With a staggering investment of 750.4 million Saudi Riyals, equivalent to 198 million US dollars across 25 deals, Saudi Arabia has marked the highest investment rate in its burgeoning startup sector. This surge in investment, a regional pinnacle, underscores the escalating dynamism and investor confidence in Saudi Arabian startups.
Software Leading Growth
A recent report by ‘Digital Digest’ highlighted that the majority of these funds, amounting to 492.7 million Riyals, were channeled into a pre-IPO round for ‘Sila’, a Saudi-based company. This significant capital infusion reflects the growing appetite for innovative solutions and reaffirms Saudi Arabia’s emerging status as a hub for technology-driven enterprises.
Digital service providers have also emerged as prominent fundraisers in the region, securing approximately 494.9 million Riyals across nine deals. Following closely, the fintech sector garnered 151.6 million Riyals in 12 deals, while e-commerce startups raised 68.2 million Riyals.
Regional Deal-Making
In the broader Middle East and North Africa (MENA) region, startups amassed a total of 928.5 million Riyals in March alone, bringing the first quarter’s total to 1.6 billion Riyals. Besides Saudi Arabia, the United Arab Emirates also witnessed notable investments, with 12 startups raising 147.8 million Riyals in March. Concurrently, eight Egyptian startups secured 26.5 million Riyals during the same period, highlighting the diversified and growing significance of regional players in the startup landscape.
Volume of Investments
In terms of the number of investments, Saudi Arabia led with 25 deals, followed by the UAE with 12, and Egypt with eight. This robust activity indicates the growth of the startup ecosystem in the region, with Saudi Arabia particularly emerging as an attractive destination for investors.
While male-founded startups continued to dominate the funding scene, accounting for 89.7% of total investments, startups with both male and female founders received 10% of the funds. Startups founded solely by women accounted for a mere 0.2% of the transactions.
The Impact of LEAP 2024
LEAP 2024, hosted by Saudi Arabia at the beginning of the month, played a significant role in the kingdom’s startup scene. Moreover, the announcement of billion-dollar investment funds, including a 500 million US dollar third logistics services fund in Saudi Arabia and two venture capital funds affiliated with the Saudi National Development Fund, alongside a 100 million US dollar investment by the United Arab Emirates in Gulf Capital and RDI, has significantly invigorated the market and its growth prospects.
