In recent years, Saudi Arabia has become a significant player in the global startup scene. Ambitious reforms, substantial investments, and a strong entrepreneurial spirit drive this growth. Various sectors, including fintech, e-commerce, health tech, and renewable energy, are gaining momentum within the kingdom's startup ecosystem. This overview dives into the investment landscape contributing to Saudi Arabia's successful startup landscape, the success stories, and the latest key developments.

Tracking Investment Growth in the Saudi Arabian Startup Ecosystem

There have been notable fluctuations across various metrics in the Saudi Arabian startup ecosystem in recent years. The number of deals increased from 138 in 2021 to 154 in 2022 before slightly decreasing to 145 in 2023. Correspondingly, funding raised also saw a significant rise, climbing from $647 million in 2021 to $907 million in 2022, and then experiencing a substantial jump to $2.3 billion in 2023. The number of exits increased steadily: there were 7 in 2021, including Boonus being acquired by Resal; 8 in 2022, like Jahez buying The Chefz for $172.9 million; and 9 in 2023, such as Integrative Health acquiring Nala.

Saudi Unicorns

Tabby

Tabby is a payments and shopping app that allows customers to pay in installments, giving them more financial freedom and control over their spending. Initially headquartered in the UAE before moving to KSA, the app has partnered with over 30,000 global brands, such as H&M and Adidas, and has gained over 10 million users across Saudi Arabia, UAE, Egypt, and Kuwait. With $1.7 billion raised over 13 rounds, including a Debt Financing round in 2023, Tabby is continuously revolutionizing the shopping experience.

Tamara

Tamara is a leading shopping and payment platform in the GCC region, enabling customers to pay in installments. Founded by Abdulmajeed Alsukhan, Turki Bin Zarah, and Abdulmohsen Al Babtain, Tamara boasts 6 million customers and has partnered with over 15,000 merchants, including SHEIN and IKEA. Since its launch in 2020, Tamara has raised a total of $955.6 million over 8 rounds, with its latest Series C funding in 2023.

Key Developments In 2024

In 2024, Saudi Arabia's investment landscape has witnessed significant developments across various sectors. Aramco has allocated an additional $4 billion to its global venture capital arm, Aramco Ventures. Meanwhile, Gulf Capital from the UAE has partnered with the Research Development and Innovation Authority (RDIA) to invest over $100 million in the Saudi tech sector over the next five years. Additionally, Riyad Capital has launched the "1957 Ventures" investment fund, backed by Riyad Bank, to drive transformative growth in the fintech sector and accelerate the Kingdom's digital transformation with innovative business models.

In a push to boost the gaming and esports sectors, the National Development Fund (NDF) and the Social Development Bank (SDB) of Saudi Arabia have established two venture capital funds worth $120 million. Additionally, BIM Ventures and Japan's SBI Holdings have partnered to launch a $100 million joint investment fund to support Saudi startups by providing funding, guidance, and mentoring. In the healthcare sector, UAE-based TVM Capital Healthcare closed a $250 million Afiyah Fund LP aiming to support KSA-based healthtech startups. These strategic investments highlight Saudi Arabia's commitment to fostering innovation and growth across multiple industries.

Transitioning to notable developments among startups, SaaS provider Salla raised $130 million in a pre-IPO round led by Investcorp, Sanabil Investment, and STV.

In conclusion, Saudi Arabia's dynamic startup ecosystem and strong investment landscape are undergoing significant growth and transformation. Strategic investments in various sectors, including fintech, healthcare, gaming, and technology, demonstrate the Kingdom's dedication to promoting innovation and economic diversification. With substantial funding from both local and international investors, Saudi Arabia is establishing itself as a leading hub for entrepreneurial activity and technological advancement in the Middle East, advancing its vision for a diversified and sustainable economy.