Foreword from our CEO in the Annual and Sustainability Report 2020 – 21
The year 2020 was undoubtedly one of the most eventful in memory. Despite the myriad of obstacles brought on by the COVID-19 pandemic, a global economic meltdown was averted. This was not by chance. It was, rather, the result of the determination, collaboration, and resilience exhibited by governments, businesses, and communities around the world. This report showcases Crescent Enterprises’ approach to tackling the major challenges and opportunities of the past year. We also share our aspirations as the world begins to contend with the long-term economic and social implications of the pandemic.
Crescent Enterprises registered a solid annual performance thanks to our disciplined diversification strategy. The spread of our portfolio enabled us to mitigate the pandemic’s effects on our business performance and impact.
We promptly responded to the disruption of the pandemic by promoting greater collaboration across our operations and investments to capitalise on all available synergies. We also continued the expansion of our portfolio across markets and regions by investing $49 million in new ventures, and increasing our reach to 45 businesses and investments, up from 39 in 2019. In addition, we increased our asset base by 10%, to $1.36 billion.
Within our CE-Operates platform, Gulftainer’s new leadership enabled uninterrupted supply chains and maintained all planned infrastructural investments to support global communities throughout the pandemic. Our logistics provider, Momentum Logistics, expanded into the United States to cater to a more diversified client base and provide end-to-end supply chain management solutions for Gulftainer’s operations in Delaware and Florida.
Our substantial private equity holdings, under CE-Invests, forged new, long-term partnerships that enhanced their offerings and geographic footprint. The funds we are invested in also initiated several impressive exits in 2020, such as TVM Capital Healthcare’s exit of Cambridge Medical & Rehabilitation Center.
CE-Ventures, our corporate venture capital platform, continued to invest in high-growth companies and venture capital (VC) funds around the world, making 11 new investments with a focus on fintech, supply-chain, and enterprise software. To date, CE-Ventures has deployed over $140 million and has an active portfolio of 34 companies and VC funds in the US, the MENA region, and Southeast Asia. Our venture capital investments achieved significant growth, ending the year at a 3.0 multiple on invested capital (MOIC) compared with 2019’s MOIC of 1.6 times.
The subsidiaries under our corporate incubator, CE-Creates, focused on establishing foundations for resilient growth. ION, our sustainable mobility subsidiary, entered multiple partnerships to expand its reach and catalyse product innovation. Kava & Chai, our specialty coffee and teahouse chain, expanded its online sales channels to reach a much wider customer base.
Employee safety and well-being
At the onset of the COVID-19 outbreak, Crescent Enterprises swiftly launched internal precautions to raise awareness and curb the spread of the virus, this included the introduction of an extended telecommuting programme. We also encouraged all employees to get vaccinated prior to our official return to the office in June 2021. We continue to monitor public health developments and spare no effort to ensure the safety and wellbeing of our employees and their families.
We firmly believe that the success of tech-enabled start-ups and innovation will be key to driving socioeconomic progress post– COVID-19. As such, Crescent Enterprises remains fully committed to promoting and nurturing high-impact entrepreneurship throughout our business activities and engagements.
Gulftainer, for instance, held its inaugural Future of Ports Startup Challenge, in 2020, to identify ambitious start-ups from around the world that have the potential to transform port management and logistics operations. The Challenge showcased the massive potential for large organisations to tap into start-up ingenuity to accelerate their own digital transformations.
Also, CE-Ventures and the Sharjah Entrepreneurship Centre (Sheraa) demonstrated the value of long-term public-private partnerships in driving innovation during crises, by supporting start-ups with equity-free grants throughout the pandemic.
The manifold socioeconomic challenges our region’s youth have inherited, including high levels of unemployment, political instability, and humanitarian crises, have been exacerbated by the pandemic. Crescent Enterprises recognises the significance of cultivating opportunity and fostering hope for young people in our region, and we strive to empower them through our various community initiatives.
As part of our corporate citizenship efforts, and through our longstanding partnerships with institutions such as Sheraa and the American University of Sharjah (AUS), we continue to support youth and entrepreneurs by helping them develop critical soft skills and by facilitating networking opportunities. Our efforts stem from our commitment to the UAE National Agenda, which focuses on instilling an entrepreneurial culture in youth to cultivate a new generation enriched with leadership capabilities, innovation and creativity, responsibility, and ambition.
In 2021, our four platforms continue to deliver on their strategies. Within CE-Operates, our ports and logistics businesses are accelerating their digital transformation and pursuing their expansion plans to thrive in an increasingly competitive industry.
Through CE-Invests, we continue to expand our investments programme into new geographies while remaining true to upholding environmental, social, and governance (ESG) values. We also expect further successful exits within our private equity holdings within the next 6 months.
CE-Ventures continues its strategy of investing in high-growth companies and their respective founders. At the same time, the platform is expanding its focus to encompass biotech and deep tech as we look to double our VC investments in start-ups to over $250 million by 2022.
Our purpose-driven incubator, CE-Creates, is pushing ahead with the development of a growing range of early-stage concepts into socially relevant, economically viable, and scalable ventures aimed at spawning the next generation of operating businesses for Crescent Enterprises. It continues to flourish as a manifestation of our dedication to fostering entrepreneurship, innovation, and lasting societal impact.
I remain grateful for the steadfast engagement of the whole Crescent community, as well as that of our affiliates, portfolio companies, and partners. Your determination and skills have enabled us to navigate these unprecedented times and continue to serve our communities to the best of our abilities.
Looking ahead, I strongly believe that the post–COVID-19 future will reward businesses that have emerged from the pandemic with sustainable business models and responsible operations. I am confident that the heightened collaboration we have fostered with our stakeholders will help us spearhead our journey to inclusive leadership, global competitiveness, and enhanced shared value.