The UAE's Crypto Powerhouse: Munaf Ali, Co-Founder And Group Managing Director, Phoenix Group As his enterprise heads toward an initial public offering on the Abu Dhabi Stock Exchange, the UAE-based entrepreneur reveals what it takes to become an industry leader.
By Tamara Pupic •
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With its imminent listing on the Abu Dhabi Securities Exchange (ADX), UAE-based crypto and blockchain conglomerate Phoenix Group will soon join the ranks of those rare businesses that have managed to drive a whole market forward. Not only is the company's planned initial public offering (IPO) aligned with Abu Dhabi's Economic Vision 2030, it is also expected to positively contribute to the UAE capital's positioning on the global tech landscape. As Munaf Ali, co-founder and Group Managing Director, Phoenix Group, put it, "Our decision to go public is driven by the desire to position Phoenix as an institutionalized and regulated entity within the technology and cryptocurrency space, showcasing its UAE roots, as well as its commitment to operating at the highest standards."
According to Ali, the decision to list Phoenix Group on the ADX was made "not only because it is our home, but because the UAE and its leadership have shown the global marketplace that it is a truly respected center of capital along with the world of crypto." He adds, "Every player in the world of crypto, Web3, decentralized finance (DeFi), centralized finance (CeFi), want to be a part of what the UAE has to offer, and while the doors are open to everyone, they have the perfect attitude, which is to cherry-pick the best of the best, thereby ensuring that it remains one of the most respected jurisdictions not just in the region, but in the world. It serves as a testament to the fact that despite being in the cryptocurrency industry, we are an institution."
Ali, along with co-founder Bijan Alizadeh, launched the Phoenix Group in 2017 with an aim to contribute to a decentralized future for all, and in a span of just six years, the Group has grown to consist of 29 unique companies. These operate in the following distinct verticals: mining and hosting services, retail distribution of high-performance crypto equipment, digital mining services, and crypto exchanges- the last of which is characterized by M2, its Abu Dhabi-based regulated crypto investment platform. "Since its inception, Phoenix has secured a leading position in the crypto-mining space on a global front," Ali notes. "With its first-mover advantage in the digital mining industry, our ability to secure competitively priced utilities at quasi–governmental levels, access to equipment, and access to capital that has been utilized in the most cost- effective manner, the Group yields exemplary returns and revenue."
In the US and Canada alone, the Group currently operates approximately 100 megawatt facilities, and it is looking to add an additional 20 megawatt facilities in Canada. Plus, the company has secured power agreements in the USA that will enable it to launch 50 megawatt and 45 megawatt facilities in the near future. "To achieve this, we have purchased a considerable worth of mining equipment and air-cooling miners from WhatsMiner, a brand of mining hardware and chip design developed by Bitcoin mining hardware manufacturer MicroBT, and we've also been granted the distribution and exclusive rights by WhatsMiner for its entire product line over an extensive territory which includes the UAE, GCC, Egypt, Turkey and Kenya," Ali adds.
When it comes to its mega projects for prominent stakeholders, Phoenix Group prides itself on being a preferred crypto and blockchain industry partner for the government leaders across the GCC region. "We are key stakeholders who operate and manage the largest crypto mining site in the region in Abu Dhabi, which is designed to leverage advanced technologies and infrastructure to facilitate efficient and effective cryptocurrency mining operations," Ali reveals. "This one-of-a-kind project, the largest of its type in the entire region, was not only designed in-house, but built under the group's supervision, and now remains fully operated by the Group."
Phoenix Group has also recently partnered with the Muscat- based Green Data City to develop a 150-megawatt crypto mining farm in Oman, and it is expected to be operational by the second quarter of 2024. In addition, Ali says, the Group is also in advanced level discussions to establish a full-fledged high-performance data center in Egypt.
Such endeavors have also got Phoenix Group to explore opportunities in the energy domain. "Having access to large amounts of sustainable and cheap power is always a vital component in this industry, but even more of a necessity as we move towards a digital economy," Ali explains. "That is why the Group's strategy for 2024 will be to focus a considerable amount of its resources, both human and capital, in the energy sector. We will focus on power generation for our own consumption, as well as for other complimentary business verticals within the same industry."
As the Group thus looks forward to a promising future, Ali, when reflecting on his enterprise's early days, believes that it has grown in line with the "fortune favors the brave" mantra. "This is so true in life," he says. "It is all about taking risks- calculated risks. Phoenix as a Group was long born before even the first employee ever came on board. At its inception, it was just Bijan and myself, doing everything, trying to navigate this space, and learn what we had stumbled across. The fact the industry was so new, so small, was a challenge, and we took risks much larger than we ever would today, which is why we have reached the levels today, where our other peers have somewhat fallen behind. Today, the Group operates with a different level of structure and governance to ensure that we not only understand risks, but are also best placed to overcome them."
Munaf Ali, co-founder and Group Managing Director, Phoenix Group. Source: Phoenix Group
Back in 2017, when he was launching Phoenix Group, Ali had brought a wealth of professional experience to the nascent crypto and blockchain space- he had then been working for more than 20 years in capital markets, which encompassed executive banking roles in Citigroup in London and Dubai, as well as the business know-how of a seasoned real estate developer who delivered luxury branded resort hotels in the Eastern Caribbean.
When asked to share lessons from his career that'd benefit entrepreneurs today, Ali's advice starts by noting how imperative it is to invest time and effort in understanding the industry and the landscape they operate in, and especially so if it is the fast-paced world of crypto and blockchain. "If you think Wall Street and the world of finance is dynamic, you need to understand that the world of crypto is Wall Street x10- not only does it operate 24 hours around the clock, but seven days a week," he says. "Whilst I don't have a crystal ball, you have to be a visionary to try and understand what the future may hold, or to be one of the few who can try and shape the future. I strongly believe that it will not be the world of finance that shapes crypto, but the world of crypto that will change the world's financial markets. The cutting edge technology of blockchain, DeFi, and everything that this ecosystem brings can and will revolutionize the world of finance as we know it."
Ali also states that building and maintaining relationships with all stakeholders involved is key to success in the crypto domain. "We at Phoenix don't view our industry peers as competitors for one simple reason – we collectively are a bigger force and stronger in numbers with a common goal when it comes to market awareness and education, navigating the regulatory hurdles we all face, and achieving the global acceptance and adoption that we all would like to see. So, be it another Bitcoin miner or another crypto exchange, we may have different market shares and revenues, but it is clear we all share the same goal and vision– to bring the world of crypto to the fingertips of every single person."
Here, Ali adds that one crucial pillar of Phoenix Group's success is thanks to it having the best of the best on board the enterprise– and this includes everyone from its 400-strong team, to its board. Now, as Phoenix Group gets ready for its IPO, Ali reveals that the company is also implementing additional governance, controls, and processes across the organization to secure its future. "Transitioning to a public company is not a decision taken lightly, as Bijan and I have always treated our company and staff like family," he explains. "While we move forward with the IPO, we hope to maintain our startup mentality, hustle, and speed. However, we acknowledge that operating as a public entity comes with more controls and processes in place."
In line with this, finding the right balance between maintaining the Group's entrepreneurial spirit and adhering to the requirements of being a public company will be high on Ali's agenda. "To be honest, a genuine concern is the potential red tape and corporate bureaucracy, which would be expected of any publicly listed entity," he admits. "This is something to be expected, irrespective of which industry you are in when it comes to listing. We believe that we are as prepared as we can be, by building our relationships with all the regulators and authorities since the start of the year to ensure we are always in compliance."
At the end of the day though, such efforts are in line with Ali's vision to establish the Phoenix Group as a globally recognized leader in its industry. "I aim to create an organization that consistently delivers unprecedented returns to our stakeholders, shareholders, investors, and the dedicated team that has been our backbone throughout our journey," he declares. "By striving for excellence and innovation, we will position Phoenix as a frontrunner in the market, gaining recognition and respect on a global scale. Our commitment to delivering exceptional value and results will ensure that our stakeholders, including customers, partners, and employees, benefit from their support and association with us. Together, with the unwavering support of our team, we will work tirelessly to achieve our vision, and create a prosperous future for Phoenix and all those involved."
Munaf Ali, co-founder and Group Managing Director, Phoenix Group. Source: Phoenix Group
The executive summary Q&A with Munaf Ali
Q: What is your advice for those looking to invest in the world of crypto?
A: "The key message for investors is that the future of cryptocurrency holds great promise, and we believe it is well poised for mass adoption. Cryptocurrencies have gained significant traction, and they have become an integral part of the financial landscape, so its potential for growth and innovation is undeniable. Cryptocurrencies offer numerous advantages, such as decentralization, security, and efficiency in transactions. It has the potential to revolutionize various industries, including finance, supply chain management, and digital identity verification. As more businesses and individuals adopt cryptocurrencies, the demand and utility of these digital assets are likely to increase. However, it is important for investors to approach cryptocurrencies with caution and conduct thorough research. The market can be volatile, and risks are inherent. It is advisable to diversify investments and seek professional advice to make informed decisions. Overall, while the cryptocurrency market may experience volatility, the underlying technology and its potential applications indicate that it is here to stay. Investors who understand the risks and opportunities associated with cryptocurrency can position themselves to benefit from its promising future."
'TREP TALK: Munaf Ali shares his tips for entrepreneurs in the UAE and beyond
1. DREAM BIG, AND EXECUTE "The UAE offers exceptional opportunities for entrepreneurs and businesses. It is a place where ambitious individuals can turn their dreams into reality through hard work and determination. Believing in your vision, especially when others may doubt it, is crucial. The ability to execute your vision is equally important, as it requires strategic planning, adaptability, and perseverance."
2. SEEK OUT A PARTNER FOR YOUR ENTREPRENEURIAL JOURNEY "Choosing the right co-founder is a critical decision. A co-founder should share a common goal, and have a dynamic relationship with you, where you both complement each other. Alignment in values, vision, and work ethic is essential for a successful partnership. Together, you and your co-founder can drive the company forward, and overcome challenges."
3. GET THE RIGHT PEOPLE AROUND YOU "Building a strong and capable team is vital. Your team members play a significant role in the success of your business. Hiring individuals who are aligned with your vision, and possess the necessary skills and dedication, can contribute to the growth and achievement of your goals. Nurturing a positive team culture and fostering collaboration can enhance productivity and innovation within your organization."
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