CAIRO: The evolving business landscape of Saudi Arabia has encouraged regional and global companies to establish a local presence in the emerging market.
Egyptian-born generative artificial intelligence startup DXwand aims to get closer to its customers with an on-the-ground team.
In an interview with Arab News, Ahmed Mahmoud, CEO of DXwand, shared the company's strategic ideas to establish a local office in Riyadh by the middle of the year.
“We have already started the formalities and received the MISA (Ministry of Investments of Saudi Arabia) license. The exact location is still being discussed, but it should be in the amazing capital of Saudi Arabia, Riyadh,” he said.
One step closer
Mahmoud emphasized the importance of delivering value and impact quickly with quick wins, and is keen to demonstrate the company's differentiated position in technology and long-term ambitions in the partnership.
He said: “This goal is planned to be achieved with local partners in technology and other industries to ensure our success. We already have several partners in Saudi Arabia and we plan to increase 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: “Focusing on influencing the key areas of Saudi Arabia in its 2030 vision, especially in the areas of economic diversification, quality of life, environmental sustainability, culture and entertainment, we have set long-term goals and related initiatives to support and influence these goals. districts”.
He further explained, “DXwand's expansion always involves local industry-focused or technology-creating partners, leading to a greater contribution to each country's economy, delivering faster and deeper impact and achieving superior results with local talent and resources that understand the culture and the local culture is very well hurt.”
One of these partners includes Gulf business expansion platform AstroLabs, which is looking 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 government of Saudi Arabia is a key cornerstone to realizing our expansion vision, and we are in the process of identifying potential areas of cooperation and interested government entities,” he said.
This collaboration is designed to support DXwand's compliance with the country's evolving regulatory environment.
Our solutions align with the country's goals to improve digital infrastructure, improve public services and promote innovation.
Ahmed Mahmoud, CEO of DXwand
“Artificial intelligence regulations are a new field not only for Saudi Arabia, but for the whole 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, for creating secure AI technology and ensuring that it meets privacy and security standards around the world,” said Mahmoud.
“This will help us adapt to any regulatory needs in Saudi Arabia as we proactively reduce risk and ensure a safe experience for our community,” he added.
Mahmoud said the company is doubling its growth annually from 2020, and he aims to maintain that trajectory along with the implementation of two nationwide impact initiatives per year.
He added that Saudi Arabia will be a key geographic area for one of these national impact initiatives in 2024. “We believe that Saudi Arabia has all the necessary elements of success to implement not only one of our national initiatives, but it may even be the most implemented,” he said. said.
Mahmoud also revealed that the company has three new products that use generative artificial intelligence technology, although the details are still under wraps.
“With the help of our co-assembly partners, we are developing three new products that use our generative artificial intelligence technology. At the moment, we cannot share more details about them, as we will share them with our respective partners in the near future,” he said.
Expanding into Saudi Arabia is key to DXwand's strategy due to factors such as alignment with Vision 2030, market opportunities and government support, Mahmoud stressed.
He further explained the alignment of DXwand's AI solutions with the Vision 2030 ambitions of economic diversification and digital transformation.
“Our solutions are in line with the country's goals to improve digital infrastructure, improve public services and promote innovation,” he said.
He added that significant investments in sectors such as healthcare, education, financial services and tourism provide lucrative opportunities for DXwand.
Government support for the knowledge-based economy and investment in technology is also in line with his campaign's goals, Mahmoud said.
Initiatives to attract foreign investment and create a favorable business environment make Saudi Arabia a strategic location that offers access to other Middle Eastern markets, serving as a springboard for regional expansion, Mahmoud explained.
Saudi Arabia's tech-savvy population provides a receptive market for AI-driven solutions. “This demographic is receptive to adopting new technologies, creating an enabling environment for artificial intelligence solutions,” he said.
Basics of business
In terms of funding, DXwand has raised $6.7 million since its inception, with the most recent $4 million Series A round closing in December 2023. This investment will launch DXwand's establishment in Saudi Arabia, fostering strategic partnerships with local partners, educational institutions and strategic customers. .
Mahmoud said: “We plan to use part of the fund to accelerate the activities of DXwand's first establishment in Saudi Arabia and develop strategic partnerships to create an ecosystem that both supports DXwand's growth ambitions while working with Saudi Arabia to influence and accelerate its 2030 roadmap . vision outcomes and nationwide impact”.
Addressing industry challenges in Saudi Arabia, Mahmoud discussed the hype surrounding generative artificial intelligence and DXwand's approach to finding niche solutions.
He noted that DXwand's platform, DXP, is designed to address issues such as high cost of language models, lack of managed accuracy measurement and slow time to market.
“The DXwand DXP platform provides more than 90 percent cost optimization using low-budget LLM offerings, while increasing accuracy by more than 30 percent with a single tool that allows experiments to measure and RAG (retrieval augmented generation) for easy accuracy optimization and expenses,” Mahmud said. .
DXwand operates on a subscription business model, selling its products with annual or monthly subscriptions that match the size of the problem represented by the volume of conversations or the number of users.
Mahmoud said that DXwand is a profitable company with a healthy financial model designed to ensure profitable unit economics.
The motivation for founding DXwand stems from Mahmoud's experience at Microsoft, where he saw the potential for AI businesses focused on the cultural and linguistic needs of the region.
“This potential was untapped and it tempted me to take a leap of faith and leave such a respected international Silicon Valley giant to start the DXwand journey,” he stated.
Key performance indicators for DXwand include LLM cost optimization, overtime accuracy, 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.
“Specifically for Saudi Arabia, as we are still newly introduced, I would like to focus on new partnerships, new customer sign-ups and their experience of cost optimization and accuracy,” he noted.
Mahmoud assesses the current AI and technology market landscape in Saudi Arabia as rapidly evolving with many opportunities and challenges.
He highlighted the Saudi Arabian government's leadership and investment in economic diversification, digital transformation, artificial intelligence and talent development.
“Thanks to government leadership and investment in economic diversification, digital transformation, artificial intelligence and talent development, we foresee a great opportunity for growth with such a new market with excellent GDP (gross domestic product) and population,” he said.
In terms of industry outlook, Mahmoud expects a decline in adoption due to economic factors and operating costs of generative AI, which will affect their business case. However, he sees it as an opportunity.
“We predict a decline in adoption driven by economic factors and the cost of operating generative AI and its reflection on their relative business cases, which is a great opportunity over the next year or two to exploit this challenge if you have a solution, that can provide such technology with cost-effectiveness and the ability to scale quickly,” he explained.
