Funding Trends: Saudi Startup Ecosystem Rapidly Evolving

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MAGNiTT in partnership with Saudi Venture Capital Company (SVC) in their latest report highlight the funding trends and key highlights of the startup ecosystem in Saudi Arabia, which is quickly developing into a leading ecosystem across the MENA Region.

The startup ecosystem in Saudi Arabia is growing quickly, with an increase in deals, funding, number of investors and government initiatives, among other things. The first half of the year saw a flurry of activity, which is highlighted in this report.

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“The venture capital scene in the Kingdom of Saudi Arabia is rapidly evolving, due to the many governmental initiatives launched towards achieving the Saudi Vision 2030. We are seeing more such initiatives to foster entrepreneurship than ever before. They have stimulated venture investments in startups, especially Saudi Arabia-based startups.”


Engr. Saleh bin Ibrahim Al-Rasheed – Chairman at Saudi Venture Capital Company (SVC)


$40M invested in Saudi-based startups in H1 2019

The first half of 2019 saw $40M invested in Saudi-based startups, which is a record amount of total funding in any first half of the year. Notable investments include the ones in Noon Academy, the EdTech startup that raised its $8.6M Series A round, as well as Nana, the grocery delivery company that raised $6.6M in its Series A round.

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Total funding increased by 82% in H1 2019

Not only was H1 2019 a record first half of the year, total funding increased by 82% from H1 2018 to H1 2019, indicating increased appetite from local and international investors in Saudi-based startups, as well as startups beginning to graduate to later stages of development.

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“Saudi Arabia is currently witnessing an increase of the quality and quantity in the deal flow of startups, as well as more professional angel investors and venture capital funds are arising. We are thrilled by the distinguished entrepreneurs that are creating fast-growth and scalable startups.”


H.E. Dr. Nabeel KoshakCEO at Saudi Venture Capital Company


26 deals took place in Saudi Arabia in H1 2019

In total, there were 26 investment deals in Saudi-based startups in H1 2019. Similar to total funding, this was a record number compared to any first half of the year previously, with notable new investors such as Saudi Venture Capital Company (SVC) and MiSK 500 MENA Accelerator emerging onto the scene.

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Number of deals increased by 44% in H1 2019

With 26 investment deals, H1 2019 saw an increase of 44% compared to H1 2018, as more startups are set up, going through accelerator programs, and receiving invest- ment from venture capital (VC) firms and other institutional investors. This number is expected to increase in H2 2019, as more institutions come in and are set up.

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“We are currently undergoing what will likely be considered the tipping point of venture capital activity in Saudi Arabia. VC investments in the Kingdom are growing rapidly, and our optimism for the future of Saudi Arabia’s overall economic and entrepreneurship ecosystems is growing with it. Many factors propelled this growth: sizable regional exits for companies primarily driven by Saudi Arabian demand validated the venture capital model as a viable investment vehicle. Increasing demand for digital solutions across industries is matched with an impressive rate of adoption by both the public and private sectors. Saudi Arabia’s internet users, typically seen as mostly consumers, are now becoming active contributors to the digital economy and creating economic value using technology. ”


Abulrahman Tarabzouni Founding Chairman at Saudi Arabia Venture Capital and Private Equity Association


30 institutions invested in Saudi-based startups in H1 2019

A total of 30 institutions invested in Saudi-based startups in H1 2019, with both local Saudi venture capital firms, accelerators and other institutions, as well as international investors participating in funding rounds. Active local investors include Ra’ed Ventures, Wa’ed Ventures, Riyad Taqnia Fund (RTF), Saudi Venture Capital Company (SVC), and STV, among others.

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Funding Evolution

The startup funding landscape in Saudi Arabia has accelerated over the past years, with H1 2019 being a record first half of the year in both total funding ($40M) and number of deals (26) in the Kingdom.

Key Highlights:

Total funding in Saudi Arabia increased by 82% from H1 2018 to H1 2019

The number of deals in Saudi Arabia increased by 44% from H1 2018 to H1 2019

With new investment institutions, accelerator programs and other initiatives being set up in the Kingdom, 2019 is expected to surpass 2018 in terms of number of deals and total funding

Country Comparison

The Saudi Arabia ranks among the top Middle Eastern and North African (MENA) countries in terms of total funding and number of deals, taking the third spot in total funding and fourth spot in number of deals in H1 2019.

Key Highlights:

Saudi Arabia accounted for 11% of number of deals in MENA in H1 2019, up 1% from H1 2018

The Kingdom also accounted for 9% of total MENA funding in H1 2019, up 1% from H1 2018

Through strategic initiatives on multiple fronts, Saudi Arabia aims to become the entrepreneurship hub in the region

Industry Comparison

Similar to other countries in the MENA region, e-commerce and delivery & transport are among the largest industries in Saudi Arabia by total funding and number of deals. Other industries, such as Agriculture, Data Analytics, Education, and Food & Beverage also make the top 5 by total funding and/or number of deals.

Key highlights:

E-commerce has historically been among the highest funded industries in the MENA region
Food and grocery delivery startups saw an influx of capital in H1 2019
Education ranked 3rd in total funding, mainly due to Noon Academy’s $8.6M funding round

H1 2019 Deals

Noon Academy, the Riyadh-based EdTech startup, raised the highest disclosed funding round in Saudi Arabia in H1 2019, raising $8.6M from Saudi-based investors STV, Ra’ed Ventures, and Alisamiah Investment.

The top 5 funding rounds is completed by Nana Direct, a grocery delivery startup; Foodics, a POS system start- up that offers food order management solutions; Red Sea Farms, the AgriTech startup that spun out of KAUST and develops saltwater-tolerant crops and greenhouses; and GetMuv, a fitness education and facilitation app.

“The venture capital scene in the Kingdom of Saudi Arabia is rapidly evolving, due to the many governmental initiatives launched towards achieving the Saudi Vision 2030. We are seeing more such initiatives to foster entrepreneurship than ever before. They have stimulated venture investments in startups, especially Saudi Arabia-based startups.” – Engr. Saleh bin Ibrahim Al-Rasheed – Chairman at Saudi Venture Capital Company (SVC)

“Saudi Arabia is currently witnessing an increase of the quality and quantity in the deal flow of startups, as well as more professional angel investors and venture capital funds are arising. We are thrilled by the distinguished entrepreneurs that are creating fast-growth and scalable startups.” – H.E. Dr. Nabeel KoshakCEO at Saudi Venture Capital Company (SVC)

“We are currently undergoing what will likely be considered the tipping point of venture capital activity in Saudi Arabia. VC investments in the Kingdom are growing rapidly, and our optimism for the future of Saudi Arabia’s overall economic and entrepreneurship ecosystems is growing with it. Many factors propelled this growth: sizable regional exits for companies primarily driven by Saudi Arabian demand validated the venture capital model as a viable investment vehicle. Increasing demand for digital solutions across industries is matched with an impressive rate of adoption by both the public and private sectors. Saudi Arabia’s internet users, typically seen as mostly consumers, are now becoming active contributors to the digital economy and creating economic value using technology. ” – Abulrahman TarabzouniFounding Chairman at Saudi Arabia Venture Capital and Private Equity Association

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