Bilal Baloch: ‘Never let a serious crisis go to waste’

• Startups can still mature and grow
• Plan and focus on healthy cashflow
• Lower costs and deepen relationships

An early-stage investor and founder steeped in international affairs, Bilal Baloch says Gulf startups and venture capital have what it takes to mature and grow as the Iran conflict and the advent of artificial intelligence reshuffle business and geopolitics as we know them. 

“Never let a serious crisis go to waste,” Baloch tells AGBI from Palo Alto, California, where he splits his time with Abu Dhabi. 

Baloch is a partner of UAE-based Shorooq, which dubs itself as “the region’s fastest growing venture capital fund”. He leads global investing efforts into AI.

Backed by sovereign powerhouses including the UAE’s Mubadala, the Qatar Investment Authority and Saudi Arabia’s Public Investment Fund, Shorooq has gone from $2 million to $1 billion in assets under management in under a decade.

Emirati agritech company Pure Harvest, Saudi buy-now-pay-later fintech Tamara and Egyptian online grocery platform Breadfast are among the companies in Shorooq’s portfolio.

Many companies in the UAE and Gulf, especially founders with consumer-facing products, have been affected by the war and its disruption of critical commodity flows, Baloch says. 

But the impact on Shorooq’s startups hasn’t been as sweeping as it might have during the pandemic or a financial crisis.

“Those things impact the tech and venture capital ecosystem a lot more,” Baloch says. “Because they challenge the very fundamentals of an economy in a way that a security shock does not in the medium-to-long term.”

Shorooq is advising founders on its crisis playbook, which starts with ensuring they have a “healthy cashflow and runway”. 

Startups typically raise capital on a 12-to-18-month cycle, but they should now plan for up to 24 months, he said.  

“Cut where you can, streamline where you can,” Baloch says. 

He is a founder himself, having created and exited Enquire AI, a platform linking organisations with experts. He holds a doctorate in political economy from Oxford University and a master’s degree in international relations from Tufts University.

That AI is reshaping business at a time the conflict weighs on budgets has been a lucky coincidence, according to Baloch, because agents are making startups more efficient, he says.   

One of his founders told him he will need to hire 50 percent fewer engineers in the next 18 months thanks to AI. Another startup is running weekly agentic AI bootcamps for employees to learn the ropes quickly. 

Founders should also deepen relationships with existing clients, whether by extending contracts or providing discounts, and ensure their teams feel taken care of.

“Human beings and businesses are no different, they want to know that you’re there for them,” Baloch says. “No one does that better than the Middle Easterners, because they’ve got such a long history of living and working through conflict and crises.”

Domestic resilience

The presence in the Gulf of non-Western investors, entrepreneurs and professionals, who can’t easily run back to the stability of their home countries, gives places like Dubai or Abu Dhabi an unparalleled reservoir of resilience and commitment. 

“What separates your typical founder in the Middle East from your typical founder anywhere else is they have a heavy responsibility to act like a statesman,” Baloch says. “Making sure your team is safe and secure, your communication is explicit and regular, not just building and shipping products.”

A fragile ceasefire and profound uncertainty over the war’s end and what the day after will look like is forcing the region to reckon with a “new reality” of shifting alliances, while the roles of the US, Israel, Iran and Gulf states are all in play.

Investors and entrepreneurs must “take that seriously, whether they sit in Abu Dhabi or San Francisco,” Baloch tells AGBI.

The war will accelerate regional investments in critical industries, such as space, logistics, AI and defence manufacturing, according to Baloch.

These held promise before, he says, but “when you see it up front, it’s a very different ballgame, because maybe others who didn’t see it that way can come along the journey with you”. 

Baloch is bullish on the UAE because of its “unmatched ability to do what’s best for the people that live there, and actionably help and support business and security as a twin goal”.

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The close investment partnership with the US will also survive, he predicts.  

“Here in the US the last few weeks, I’ve heard more people say they’re still keen to invest in the region than those holding back,” Baloch says. 

Meanwhile Shorooq has done three “highly sought-after” deals in American AI companies since the conflict started, a testament “to the value proposition” of the region and the backing for their global AI fund from G42. 

“These young founders are thinking globally from day one,” Baloch says. 

“They are saying, I’d like to have customers in the Middle East and in Asia. They recognise AI is becoming ground-zero across the region and would love to get access to institutions and talent there, or to raise growth capital from there.”