Newlab, a New York City-based company that helps launch and fund startups in industrial sectors, is opening a new hub this year in Riyadh, Saudi Arabia. The hub aims to attract startups to Saudi Arabia, focusing first on the mining industry.
Future programs will focus on energy, logistics and advanced manufacturing.
The company would not say how much funding is going into the new hub. In an interview, Liz Keen, chief strategy officer, said that its larger hubs, such as Riyadh, require funding commitments totaling hundreds of millions of dollars from governments and large companies. The hub in Saudi Arabia is another sign of the Kingdom’s commitment to economic transformation. It has already increased women’s labor force participation and launched a series of initiatives under the Crown Prince’s Vision 2030 to create more innovation – arguably the two most significant drivers of economic growth.
“As a woman, I can see that,” said Keen. “You’ve got a generation of talent returning to Saudi to help with the transformation. It’s one of the reasons we got excited about the hub.”
Newlab, which already operates hubs in Brooklyn, Detroit and Montevideo, Uruguay, was founded by David Belt and Scott Cohen in 2011 as a strategy to redevelop the decaying Brooklyn Navy Yard by attracting small companies. The company has evolved over the years to incorporate finance and market and product development. In addition to the hub in Riyadh, the company also plans to open two smaller hubs this year, Keen said.
Muneef AlMuneef, the new head of Newlab Riyadh, was previously general director of renewable energy policies at the Ministry of Energy, where he helped lead the development and implementation of policies and strategies to advance KSA’s renewable energy sector, according to Newlab.
Funding launch the company’s new hubs comes from private companies and governments that have an interest in transforming particular sectors. “This is literally the technology needed to address the challenges facing the world,” Keen said.
Ford Motor Co., for instance, helped fund the launch the 270,000 square foot hub in Detroit, as it aims to remain a player in the transportation system of the future. The Newlab hub there is home to more than 100 transportation-sector startups in an Albert Kahn-designed building. The startups have received a total of $700M in funding, The New York Times reported in 2024.
Saudi Arabia’s focus on mining likely reflects new global shift toward controlling value chains for critical minerals needed for computer chips and the transition to a new energy economy. Newlab bills itself as a venture platform, meaning that it picks startups, helps them grow, and matches them with customers and funding.
What is Critical Tech or Deep Tech?
For decades, the venture capital business saw its biggest successes with software investments. Software-based startups are relatively quick and easy to grow, as their business models mostly relied on replaced expensive human labor with the promise of software algorithms. In the most famous example, travel web sites replaced travel agents. The web sites were more convenient – and very profitable.
Increasingly, people are trying to use the levers of finance to fund new companies that tackle problems in “deep tech” or “critical tech.” Essentially, the new venture capitalists are trying to finance companies that are profitable – that’s the poker stakes – but that also bring solutions to the market that solve pieces of the world’s big problems, like developing a new energy system or a new transportation infrastructure.
Will The Geopolitics Get In the Way?
For decades, the venture capital industry has benefitted from the free flow of capital across borders. Countries across the globe have also used their own home-grown venture capital industries and sovereign wealth funds to invest in new technologies that match their strategic goals, sometimes requiring innovative startups to change countries. The result of this has probably been a net drain on the United States, which in the late 20th century was home to most of the innovative companies and the bulk of the financing systems for innovation. Today, innovation is increasingly global, possibly a result of this knowledge transfer.
There are signs that finance, too, may be subject to more restrictions in an era of increased protectionism, especially against China. The outgoing Biden administration recently limited venture investing by American institutions in Chinese firms, and criminalized investments in some industries like quantum computing. “Ugh, talk about the shutting the barn door after the horse has bolted: the US will from tomorrow limit its venture investing in China just as the Fed recognises that now is precisely the time to be trying to get its corporations to invest more there,” noted James Mawson, founder of Global Corporate Venturing, in a post on LinkedIn.
Against this complicated backdrop, Saudi Arabia is a bet by venture capitalists on the idea that the Kingdom remains a close ally of the United States, and is putting its massive resources into developing an innovation ecosystem, a new economy and now, it seems possible – a new energy system.
What Will The New Hub Look Like?
Newlab said it will establish an initial beta space in Riyadh in 2025 while developing a larger hub to open in 2026. Keen said Neom, the futuristic city that has drawn skepticism, is one possibility for a smaller hub in the Kingdom. As is typical in startup hubs, the building in Riyadh will include flexible workstations and private studios, labs, workshops, and event areas. As is also typical, Newlab will launch sector-focused and challenge-based programs to attract startups. Here is a link for startups to apply.
Less typical: Newlab’s connections with industrial players and government entities in Saudi Arabia will help startups find customers to help them prove their business models and find financing. Newlab sometimes makes equity investments in the startups, as it also finds venture dollars from around the world to invest in startups, according to Keen.
Newlab said the first program, The Mining Innovation Studio, will focus on startups that:
- Accelerate the exploration and identification of economically viable mineral resources
- Increase the efficiency, productivity, and regulatory compliance of mineral recovery
- Reduce emissions across the mining value chain
- Work to efficiently process and refining strategic and critical minerals from primary and secondary resources
Newlab also listed some of its initial partners:
The National Industrial Development and Logistics Program
The Ministry of Industry and Minerals
Saudi Geological Survey
Saudi Arabia Mining Company
Saudi Mining Services Company