LAB7, the venture building arm of Aramco, has a dual mission: to help deep tech startups scale and to turn Saudi Arabia's Dhahran province into a destination for frontier entrepreneurship.
LAB7, the venture building arm of energy company Aramco, was set up with a challenging, two-fold mission: On the one hand, to close the gap for deep tech startups that struggle to reach the market despite strong technologies. Second, to help turn the Eastern Province of Saudi Arabia — specifically Dhahran — into a destination for deep tech entrepreneurship.
Fahad F. Al Furaih (pictured, above) who led the launch of the Saudi Arabia-based unit in 2024 says this is not a corporate social responsibility initiative but a “commercially-driven organisation”.
Foundations: From concept to launch
The idea for LAB7 began taking shape around 2020, as an ambitious project involving the construction of a building that would serve as a hub for the venture building operations. The facility is located right next to the King Abdulaziz Center for World Culture (Ithra), a major public landmark. This positioning is deliberate, says Al Furaih, signalling that LAB7, too, is open and accessible to the public.
Dhahran, in the Eastern Province of Saudi Arabia is dominated by Aramco’s headquarters and home to the STEM and engineering-focused King Fahd University of Petroleum & Minerals (KFUPM), but the startup ecosystem in the region is still relatively nascent. “We see that there’s a huge need for a deep tech venture builder in that ecosystem,” says Al Furaih. “We are a key player in uplifting and bringing the run to be the destination for deep tech startups.”
In parallel with the construction of the LAB7 facility, Al Furaih and the LAB7 team were setting up the venture builder’s playbook, from governance model to corporate structure, investment committees and hiring the team.
“We were wearing multiple hats at the same time,” Al Furaih recalls. “By the time we finished the construction, we were ready to hit the ground running with all the resources in place,” he says.
Even before launch, the team tested its own venture-building processes with internal projects. The team looked initially at whether they could build companies based around ideas generated within Aramco. Two such internal ventures — in self-cleaning solar panels and engineering code compliance checks — were created and went on to not only win awards but also to be commercialised through the company’s first IP-for-equity transactions.
Ultimately, however, the team decided that the process of building multiple technology-based startups would be faster if teams and ideas were sourced from outside.
“Internal ventures were a great way to test our model, not the way to fill the whole pipeline. External startups give us the agility and talent access we need to move at deep tech speed.”
“We proved that we could originate strong technologies internally, but we also proved that it’s not the most scalable way to reach our goals. Internal ventures were a great way to test our model, but not the way to fill the whole pipeline,” says Al Furaih.
“We realised that if we tried to generate everything from within, we would never meet our ambitions. External startups give us the agility and talent access we need to move at deep tech speed,” he says.
The second prong of the team’s mission — building up Dhahran’s technology ecosystem — also meant it made sense to bring in external startups.
“You don’t build a destination ecosystem by keeping everything behind the fence. If we wanted Dhahran to be a deep tech hub, we had to bring in the most promising founders from outside,” says Al Furaih.
Scouting: A targeted search for startups
LAB7 treats deal sourcing as a design problem, not a funnel to be filled. It runs an online portal where startups can apply, but the team is clear-eyed about its limitations.
“Usually the quality isn’t as high as it is when you really go and search for the right startups,” says Al Furaih.
Are you running a corporate venture builder?
Join our webinar on Wednesday August 19 to hear how Bosch, Arup and Toyota approach venture building challenges.
Instead, LAB7 leans heavily on curated, partnered challenges with reputable intermediaries as a way to surface “quality deal flow”. Last year it co-ran two global calls with Enterprise Singapore that attracted more than 110 applications, including an energy storage challenge and yielded Halide Energy, for long duration energy storage, from Finland as a portfolio company.
This year, this was followed with Uplink, a World Economic Forum challenge focused on industrial AI and semiconductors, again using a structured competition format, expert partners and a multi-stage gating process to pre-qualify founders and technologies.
Alongside these public challenges, LAB7 runs a more forensic search for ideas and teams that haven’t yet surfaced in the usual startup circuits. The team actively mines IP databases to identify early deep tech plays where founders may still be mainly in the lab and then approaches them proactively. This reflects a deliberate “quality, not quantity” stance.
“We’re quite selective,” says Al Furaih. “We really scout for the right opportunity and the right quality,” he explains.
Staffing and culture: A venture builder that thinks like a startup
LAB7 engineered its own culture to feel more like a startup than a corporate outpost, even though it sits within one of the world’s biggest companies: the team is expected to behave as a service provider for founders, not as a gatekeeper, and decisions are made with an explicit bias towards agility over bureaucracy.
“We needed to be the service provider to startups,” Al Furaih says.
Most staff were headhunted from outside, with corporate transferees admitted only if they demonstrated a genuinely entrepreneurial mindset, so that over time the “venture builder” mentality became dominant.
Structure: How LAB7 works with startups
LAB7 is built around a development-intensive, non-cohort model. Instead of processing large batches of companies with a fixed programme, it selectively backs a limited number of deep tech ventures with tailored support. Dedicated to pushing the boundaries of technology, the venture builder provides a system of support, collaboration, and expertise for accelerated product launch and market access.
The organisation has around 70 employees, with more than half focused on technical development. They are embedded closely with the startups in the early stages, acting as an extension of the startups’ own teams. In later stages of development as the startups begin to scale, other LAB7 team members step in to help with commercial functions like hiring, marketing, product development and sales.
“We inject the needed resources into the startup teams, both technical and the commercial standpoint, to be part of their team to take them all the way until the finish line,” says Al Furaih.
LAB7 has the capacity to support around 25 startups in parallel. “Each person within our product development team is supporting multiple startups at the same time,” Al Furaih notes. The support is time-bound and oriented toward market validation and external funding.
One feature of LAB7’s support is that from day zero, the team brings in industry voices to ensure it focuses on technology with real commercial value and interest to outside investors. Aramco’s CVC arm and VC experts have seats in the investment committee, so that every deal is screened through both corporate and market lenses.
Al Furaih is keen for the startups built with LAB7 to avoid being “a great technology that is looking for a problem”. Rather, he wants to set startups up for success by teaching them to find the right customers and learn to speak their language.
Measuring success: A commercial scoreboard
Al Furaih was fortunate in having strong support from senior leadership when setting up LAB7, which helped give the unit some autonomy and freedom to act, away from some of the constraints of the larger corporation.
However, it is a freedom he is conscious of needing to earn by producing good results — a pressure that is felt “on a daily basis”. It was important to prove early that the ventures the unit created could progress to market, gain external customers, become acquisition targets and realise rising valuations.
Ultimately, LAB7 measures its own success not by how many projects they run, but how many go on to become viable businesses that can attract further venture funding from outside LAB7.
“Especially in deep tech, success is not about building, it’s about the value that you create afterwards.”
“Especially in deep tech, success is not about building, it’s about the value that you create afterwards,” Al Furaih says. “Our success is when others trust what we have done, and they are willing to put their money into that company.”
The team tracks product development milestones, performance improvements and “successful pilots”, but the real scoreboard is commercial: how many customers the startups secure, how much follow-on capital they raise, and how that translates into “a financial multiplier into the startup”. That logic is reinforced by LAB7’s own mandate as a for-profit unit.
LAB7 is not waiting for a distant IPO cycle: LAB7 expects to be able to exit earlier, aiming broadly at a typical VC cycle of eight years, but with flexibility to recycle capital via secondary sales when appropriate. A dedicated “venture growth” team stays with companies beyond the intensive build phase, helping them land pilots, secure contracts, and structure fundraising rounds – all with an eye on creating those external validation points that underpin both startups and LAB7 returns.
Looking ahead, LAB7 is preparing to scale up on the back of its early success stories. Strategically, the focus remains on deep tech – sustainability (including energy storage, CCUS, advanced manufacturing and materials, and industrial AI – sourced through a mix of global challenges and proactive IP scouting.
Maija Palmer
Maija Palmer is editor of Global Venturing and puts together the weekly email newsletter (sign up here for free).
