Saudi Arabia’s PIF sets up company to boost space sector

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has launched a new company to advance the growth of the kingdom’s space and satellite sector by developing local capabilities.

The new company, Neo Space Group (NSG), will invest in local and international assets and capabilities, as well as venture capital opportunities to catalyse the advancement and localisation of sector-specific expertise.

“The establishment of NSG marks an important milestone in the development of the growing satellite and space sector in Saudi Arabia and the ambition to be a leading commercial player in the global satellite sector,” said Omar Al-Madhi, co-head of MENA Direct Investments at PIF.

“It will drive economic expansion in Saudi Arabia within several related strategic sectors while advancing the localisation of vital industries.”

PIF said, in a statement, that NSG is aimed at developing and boosting commercial space operations in Saudi Arabia while providing innovative satellite and space solutions globally.

NSG will have four business segments including satellite communications, earth observation and remote sensing, satellite navigation and Internet of Things and a space-focused venture capital fund.

The company is expected to contribute to the development and deployment of the latest cutting-edge technologies in the space industry.

Meanwhile, the development of the aerospace sector is in line with Saudi Arabia’s broader strategy to unlock the potential of promising sectors and support economic diversification away from heavy reliance under Vision 2030.

Earlier this year, PIF set up Alat to sign deals with international players and invest in large industrial firms that Saudi Arabia wants to see set up operations locally. The investment firm plans to invest $100bn by 2030.

Alat unveiled two new business units in May – electrification and artificial intelligence infrastructure – to strengthen the global electricity grid technology and meet the growing demand for advanced AI infrastructure.

Meanwhile, PIF is central to Crown Prince and Prime Minister Mohammad bin Salman’s plans to diversify the economy away from reliance on oil revenues by building new industries and investing in infrastructure development projects.

Since 2017, the $925bn sovereign fund has created 94 new companies and over 644,000 direct and indirect jobs. Last October, PIF launched its Managers’ Gate platform and the Portfolio Management Development Program – a digital platform for collaboration between the fund and external fund managers.

PIF accounted for about a quarter of the almost $124bn spent by sovereign wealth funds worldwide last year, a Global SWF report showed in January.

The fund owns stakes in tech companies such as ride-hailing firm Uber Technologies, soccer teams including English Premier League’s Newcastle United, electric carmakers Lucid and Ceer and is funding a host of new cities in the desert such as the $500bn futuristic NEOM City and the Red Sea Development Company’s mega tourism project.

Read: BlackRock to launch PIF-backed Saudi investment platform