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Aramco-backed US$500 million venture capital fund Wa’ed Ventures has partnered with Entrepreneur Middle East and Lucidity Insights to publish a comprehensive report on the evolution and current state of the startup ecosystem in Saudi Arabia.
The special report titled The Evolution of the Saudi Startup Ecosystem: 2010-2022 hosts perspectives and insights from many of the Kingdom’s most active investors, highlights new investment trends and critical milestones hit by the KSA’s fast-growing startup ecosystem, and spotlights a handful of interesting startups coming out of the country.
Fahad Alidi, Managing Director, Wa’ed Ventures, said, “Over the past few years, the Saudi entrepreneurial ecosystem has undergone a transformational leap due to the unprecedented support from regulators, investors, and startup founders whom together established an unshakeable triplicity that placed the local innovation scene on the map.”
It’s a significant year to draw a line in the sand as a benchmark year for the Kingdom’s tech ecosystem, as 2022 was the first year Saudi startups collectively raised over $1 billion in funding. It is a remarkably quick rise, when one only needs to look back five years to see a time when Saudi-born startups raised just over $50 million in a 12-month period. It’s no wonder then, that 90% of the Kingdom’s venture capitalists were established after 2017. It’s an even more astonishing feat when one compares the speed of Saudi’s tech ecosystem growth to neighboring regional frontrunner, the United Arab Emirates, who only broke through the $1 billion ceiling just one year prior.
In this time, Saudi Arabia has not only established and fostered a tech ecosystem, but nurtured it fervently enough to birth its first batch of unicorns. Saudi Digital Payments Company, more commonly known as STC Pay, established itself in 2018, and subsequently became a unicorn in 2020 when Western Union acquired a 15% stake for $200 million. Jahez, Saudi’s homegrown online food delivery service player, is the Kingdom’s newest unicorn, which achieved unicorn status when it launched its initial public offering (IPO) on Saudi’s secondary market, raising $2.4 billion.
Related: On The Fast Track: Saudi Arabia’s Entrepreneurship Ecosystem
Beyond fintech and foodtech startups, the Kingdom is also making waves with the breadth and depth of startups emerging from it. For example, Hazen.ai is a Saudi Arabia-born artificial intelligence/machine learning startup using computer vision and deep learning in order to make roads safer to reduce traffic accidents.
OQ Technology, a European space tech startup that closed its Series A in 2022 to deploy more nano-satellites to help bring 5G connectivity to the most remote parts of the globe, is also covered in the report. Though OQ Technology is a European startup from Luxemburg, it is currently building its first satellite control center in the Kingdom, and expects to hire 300 Saudis over the course of the next three of more years, which should certainly add to the Kingdom’s deep-tech tapestry.
Nuqtah, a local NFT marketplace -and its first beta site launch- gets covered in the report too, along with some insights into their dreams and ambitions of becoming a much larger all-encompassing Web3 player.
A highlight in the report is a look-book of sorts,showcasing some of the most active investors in the Saudi startup ecosystem. The report covers their perspectives on what’s happened thus far, and what’s to come– including the creation of more specialized funds, funding gaps moving up the funding value chain to later stage and pre-IPO stages, and an increasing number of B2B-focused startups. We also speak to the founders and partners at Wa’ed Ventures, 500 Global, Impact46, KAUST Innovation Ventures, Raed Ventures, Vision Ventures, STV, Hala, and Saudi Venture Capital Company (SVC), to name a few.
A special feature in the Special Report also highlights the many women making an impact on the Saudi venture capital (VC) ecosystem, and asks them, point blank: “What’s it like being a woman in VC in Saudi, and how can we get more female founders and female investors to the table?” We get perspectives from the women at the helm at SVC, 500 Global, Impact46, Graphene VC, Outliers, and OQAL.
Download the full report by clicking here.
