The Vision: A Thriving Hub of Innovation and Talent Unleashed Investment in Pearl Semiconductor – Part 2

We recently announced our latest investment in Pearl Semiconductor, a fabless semiconductor company specializing in Timing Integrated Circuits (ICs) and Reference Clocks. Pearl Semiconductor successfully secured $4.5 million in the recent funding round from Shorooq Partners, QBN Capital, Sawari Ventures and semiconductor industry veterans. This partnership marks an exciting new chapter as Shorooq Partners makes its first foray into the semiconductor industry, shaping the landscape of innovation and technology in the region.  

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Pearl Semiconductor has earned our confidence for compelling reasons. Emerging as a spin-off from Si-Ware Systems in 2020, the company brings forth a legacy spanning over 19 years in the reference clock industry. This impressive history is reinforced by a substantial collection of patents and a wealth of intellectual property, particularly in the realm of reference clock generators and Sigma-Delta Fractional-N phase-locked loops (PLLs) – systems dedicated to finely tuning frequencies.

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Guided by industry experts with decades of experience and propelled by the passion of adept engineers, Pearl has established itself as a vital player in serving the timing requirements of diverse industries, spanning from industrial and automotive sectors to networking and telecom. Pearl's vision of becoming the world's leading supplier of top-tier reference clocks and Timing ICs is founded on solid technology that encompasses innovation and differentiation, while ensuring a blend of performance, reliability, and cost-effectiveness.

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As we explore the core of our investment rationale, let's delve into the strategic elements that make Pearl Semiconductor a pivotal addition to our portfolio at Shorooq Partners.

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A Global Innovator with Technological Advancements

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Operating from both Malaysia and Egypt, Pearl Semiconductor is a technology powerhouse that's reshaping the industry and building new to market innovations for a global customer base. What sets Pearl apart is its patent-protected cutting-edge technology designed by world-class talent, allowing the company to introduce highly competitive products that only a handful of companies worldwide can deliver. While competitors would incur substantial expenses to replicate Pearl’s unique clock chiplet technology and ultra-low noise solutions, the Company leverages its technological prowess and ambitious local talent to dominate the global timing market. This strategic advantage positions Pearl Semiconductor not just for international recognition but for market leadership as a leading international player in the semiconductor industry.

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Embracing Geopolitical Significance and B2G Dynamics

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Pearl Semiconductor's strategic significance extends beyond business considerations. Anchored by a well-defined national plan supported by a substantial $1 billion investment from the Egyptian government, the company seamlessly aligns with government initiatives to develop a technology hub in the country. Geographically, its position between Africa, Asia, and Europe takes on a newfound importance. The recent geopolitical tension between the US and China have spurred supply shortages across Asia and Europe, further elevating Pearl's value proposition.

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A Synergistic Portfolio Enriching Shorooq Partners' Investment Focus

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Pearl Semiconductor stands at the forefront of innovation and relevance in today’s tech landscape, crafting products that define the future of technology. Their end products cater to a diverse range of applications, spanning cloud computing, 4G-6G technology, and the burgeoning automotive sector. Notably, not only Egypt but also key players in the GCC region, including Saudi Arabia and the UAE, are channeling investments into the semiconductor sector and adjacent areas of deep tech and innovation. Shorooq Partners has been searching for the right opportunity to enter the semiconductor industry since our establishment, and we believe Pearl Semiconductor is the correct entry. By bolstering this dynamic portfolio, we solidify our commitment to backing disruptive innovation, positioning ourselves as advocates of change within the industry.

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Catalyzing Engagement in the Semiconductor Ecosystem

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As a lead investor in Pearl Semiconductor, Shorooq Partners is well-positioned to catalyze engagement within the local and global semiconductor community. With the company’s immense potential resonating on regional and international scales, our role extends beyond capital infusion. By leveraging our established relationships across Asia, Europe, and the US, we're poised to facilitate connections with new clients and potential investors. This deeper involvement fortifies our commitment to delivering tangible value and reaffirms our position as the go-to deep tech investor in the region.

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Most importantly, we at Shorooq Partners are aligned with Pearl Semiconductor’s grand vision – one that sees Egypt as a vibrant hub teeming with highly skilled design engineers. Our ambition for the Company reaches beyond technology; it’s about unlocking the untapped potential of the vast, yet underutilized talent pool, capable of innovating differentiated products. There are approximately 50,000 engineering graduates each year in Egypt. This pool, in high demand globally, embodies Egypt’s potential to become a vital player in the semiconductor landscape.

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Ayman Ahmed, the CEO of Pearl Semiconductor, passionately underscores the recipe for success - a blend of education and thriving companies. “Shorooq Partners' investment momentum is a vital catalyst in realizing this potential, creating a virtuous cycle of growth. Over the past three decades, I have witnessed firsthand our local industry’s transformation from a barren landscape to an evolving one, which showcases the feasibility and scalability of this endeavor. The aspiration is nothing short of establishing Egypt's own Silicon Valley — a hub teeming with a multitude of companies contributing not only to the economic growth but also positively impacting individuals, families, and the nation at large. This is a journey that not only echoes international successes but also elevates Egypt's global standing, fostering a legacy of quality, excellence, and innovation.”  

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Ayman also sheds light on a prevailing trend, which is that local and regional investors are predominantly leaning towards fintech and e-commerce, driven by familiarity and resources. The intricacies of the semiconductor field often pose a barrier to investment, making it a less obvious investment choice. However, at Shorooq Partners, we are proud to defy convention by supporting a fabless semiconductor company like Pearl Semiconductor. Should the Company continue its trajectory of success, we believe this achievement could catalyze a shift in regional investor perspectives.

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Though this may be our first venture into the semiconductor domain, our investment echoes our dedication to innovation, progress, and lasting impact in the technology sector.

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Join us in this journey of inspiration and transformation. Reach out to us today.  

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