”
He further explained, “DXwand expansion always involves local partners who are industry-focused or technology builders, leading to greater contributions to each country's economy, delivering faster and deeper impact and achieving great results with talent and local resources who understand local culture and culture. pain very well.”
One of these partners includes Gulf business expansion platform AstroLabs, which aims to leverage DXwand's strong presence in the US, UAE and Egypt.
Mahmoud emphasized the importance of working with official bodies to improve services in their sector.
“Collaboration with the Saudi government is a stepping stone to deliver on our expansion vision and we are in the process of identifying potential areas of collaboration of interest and government entities concerned,” he said.
This collaboration is intended to support DXwand's alignment with the country's evolving regulatory environment.
Our solutions align with the country's goals to improve digital infrastructure, improve government services and drive innovation.
Ahmed Mahmoud, CEO of DXwand
“AI regulations is an emerging field not just for Saudi Arabia, but for the entire world. We believe in early engagement with regulators to benefit both parties in understanding risks and building proactive mitigation measures. We believe that AI companies should be responsible, regardless of regulations, to build safe AI technology and ensure that it meets global privacy and security standards,” said Mahmoud.
“This will help us adapt to any regulatory needs in Saudi Arabia as we proactively mitigate risks and ensure a safe experience for our community,” he added.
Mahmoud said the company has grown by a multiple of two annually since 2020 and aims to maintain this trajectory along with delivering two national impact initiatives per year.
He added that Saudi Arabia will be a major geography for one of these national impact initiatives in 2024. “We believe that Saudi Arabia has all the elements of success to achieve not only one of our national initiatives, but could even be the best done,” he added. said.
Mahmoud also revealed that the company has three new products in development leveraging their generative AI technology, although the details are still under wraps.
“With the help of our co-build partners, we have three new products under development using the same generative AI technology. We cannot share more details about them at the moment, while we will announce them with the relevant partners very soon,” he said.
Expansion into Saudi Arabia is central to DXwand's strategy due to factors such as alignment with Vision 2030, market opportunities and government support, Mahmoud pointed out.
He further explained the alignment of DXwand's AI solutions with Vision 2030 ambitions for economic diversification and digital transformation.
“Our solutions align with the country's goals to improve digital infrastructure, improve government services and drive innovation,” he said.
He added that significant investments in sectors such as health, education, financial services and tourism present lucrative opportunities for DXwand.
The government's support for a knowledge-based economy and investment in technology also aligns with his company's goals, Mahmoud said.
Initiatives to attract foreign investment and create a favorable business environment make Saudi Arabia a strategic location that provides access to other markets in the Middle East, serving as a springboard for regional expansion, Mahmoud explained.
The tech-savvy Saudi population provides a receptive market for AI-based 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 inception, with the most recent Series A round of $4 million closing in December 2023. This investment will kick-start DXwand's establishment in Saudi Arabia, fostering strategic partnerships with local partners, educational institutes and strategic customers. .
Mahmoud said: “We plan to use part of the fund to kick-start DXwand's early-stage activities in Saudi Arabia and foster strategic partnerships to build an ecosystem to deliver DXwand's growth ambition, while collaborating with Saudi Arabia to impact and accelerate its execution in 2030. vision outcomes and impact on the ground at the national level.”
Addressing industry challenges in Saudi Arabia, Mahmoud discussed the hype surrounding generative AI and DXwand's approach to finding niche solutions.
He noted that DXwand's platform, DXP, is designed to address issues such as high language model costs, lack of managed precision measurement, and slow time to market.
“The DXWand DXP Platform delivers over 90% cost optimization leveraging state-of-the-art LLM offerings while increasing accuracy by over 30% using a single tool that enables experiments to measure and RAG (recovery enhanced generation) to optimize accuracy and costs easily,” said Mahmoud. .
DXwand operates on a subscription-based business model, selling its products with annual or monthly subscriptions relevant to the size of the problem represented by conversation volume or user numbers.
Mahmoud said DXwand is a profitable company with a sound financial model designed to ensure a profitable unit economy.
The motivation behind founding DXwand came from Mahmoud's experience at Microsoft, where he saw the potential for AI ventures focused on the cultural and linguistic needs of the region.
“This potential was not served and tempted me to take a leap of faith and resign from such an international Silicon Valley giant to start the DXwand journey,” he stated.
Key performance indicators for DXwand include LLM cost optimization, precision overtime, new sign-ups, new contracts, new partners and time to market.
Mahmoud emphasized the importance of carefully managing growth in Saudi Arabia to maintain reputation and customer experience.
“Especially for Saudi Arabia, as we are still newly introduced, I would focus on new partnerships, new customer sign-ups and their experience with cost optimization and accuracy,” he noted.
Mahmoud assesses the current AI and technology market landscape in Saudi Arabia as rapidly evolving, with numerous 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 economic diversification, digital transformation, artificial intelligence and talent development, we anticipate great growth opportunity with such an emerging market with an outstanding GDP (gross domestic product) and population,” he said.
In terms of industry forecasts, Mahmoud anticipates a decline in adoption due to economic factors and operating costs of generative AI affecting their business cases. However, he sees this as an opportunity.
“We foresee a decline in adoption driven by economic factors and the costs of operating generative AI and its reflections on their relative business cases, which is a great opportunity for the next year or two to capitalize on this challenge if you have a solution that can provide such a solution. technology with cost-effectiveness and rapid scalability,” he explained.
