Saudi Arabian Startups’ Funding Grow by 82% in H1 2019

Saudi Arabia stands out as a key market player in the startup and venture capital markets in the MENA region with an exponential growth of 82% in total funding during the first half of 2010. The kingdom also experienced a boost of 44% in the amount of investment deals during the same period, according to MAGNiTT’s ‘H1 2019 Saudi Arabia Venture Capital Snapshot’ report.

MAGNiTT, a platform that monitors and reports developments related to the MENA entrepreneurship landscape revealed their report last Monday, which details the efforts made by Saudi Arabian entrepreneurs and investors, making Saudi Arabia’s rank in fourth place regionally in terms of numbers of deals, right behind UAE, Egypt, and Lebanon in that order. The kingdom accounted for 11% of the number of deals which is a 1% jump from the previous year’s report. Saudi Arabia also accounted for 9% of the total funds raised in the region.

The report was released in collaboration with government-owned entity, Saudi Venture Capital (SVC), which went on to detail and explain the observations made during the same period, where SVC hit a record of investing $40 million in Saudi startups. Some of the notable investment deals during the period was Edu-Tech startup Noon Academy’s Series A round of $8.6 million, and grocery delivery company Nana, which also raised a Series A round of $6.6 million. The report also shed light on the venture capital deals raised by Saudi startups making it a total of 26 deals in H1 2019.

“Saudi Arabia is currently witnessing an increase in the quality and quantity of the deal flow of startups, considering the rise the Kingdom has seen in more professional angel investors and venture capital funds,” says Nabeel Koshak, Chief Executive at SVC.

With the emergence of new investors such as SVC and MiSK 500 MENA Accelerator, the major contribution made by accelerator programmes accounts for the increase of the total figure, where startups are encouraged to go through these programmes to seek funding from VC firms and other institutional investors. A total of 30 institutions have been investing in Saudi-based startups during the first half of 2019, including Wa’ed Ventures, Ra’ed Ventures, Riyad Taqnia Fund and SVC.

Despite the increase in funds raised, Saudi Arabia remains in the third place in the MENA region for VC funding, behind the UAE and Egypt, where startups raised $311 million and $53 respectively.