SPECIAL REPORT 2023

THE EVOLUTION OF
SAUDI ARABIA’S
START-UP
ECOSYSTEM
2010-2022
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TABLE OF CONTENTS
Editor’s Note 3
Foreword 5
A Young, Tech Hungry Consumer Base 7
The Government’s Vision for Entrepreneurship 19
Saudi’s Startup Ecosystem Today 39
Meet Saudi’s Venture Capitalists 53
Conclusion 87
Appendix: The Kingdom’s Macroeconomics 89

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EDITOR’S
NOTE Erika Masako Welch
Chief Content Officer, Special Reports
Entrepreneur & Lucidity Insights
[email protected]

Saudi’s start-up ecosystem has been consumers. A healthy tech ecosystem is young, it has already proved that
on quite a journey this past decade. not only adds to the country’s economy unicorns can be developed here, with
Ten years ago, there were but a few and non-oil GDP, but it also brings STCpay and Jahez being the first out
Venture Capitalists, incubators and new job opportunities and helps lower of the gates. Exits are growing year on
accelerators working in the Kingdom; unemployment rates. Supporting tech year, with increasing M&A activity and
in comparison, there seems to be real also means that Saudis are building Jahez setting precedence for successful
options today for startup founders to and launching localized digital products IPO exits. Saudi start-ups are not only
consider who might appear on their cap in areas like Fintech and eCommerce expanding beyond Saudi’s own borders
tables. The few VCs who were active in that brings innovation, convenience, across the region, but also becoming
Saudi at the time tell us that “local tech efficiency, and a higher quality of life to increasingly sophisticated each year.
entrepreneurs” were hard to come by in daily life. The country is still sprouting fintech
the Kingdom back then, and thus many and consumer-focused startups, but
of them were funding entrepreneurs A healthy tech industry also inspires have also moved on to include startups
from the region looking at entering a change in mind-set of the general that are commercializing robotics, AI,
Saudi Arabia. Today, it’s a very different population; one where Saudis aspire Web3, blockchain, B2B SaaS, agtech
story, with many local entrepreneurs, to innovate and build productive new and deeptech applications.
both young and seasoned - entering the businesses and solutions from the
entrepreneurial landscape. And why ground-up. This alone is no small feat, This report is the first of its kind; a
wouldn’t they? 2022 was the year that as many Saudi’s would have raised a comprehensive overview of where
Saudi Arabia’s funding broke through skeptical eyebrow at the thought of Saudi’s startup ecosystem came from,
the US $1 billion mark, an achievement entrepreneurship as a career path one and where it’s going. It highlights some
that neighbouring UAE only broke in decade ago. Today, there are seasoned of the Kingdom’s interesting startup
2021. Of this, venture funding was 62% experts with 10 to 20 years of work success stories and up-and-comers.
while the remaining was private equity experience leaving lucrative careers We also provide you with a 360-degree
funding. to launch their own startup in the view of the startup ecosystem from the
Kingdom. point of view of the investors that see it
With the launch of Vision 2030 in all. Last but not least, we map out the
2016, the Kingdom was set on a path And with Saudi’s young and tech-savvy most important stakeholders active in
to modernization and diversifying its population of 35 million inhabitants, developing the startup ecosystem into
economy away from its dependency it has not only been a great breeding the burgeoning marketplace that we
on oil. This put a spotlight on the ground for local consumer-driven see today, to help guide entrepreneurs,
importance of investing in and startups, but it has also been a techies and investors to get the lay of
developing a tech ecosystem in the significant battleground for regional the land. It is packed full of insights,
Kingdom. Developing a tech industry in heavy-weights coming from the UAE data and opinions from the thought
the Kingdom ticks many boxes for the and other GCC countries or even leaders and market makers in the
government and for individual Saudi Egypt. Though the start-up ecosystem Kingdom.

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FOREWORD
Over the past few years, the Saudi an active movement to close the of e-services, telecommunication venture capitalists, both local and and Sanabil have all been the engines
entrepreneurial ecosystem has gaps that have always separated us infrastructure, and human capital. None international, have started to seek behind this year’s top funding rounds,
undergone a transformational leap from the global digital scene, from of these were attainable had it not been out ways to further their support of while transformational leaders like
due to the unprecedented support localizing the manufacturing of the for the maturity of the government’s Saudi-based companies. In 2022, Aramco and NEOM are developing
from regulators, investors, and startup same solutions and products being digital policies and its commitment $750 million of venture funding cross-industry partnerships and
founders whom together established an invented internationally, to raising to reach more than 90% in both went into local home-grown startups. innovation centers to cultivate a self-
unshakeable triplicity that placed the the commitment of fund managers the quality and the reach of digital When we consider PE funding and generating tech cluster within the
local innovation scene on the map. and tech leaders to build a sustainable solutions being offered to its citizens. Corporate Funding rounds on top Kingdom.
environment of innovation. Our local of venture, Saudi-born startups
The percentage of first-time founders startups are continuing to find ways to This incredible commitment by garnered nearly $1.2 billion in At Wa’ed Ventures, we have
multiplied across sectors and industries expand into new markets, to bend some regulators translated directly into the funding altogether in 2022, a witnessed the accelerated rate in
as Saudi Arabia’s tech sector expands of the rigidity that characterized some local startup scene, where digitalization significant jump from the $605 which the capabilities, the possible
exponentially with the country typical markets, and to drive the whole and technological innovation are core million fundraised in 2021. Funding reach, and even the visions and
embracing its new position as the ecosystem into becoming an extremely drivers for every entrepreneur in the for Saudi startups have doubled dreams of our local founders evolved
world’s 6th ranked country among the relevant market for the global investor. Kingdom. Proudly, our entrepreneurs year-on-year for each of the last three over time, to materialize from
G20 countries in terms of market value. were able to find correlations between years. shy ideas and humble models to
More than 19% of adults in Saudi The Kingdom already ranks the first the specifics of their startups, and the sophisticated, technically-sound, and
Arabia have pursued entrepreneurial in the region and the third globally overarching governmental strategies Today, we have a generation of competitively aggressive businesses.
activities between 2021 and 2022, in terms of digital government being drafted and executed. They see startups carrying the weight of For these founders to continue
due in large part to the fact that over transformation, according to the their technological interests in the setting the kingdom among the word’s their journey of raising the bar for
90% of adults continue to see good World Bank’s 2022 GovTech maturity advancements our leaders are inviting leading markets when it comes to new innovation-led teams, we need to
opportunities to take hold of in their rate, an achievement made possible into the Kingdom, and they find deep business innovation and scalability. help redefine the parameters of our
area, and are confident they have the by the National Strategy for Digital resonance between the magnitude of Our Saudi success stories include post-investment support as investors,
needed skills and knowledge to start a Transformation. This has led the their aspirations and the messages and Zid, Red Sea Farms, Manafa, Foodics, which we at Wa’ed Ventures have Fahad Alidi
Managing Director
business. Kingdom to break the record for its actions of our leaders. Rewaa, tamara, sary, Leen technology, established as a central pillar of Wa’ed Ventures
E-Government Development Index, Classera, Jahez, and more. Giants advancing our contribution to the
For the first time, we’re seeing being ranked 31st globally in terms Emboldened by this strong foundation, like Seqouia, 500 Global, Mubadala, ecosystem.

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A YOUNG,
TECH HUNGRY
CONSUMER BASE
We spoke to dozens of the most active investors and VCs
in the Kingdom as well as the region to ask them “what’s
driving the start-up ecosystem in Saudi Arabia today?” The
response was unanimous: Saudi’s tech-savvy consumer
base with favourable consumer spending behaviour and a
willingness to pay for value-add services. Couple that with
the scalability of a market with a population of 35 million,
and you get a magical combination for startup success.

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Saudi Arabia is a large emerging market INTERNET PENETRATION GROWTH BENCHMARK

consisting of a young, tech-hungry (%, 2012-2020)
consumer base with great infrastructure
in place to satiate that appetite. In
the past 10 years Saudi Arabia has
dramatically improved its internet
penetration rates, growing from 54% in
2012 to reach 98% today. This makes
internet penetration higher in Saudi
Arabia than in many other leading
economies around the world like the
UK (95%) and the USA (90%). In
2021, the Kingdom ranked 7th globally
for the fastest mobile internet speed,
giving way to even higher smartphone
penetration rates. Perhaps this speaks
to Saudi’s love of social media. 79%
of the Saudi population are social
media users and spend on average 3
hours and 16 minutes on social media
platforms, signifying an online presence
higher than that of leading e-commerce
markets. Source: Lucidity Insights Research

TIME SPENT ON SOCIAL MEDIA, 2022

(H:MM)

POPULATION BY AGE AND GENDER 2021

*Among those aged 18 to 75 years old

Source: General Authority for Statistics, Saudi Arabia Source: Lucidity Insights Research & Analysis

Source: GWI (Q1 2022)

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UNCTAD B2C E-COMMERCE INDEX VALUE

Source: United Nations Conference on Trade and Development 2020 and 2016

E-COMMERCE SALES AS % OF RETAIL SALES, 2020

Source: eMarketer, Saudi Gazette, BCG Analysis

STRONG CONSUMER BASE SAUDI ARABIA ECOMMERCE PENETRATION RATE 2021 USERS BY AGE

Speaking with many startup founders, some investors - more reliable for jumped 20 points since 2016, showing
venture capitalists, eCommerce and retail, F&B and consumer-oriented tremendous improvement compared
retail entrepreneurs, they tell us businesses. Investors comment on to leading countries. E-commerce also
that Saudi’s strong and consistent how summers can be a “dead period” relies on postal development and Saudi
consumer-base is what attracts for consumertech startups in Dubai Arabia ranked 55th out of 168 countries
startups from across the region. Saudi while expats escape on summer in the Postal Development Report 2021
Arabia has the largest population in the holidays, while revenues remain a bit up from 73rd in 2018. In 2020, the
Gulf, being home to 35 million people. more consistent in Saudi Arabia in Kingdom’s e-commerce sales were only
Saudi Arabia relies less heavily on comparison. 8% of total retail sales, which is much
expats compared to neighbouring UAE, higher than the Middle East & Africa
39% of Saudi’s 35 million are expats, The UNCTAD’s1 B2C e-commerce index average (at 2.7%), but when compared
while 91% of the UAE’s population value measures a country’s competence to more mature markets like the USA
are non-Emirati. This means that the and readiness to support online (14%), the UK (31%), and China
Source: Statista
Saudi population is more homogenous, shopping. Saudi Arabia ranked second (45%), it indicates substantial room for
less transient, and - according to in the region after UAE in 2020 and has growth.

1
United Nations Conference on Trade and Development

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ADOPTION OF DIGITAL
PAYMENTS
As part of Vision 2030, the government has set a target of
achieving 70% cashless payments by 2030. The Kingdom
has done so well on working towards this target, that some
claim they are aiming to achieve this target by 2025. This
means that the government wants 70% of all transactions
to be conducted digitally, without the exchange of physical
cash. In 2021, Saudi Payments collaborated with IBM and
Mastercard to launch instant payments system “Sarie”
leading to adoption of faster payments, in line with Vision
2030’s cashless aims. According to the Saudi Fintech
National Adoption Survey, 74% of individuals have used
at least one fintech solution, the majority being under the
age of forty. 91% of individuals are aware of e-payments,
and two-thirds (69%) regularly use these solutions. The
Financial Sector Development Program (FSDP) also set a
target for the share of electronic payments in retail to be
55% of total transactions, which was surpassed in 2021
when digital payments reached 57%.

PRECENTAGE OF INDIVIDUALS THAT USE AT LEAST PRECENTAGE OF INDIVIDUALS IN EACH REGION

ONE FINTECH SOLUTION THAT USE AT LEAST ONE FINTECH SOLUTION

Source: Saudi Arabia National Fintech Adoption Survey - Results 2021

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SPOTLIGHT | JAHEZ

5 Years to Unicorn-dom in
Saudi Arabia’s Hypergrowth
Consumer-Tech Market
KSA’S ONLINE FOOD DELIVERY MARKET SIZE & GROWTH PROJECTIONS

Saudi Arabia’s macro-economics are compelling.

They tell a story of a large population of young,
tech-savvy, Saudis with strong purchasing power,
hungry for the latest consumer technologies. With
98% internet penetration across the country, 97%
of Saudis owning smartphones, and 69% of the
population regularly using e-payment solutions,
the country does seem ripe for consumer-tech
start-ups to sweep up a strong user-base.

Take Jahez, for example, Saudi Arabia’s online

food-delivery unicorn, who successfully listed
on Saudi’s secondary market, Nomu, raising a
$2.4 billion initial public offering (IPO) in 2022.
Jahez achieved this stellar exit within 5 years of
establishing itself, while delivering a cumulative
100 million meals to Saudi customers through
19,900 merchants and 52,400 delivery partners.
A year prior to IPO-ing, the food-delivery start-up
grew from serving 22 cities to serving 47 cities,
capturing 28% of the country’s food delivery
market share. In March 2021, the company served
over 1.3 million customers. Fifteen months later,
Jahez’s consumer-base had grown 67% to serve
2.4 million customers.

Source: World Bank, Statista, GWI, Lucidity Insights Research & Insights (*) Smartphone Penetration % was calculated within population between the ages of 16 to 64.

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SPOTLIGHT | JAHEZ

IMPACT46, a Riyadh-based venture by 1.6x and Jahez had witnessed a serve a growing number of consumers
capital firm raised a single asset fund 46% growth in the number of orders across the country. As of July 2022,
for Jahez’s IPO amounting to US$ 37 being placed, from H1 2021 figures. Jahez had hit a precious milestone of
million. Founding Partner of IMPACT46, The company also posted an adjusted fulfilling over 100 million cumulative
Abdulaziz Alomran, has this to say EBITDA profit of SAR 83 million orders since inception. As a locally-
about this listing: “While IMPACT46 (equivalent to US$22.1 million) and owned food delivery platform enabling
impacted Jahez’s IPO, marking the first is poised to finish the 2022 financial merchants to reach more customers,
tech startup backed by VC to go public, year with over $40 million in profits to the platform is investing in providing
the much-anticipated IPO move also set continue funding its market dominance, an increasingly user-centric experience
an important precedent that will widen in a market that is conservatively that will continue to delight customers
the entry funnel of startups listing forecasted to be valued at US$2.8 with convenience, and support the
in the Kingdom. Jahez’s pioneering billion by 2025. development of local communities
IPO has positioned the Saudi market through continuous technological
as a leader in the region, taking the When we spoke to various stakeholders innovation. Jahez is poised to accelerate
ecosystem to a new horizon.” aware of Jahez’s future growth plans, its strategy and no doubt contribute
we learned that Jahez has no plans to the prosperity of the promising tech
Jahez’s growth story has continued of slowing down. It is working hard sectors in the Kingdom as well as across
since listing on 5 January 2022. At the to grow its presence to additional the region.
end of Q2 2022, revenue had grown cities and adding more merchants to

Source: Jahez, Lucidity Insights Research & Insights

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THE GOVERNMENT’S VISION FOR

ENTREPRENEURSHIP
The Kingdom launched Vision 2030 in 2016, a 15-year strategy and roadmap
for Saudi Arabia to diversify its economy away from oil. It’s an ambitious plan
to modernize the Kingdom to serve its youthful population and create millions
of jobs that it needs for the stampede of young Saudi men and women
graduating from colleges, domestic and abroad on government scholarships.
The Kingdom opened its borders to international tourists for the first time
in its history in 2019, in hopes that Tourism will contribute 10% of its GDP by
2030. The Kingdom is also developing a greenfield entertainment sector, to
make the country a more attractive place to live and work. Entrepreneurship
and small businesses are expected to play a major role in contributing to the
country’s non-oil GDP agenda.

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A VISION FOR THE

PEOPLE OF SAUDI
The Vision 2030 was unveiled in 2016 and is
based on three pillars that would transform the
Kingdom economically and socially: an ambitious
nation, a thriving economy, and a vibrant
society. Vision 2030’s main focus is to grow and
diversify the Kingdom’s economy away from its
reliance on oil revenues, increasing employment,
strengthening the private sector, attracting FDI
and supporting innovation.

When you boil the Vision 2030 down to its

essence, it was drawn up primarily to support
the next generation of Saudis. It is a Vision to
reform the Kingdom, not just economically,
but socially and structurally, to lead and serve
the next generation of Saudis that increasingly
are forming the Kingdom’s economy and social
fabric. The architect of the Vision is the Crown
Prince, His Royal Highness Mohamed bin Salman
bin Abdulaziz Al Saud. He himself belongs to
the two-thirds of the Kingdom’s 35 million
inhabitants, who are under the age of 40.

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DRIVING EMPLOYMENT ENTREPRENEURSHIP & JOB CREATION

One of the Vision’s primary drivers is to address the country’s by the government. One of the first Vision 2030 targets which Ultimately, the Kingdom is seeking Thus, Saudi Arabia is investing heavily
unemployment rate, which has traditionally hovered around were met, was the target to achieve 30% female workforce to create millions of new jobs. In in its start-up ecosystem, working to
12%. The Vision aims to bring that down to 7% by 2030. This participation (from 16% in 2015); at the end of 2021, female order to do so, the Kingdom is betting change mindsets and bring about an
target, in and of itself, is quite a large feat due to the fact that workforce participation reached 33.6%. This is just one on entrepreneurship and SMEs. To entrepreneurial culture in all manners
Saudi Arabia has such a large ‘youth bulge’. This means that example of the fast-changing market landscape of daily life in diversify away from a reliance on oil, of business. Saudi Arabia has been
there are twice or three times as many youth graduating and Saudi Arabia. Ultimately though, this means that the Kingdom the Kingdom is investing hundreds supporting entrepreneurship and
entering the job-market than those whom are retiring. Add to must create many jobs that do not exist today to cater to the of billions of dollars into its tourism encouraging investment in local start-
that, the changing social ecosystem in Saudi that has seen an young and ambitious Saudis – both men and women - that economy, its digital economy and its ups as part of the Vision’s objectives
influx of women join the workforce, which has been supported want meaningful and exciting careers. sports and entertainment economy, to to increase the number of SMEs
name but a few of the new greenfield and their ability to scale, FDI, and
industries being created for the first most importantly, the private sector
GENDER SPLIT 2021 POPULATION BY AGE AND GENDER 2021 time in Saudi Arabia. Saudi Arabia aims contribution to the country’s GDP.
to emulate what many other economies
have done; namely, have SMEs and The past five years has seen a flurry of
start-ups generate a significant activity, driven by various stakeholders
portion of the country’s jobs and in the Saudi ecosystem. Here, we detail
economic activity. In the United States, just a few – to provide a sample of
for example, 44% of the country’s what’s been driving this step-change
economic activity (GDP) is generated by for Saudi Arabia. At the end of the third
small businesses, and American small quarter of 2022, over 978,000 small
businesses created 62% of all new jobs and medium-sized enterprises (SMEs)
in the States over the past 15 years. were operating in the Kingdom.

Source: DataReportal, General Authority for Statistics, Saudi Arabia

SAUDI UNEMPLOYMENT RATE (2014-2021) SAUDI FEMALE WORKFORCE PARTICIPATION

Source: General Statistics Authority, Saudi Arabia, Lucidity Insights Research Source: Saudi Vision 2030, Lucidity Insights Research

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KEY STAKEHOLDERS & INITIATIVES IN THE KINGDOM

Here is a non-exhaustive list of some of the key stakeholders responsible for driving the growth of SMEs and the entrepreneurial
ecosystem in the Kingdom.

Key Stakeholders Role & Initiatives Key Stakeholders Role & Initiatives

The Public Investment Fund (PIF) is Saudi Arabia’s Sovereign Wealth Fund (SWF); it is one
of the largest SWFs in the world. PIF is playing a critical catalyst role in driving Vision
The Central Bank, also known as SAMA, is leading the development of the Fintech sector,
2030 and the growth of new sectors in the Kingdom, to create new companies and jobs.
helping to regulate the sector, hosting regulatory sandboxes, and issuing fintech licences
along with the Capital Markets Authority (CMA).
Key Stats:
• Over US$620 Billion Assets Under Management (as of 2022)
www.sama.gov.sa
• Developing 13 Strategic Sectors
• 71 PIF Companies created
• 500,000+ direct and indirect jobs created
The Capital Markets Authority (CMA) is responsible for regulating and developing a healthy
www.pif.gov.sa
investment environment and resilient capital markets ecosystem.

The Ministry of Investment (MISA) is in charge of regulating, developing and promoting www.cma.org.sa
domestic and foreign investment in the Kingdom and protecting the rights of all investors.
The agency is in charge of preparing the Kingdom’s national investment strategy, and
aims to develop Saudi’s investment ecosystem which supports it to become a world-class
investment destination. Saudi Venture Capital Company (SVC) is a government fund of funds that seeds VC and
Private Equity funds, while also participating in some direct investments in start-ups
www.misa.gov.sa by co-investing with other investors in the market. So far, SVC has backed >30 funds, 5
Angel Groups, and supported 401 start-ups and SMEs with US$1 billion in Assets Under
Management (AUM).
The Ministry of Communication and Information Technology (MCIT) is responsible for
building a solid digital foundation that can help foster and sustain the advanced digital www.svc.com.sa
economy Saudi Arabia is currently developing.

www.mcit.gov.sa Jada is a fund of funds company established by PIF in 2018 to develop the VC and PE
ecosystem in the Kingdom. It has an investment capital of US$1 billion. It has supported
±385 SMEs and has 23 funds under its management. Jada has also developed initiatives to
Monsha’at, also known as the Small & Medium Enterprises General Authority, was educate and engage the stakeholders in the VC and PE ecosystem.
established in 2016 with the aim of regulating, supporting, developing and sponsoring the
SME sector in order to increase productivity of SMEs and their contribution to national www.jada.com.sa
GDP from 20% to 35% by 2030.

www.monshaat.gov.sa The Saudi Venture Capital and Private Equity Association (SVCPEA) is an industry body
created by a resolution made by the Saudi Council of Ministers with the objective of
stimulating the VC and PE ecosystem in the Kingdom.
Tayseer, or the National Competitiveness Center (NCC) was established in 2019 as an
independent government center that works to develop the competitive environment and www.vcpea.org.sa
improve the Kingdom’s position globally. It proposes initiatives and solutions to help
eliminate obstacles facing the public and private sectors. It has implemented reforms
to improve the business environment such as launching the Private Sector Feedback Fintech Saudi was established in 2018 by the Saudi Central Bank, in partnership with
Platforms, which links investors with government entities and reducing requirements for CMA, to act as a catalyst for the development of the Saudi fintech industry. Saudi Fintech
investment licenses by 54%. It has also helped to implement regulatory reforms such as works alongside fintechs in the Kingdom to act as an intermediary between government
in the case of raising foreign ownership rates to 100% in specific sectors. and the start-up ecosystem, to understand what needs and challenges need to be addressed
to help the sector flourish in the Kingdom.
www.ncc.gov.sa
www.fintechsaudi.sa

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KEY ENTREPRENEURSHIP CONFERENCES

& EVENTS IN THE KINGDOM

LEAP
LEAP conference is a four-day international tech conference which takes place each
year in early February, organized by MCIT. The conference hosts over 700 speakers, and
brings together over 100,000 technological innovators and experts from around the
world. In 2022, LEAP announced over US $6.4 billion in investments and initiatives.
Saudi Arabia is gearing up to become the Silicon Valley of the Middle East and has also
announced the launch of the Garage, which was inspired by companies such as Apple
and Amazon that originated and operated out of a garage at onset. It is an innovation
hub that supports tech startups in the Kingdom, fosters creativity and experimentation
with ideas, and provides incubation and mentorship programmes as well as an open
workspace.

BIBAN
In 2017, Monsha’at launched BIBAN, a four-day annual conference for entrepreneurs,
startups, and investors to develop innovation capabilities in the Kingdom and foster
its growth. It was a dynamic and interactive event with 12 stations that included
conferences, awards, and exhibitions. In these formative years of the Saudi start-up
ecosystem, the BIBAN conference was important to help address and tackle obstacles
faced by entrepreneurs and stakeholders in the ecosystem, such as lack of familiarity
with government systems, procedures and regulatory requirements for start-up
founders.

GLOBAL ENTREPRENEURSHIP CONGRESS

In March 2022, Monsha’at and the Global Entrepreneurship Network (GEC) organized
the Global Entrepreneurship Congress in Riyadh, a four-day event that gathered
entrepreneurs, investors, policymakers, and key stakeholders to promote, connect, and
strengthen the ecosystem. The GEC secured US$13.8 billion in investment directed
towards financial products, mentorship, and funding. It hosted 150 speakers including
Apple co-founder Steve Wozniak and Netflix co-founder Marc Randolph. Monsha’at
announced that it would allocate US$3.2 billion to start-up funding and the Ministry
of investment would allocate US$1 billion to license international companies and
encourage entry to the Saudi market.

RISE UP SUMMIT
In November 2022, one of the region’s major startup conferences, Rise Up, came to Saudi
Arabia for the first time. The summit took place at the King Abdullah Financial District
and attracted nearly 10,000 participants, 150 startups, investors and 200 speakers. This
summit is gearing up to become an annual affair.

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SPOTLIGHT | SAUDI VENTURE CAPITAL COMPANY

SVC’S ROLE IN CREATING A

HEALTHY INVESTOR ECOSYSTEM in Funds Program and the Co-Investment in Startups
IN SAUDI ARABIA Program.” Canada, Singapore, United Kingdom, Brazil,
South Korea, and the European Union were just some of
the government’s assessed for the benchmarking exercise.
SVC aims to support government
Investment in funds or a “Fund of Funds” is important
in the development of a healthy venture investment efforts in line with Vision 2030
ecosystem in any country. Venture capital and private
equity funds both need limited partners (LPs) in their to grow SME contribution to the
funds, who are essentially investors that feed their funds.
“Without this investment, VC and PE fund managers may
choose to launch their funds elsewhere, taking their focus
GDP from 20% in 2016, to 35% by
away from the Saudi market,” says Koshak. 2030. SVC will help the Kingdom
In a startup ecosystem in its infancy, fund of funds like
SVC and Jada support first-time fund managers to raise
achieve this by supporting the
capital and prove themselves. “Raising a first-time fund
is very difficult, because few LPs want to take a chance on Venture Capital investment
a player with no track record,” says Nora Alsarhan, Chief
Investment Officer at SVC. “SVC is often the first cheque ecosystem in the Kingdom,
in for first-time fund managers, which allows for the birth
of several investment funds across the Kingdom.” ensuring startups and SME’s
With co-investing in startups, SVC builds investor
confidence in local startups with its investment strategy.
have access to capital.
At the beginning, SVC was matching startup investments
Dr. Nabeel Koshak
CEO of Saudi Venture Capital
made by local angel investors, while providing added
Company (SVC) incentives such as profit-sharing up to 90%. This for co-investment in startups. “When we started, we were a
significantly de-risked investments for angel investors. gap filler,” says Dr. Koshak. “This required us to look at the
“It’s important to note that, as a government-backed gaps from angel and pre-seed all the way to pre-IPO stages. The
investor, we don’t lead investment rounds,” says Dr. largest gap in the market when we initially started had been
Osamah Alamri, Chief Strategy Officer at SVC. “We in seed and pre-seed investments, due to where the market
In 2018, Saudi Venture Capital from 20% (a 2016 baseline) to 35% by governments around the world have support and increase access to capital, but we rely on local maturity was. Today, we are seeing it move up the value chain,
Company, more commonly referred to 2030. stepped in to help finance and stimulate and global fund managers and angel investors to lead the and we are seeing gaps in later stages, beyond Series B.”
as SVC, came on the scene to help drive the development of fund managers, who way. So that means we aren’t meeting with entrepreneurs
investment into Saudi startups and The premise behind the efficacy of play a key role in growing their home ourselves; we rely on the co-investor from the private To address the pre-seed and seed stage gaps, SVC launched an
SMEs. SVC is a government-backed a Funds of Funds is quite simple. A startup ecosystem. sector to have the active role.” Investment in Accelerator and Startup Studio Funds product
investment company with US$1.5 healthy startup ecosystem requires in 2021. Koshak adds, “we like this because VC-backed
billion in assets under management access to capital, so that startups can “So, the question we had to ask Thus far, SVC has invested in 35 funds and co-invested accelerators and Startup Studios have skin in the game. Unlike
(AUM), aiming to stimulate and sustain fund and grow themselves. For that to ourselves,” says Dr. Nabeel Koshak, with 16 institutional investors, and 56 angel investors from the ‘innovation labs’ or ‘innovation theatre’ models. We like
financing for startups and SMEs from occur, there must be a strong base of CEO and board member at SVC “…was: 5 angel groups, which have directly impacted investments investing in investor-backed product offerings.” The Angel
pre-Seed to pre-IPO. The organization VCs and private investors in the market, how can we stimulate more VC and PE in approximately 525 startups and SMEs. The size of co-investment in startups seeks to support angel investors
is a subsidiary of the SME Bank, one of providing optionality to startups. In a investments? Once we conducted a SVC’s fund has recently increased from $1 billion AUM to to build-out professional investment experience which cater
the development banks affiliated with young startup ecosystem such as Saudi thorough global benchmarking exercise $1.5 billion (5.7 billion Saudi Riyals) AUM. to the pre-seed and seed stages. Of this, Koshak says, “we’re
the National Development Fund, and Arabia, VC firms are often few and far on how various countries had done happy to see that there are five angel investor groups that are
was established to support the efforts of between, and can often be considered it, two broad-level programs were Today, with the AUM growing to US $1.5 billion, SVC’s quite active in Saudi Arabia today, and they play a critical role
growing SMEs contribution to the GDP startup funds themselves. Thus, identified which was the Investment allocation is about 90% for investment in funds and 10% in the start-up ecosystem.”

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SPOTLIGHT | SAUDI VENTURE CAPITAL COMPANY

Osamah Alamri Nora Alsarhan

Chief Strategy Officer of Saudi Chief Investment Officer of Saudi
Venture Capital Company (SVC) Venture Capital Company (SVC)

SVC also co-invests with institutional Kingdom’s entrepreneurial ecosystem We need to support newcomers, and market matures, this incentive shrinks funding when raising an equity round is sector-specific funds, but we’ve already
investors (i.e. fund managers) when and are also expected to contribute despite the due diligence process we – and today the incentive waives 60% not feasible. SVC is currently reviewing seen specialty funds in fintech and
there is an equity financing gap or significantly to the Kingdom’s non- go through, this dramatically increases of SVCs carried interest. several debt-financing firm applications healthtech form in 2022. We’ve started
to catalyze later stage investments oil GDP. It’s important not to forget our exposure to the risk that some of to bring this financing option to the to see more interest around sectors
for strategic or financially-driven these entrepreneurs, and ensure they the funds we back may not succeed Another requirement of co-investment Kingdom. “The global benchmark is such as deeptech and gaming as well.”
objectives. “We don’t lead rounds. We also have greater access to alternative as planned. But that’s the risk we from SVC is that the startup must that 10% to 20% of financing needs in
rely on local and international VCs to funding. need to take, if we are going to play a be Saudi-based. “The nature of the market be served by venture debt, Ultimately, even Koshak seems
lead the way and introduce us to fast- developmental role in the market.” venture capital is cross-border and so we’re keen to see more applications surprised by the pace of growth and
growing startups with a compelling Due to the dynamic evolvement of the international, so we don’t require the to make this option available to our development in the Kingdom. “The
growth story when additional capital is Saudi VC ecosystem, SVC’s strategy One of SVC’s ecosystem stimulation funds we invest in to be exclusively startups in the region,” says Koshak. rate of growth we’ve seen in the market
needed.” Unifonic and Sary are some of is reviewed quarterly to ensure that approaches first implemented by SVC focused on Saudi Arabia. But we do ask surprised even the most optimistic of
the beneficiaries of these programs. existing equity funding gaps are in the early years, which we learned that SVC’s financial contribution in SVC is also currently discussing the us. Twelve years ago, I saw a handful
minimized, and the private investors about through interviews with various their fund to be earmarked for either possibility of launching a pre-IPO of startups graduate from incubator
SVC is also tasked with developing are properly stimulated. It’s role as VCs was a generous incentive program. Saudi-based startups or international fund, which is something SVC is programs and nobody would invest in
the Private Equity market in the a market maker require SVC to be The incentive was provided by SVC to start-ups with significant operations looking at launching in 2023. As for them. Now startups have a lot of choice
Kingdom. For this development, SVC both agile and careful. SVC, being a angel investors when it co-invested (i.e. expenses) in the Kingdom.” future trend predictions, Koshak says in the market.”
also invests in Private Equity funds government-backed fund, isn’t solely with them. SVC would match their co- he expects many more sector-specific
that invest in SMEs with growth commercially driven; SVC also places investment partners’ investment, while SVC isn’t stopping there. SVC has funds and some international funds to Koshak adds, “I think the ecosystem
potential from outside the tech sector, high value on developmental activities. waiving 90% of SVC’s carried interest, partnered with Partners for Growth, increasingly invest in and set-up in the will continue to pleasantly surprise us,
in areas such as tourism, entertainment To this, Koshak comments, “if we were sweetening the upside for investors in a debt-financing firm out of the San Kingdom. Koshak noted, “The future is and it’s our job to keep ahead of the
or manufacturing. Non-tech related only commercially driven, we may not the ecosystem to take risks and invest Francisco Bay-area, in order to serve here. I thought it would take the market curve as best we can.”
SMEs are also important for the invest in first-time fund managers. in local startups. Every year, as the startups looking for venture debt much longer to specialize and launch

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SPOTLIGHT

How the Saudi Government has streamlined

# OF CARDS (THOUSANDS) # OF POS TERMINALS (THOUSANDS)
the Kingdom for Fintech
In 2016, Vision 2030 was launched,
followed by several comprehensive
programs developed to reach specific
goals and targets that were set out
in the wider strategy. The Financial
Sector Development Program (FSDP)
is one such program. The FSDP has
undertaken several commitments to
be reached by 2025 which include
supporting financial institutions,
promoting emerging fintech companies,
financing SMEs, and increasing
cashless operations. It aims to digitize
the economy and convert 70% of
all transactions in the Kingdom to
become cashless payments by 2025.
Source: Saudi Payments (Mada data)
The program’s efforts have had a major
impact on Saudi citizens, especially
supporting Saudis through the trying
times the world has endured during the
pandemic, which has accelerated the
adoption of digital solutions, many of
which require e-payments gateways.
monetary and financial stability in services to government entities and In 2018, SAMA also launched
Prior to 2016, there had been a very the Kingdom as well as to support businesses. In 2019, 99.9% of government a regulatory sandbox to attract local
few number of fintech players in the balanced economic growth. In 2019 the payment activities were cashless. and international fintech companies
Saudi market; one reason for this Central Bank officially established its to infuse new fintech technologies into
inactivity identified by the Saudi digital payments’ arm, Saudi Payments, SADAD is a national Electronic Bill the Saudi market. Today, 42 firms have
government was the lack of clarity on which operates the technological Presentment and Payment (EBPP) been permitted to operate under the
policies and the unregulated nature of infrastructure of various payment service provider and facilitates sandbox of which 15 have obtained
the fintech market up until that point. systems for the government and Saudi payment transactions such as utility, fintech licenses from SAMA to operate
The key stakeholders that have really institutions, such as Mada, SADAD, telecommunications, and other government in the wider Kingdom.
paved the way for the development of SARIE, and Esal. bills.
the fintech ecosystem since then are The Capital Market Authority regulates
the Saudi Central Bank (SAMA) and Mada was established in 1990 as Saudi SARIE is an Instant Payments system to the Kingdom’s capital markets by
the Capital Market Authority (CMA). Payments Network (SPAN). It connects facilitate cash transactions across local developing an appropriate and
The two institutions have different ATMs and POS terminals to a central banks and is accessible 24/7. transparent investment environment,
responsibilities but share a common payments switch and has succeeded in protecting investors and dealers from
goal: to regulate and develop the boosting their growth as the number of As a result of these four platforms, the illegal acts. One of the key initiatives
financial sector. cards has increased by 11% on average Kingdom is geared to reach its goal of that it has launched is the Fintech Lab,
between 2018 to 2021 and the number of 70% cashless transactions before 2025. which is a legislative experimental
The Saudi Central Bank was established POS terminals during the same time has In 2021, the Kingdom hit a milestone environment that attracts local and
in 1952 and was previously known increased by 42% CAGR. when cash was no longer the most international firms and allows fintech
as the Saudi Arabian Monetary common means of payment as 57% of products and services related to
Authority prior to changing its name Esal is a national electronic platform for transactions had become cashless. securities activity to test innovative
in 2020. Its mission is to maintain business payments (e-invoicing) providing business models.

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SPOTLIGHT

FINTECH IN SAUDI ARABIA HAS ENABLED 57% OF ALL TRANSACTIONS TO BECOME DIGITAL IN 5 YEARS
SAMA and CMA gave birth to Fintech Saudi in 2018, which Venture Capital firms such as Wa’ed Ventures have shown
is tasked with supporting the development of the Kingdom’s confidence in the Fintech sector even before it gained
fintech ecosystem and position the Kingdom as an innovative momentum. Ali Abussaud, Chairman of Hala Ventures, echoed
fintech hub. Its Fintech Accelerator Program provides support, the sentiments of many Saudi VCs we spoke to, stating that
coaching and mentorship to fintech companies. 12 fintech he believes that the fintech sector will continue to grow.
start-ups participated in the program this year and the 3 “Payments and SMB will continue to lead, and Crowd Funding
winners were awarded a financial grant of SAR50,000 each by will be the next area of development for Saudi’s fintech
Wa’ed’s incubation program. sector.”

BUSINESS PAYMENTS BY PAYMENT MEANS

Source: Saudi Payments

SHARE OF THE PAYMENTS BY BUSINESS TYPE (PERCENTAGE)

SHARE OF THE PAYMENTS BY BUSINESS TYPE

Source: Saudi Payments

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SAUDI’S START-UP
ECOSYSTEM TODAY
Saudi Arabia’s start-up ecosystem has grown at an unprecedented pace,
from just a few SMEs prior to the launch of Vision 2030, to ground-breaking
life-enhancing tech start-ups six years and a pandemic later. In 2022, the
Kingdom came in second in the Arab world in total funding value with US$ 1.2
billion of Venture, Corporate and Equity funding going to Saudi startups. Saudi
Arabia also came in third in the region for the number of deals (91) signed,
behind the UAE and Egypt.

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KSA AVERAGE SEED ROUND

A QUICK CLIMB (MILLIONS USD)

Saudi Arabia may be relatively new on its

entrepreneurial and digital economy journey, but
the Kingdom’s laser focus on developing a strong
entrepreneurial ecosystem has helped start-up
activity grow, and quickly. Historically, Saudi
Arabia has always trailed the UAE and Egypt’s
startup ecosystems, but this changed in 2021,
when Saudi Arabia became #2 in the Arab world
in venture funding raised. Saudi strengthened its
2nd place positioning in 2022, pulling further away
from Egypt and closing in on the UAE.

FUNDING VALUE BY COUNTRY # OF DEALS BY COUNTRY KSA AVERAGE EARLY STAGE KSA AVERAGE LATE STAGE
(MILLIONS USD) (MILLIONS USD)

Source: Lucidity Insights Research using Crunchbase data

Note: # of deals includes both, deals where funding values are undisclosed and those deals which have values disclosed
Total includes the following Angel, pre-seed, seed, Series A to C, unknown series funding, private equity, corporate rounds and other funding rounds.
2022 PE rounds include PIFs investment of US$ 412 million in Almosafer, omni-channel travel services provider.
Source: Crunchbase, Lucidity Insights Analysis
Note: Seed includes angel, pre-seed and seed. Early stage include Series A and Series B rounds of funding. Late stage includes Series C.
SAUDI ARABIA STARTUP FUNDING (MILLIONS USD)
AND NUMBER OF DEALS 2017- 2022

Saudi Arabia’s start-up funding has skyrocketed in 2022, It isn’t just the volume of funding being raised in the Kingdom
growing more than 20x in 5 years to reach US$ 1.2 billion that is growing. Ticket sizes across rounds have grown
across 57 disclosed deals (out of 90 deals total); 2018 funding substantially over the past 4 years. The average Seed Round
hovered at $50 million across 54 disclosed deals (out of 71 has increased at 30.5% CAGR from an average of $500,000
total deals). This also means that the average deal size in in 2017 to $1.9 million in 2022. Average early-stage funding
Saudi has grown substantially from <$1 million per deal in (Series A and Series B) rounds have increased at 37.2%
2017, to an average of over US$ 20 million per deal in 2022. CAGR since 2017 from an average of $5 million to averaging
$23 million in 2022. Late-stage investments, which was a
It is a remarkable feat for Saudi start-ups to have raised more category that was largely inexistent in 2017 have grown the
than US$ 1 billion in 2022, given that it took the United Arab most, showing over a 100% CAGR since 2019. While there has
Emirates, the reigning start-up capital of the Arab world, been only one disclosed Series C round in each of 2019, 2021
nearly a decade of fostering start-up activity in Dubai to break and 2022, what is encouraging is the value of funding has
the $1 billion ceiling in 2021. This speaks to the speed of increased more than 8x from US$ 20 million in 2019 to US$
change and growth in Saudi’s start-up ecosystem, driven by 170 million in 2022.
the calibre of start-ups emerging in Saudi Arabia and their
Source: Lucidity Insights Research using Crunchbase data
ability to scale across the Kingdom and beyond.
Note: # of deals includes both, deals where funding values are undisclosed and those deals which have values disclosed
Venture rounds include Angel, pre-seed, seed, Series A to C, unknown series funding and other funding rounds.
2022 PE rounds include PIFs investment of US$ 412 million in Almosafer, omni-channel travel services provider.
Only local Saudi-born startups with headquarters and significant operations in Saudi are considered; Trukker and Unifonic are exceptions that have been included
- due to the size of their operations in Saudi Arabia.

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TOP FUNDED STARTUPS ARE IN FINTECH NUMBER OF ACTIVE FINTECHS OPERATING IN SAUDI ARABIA 2018-2022

Considering that 4 out of the top 10 represent 30% of all fintech companies
funded startups in Saudi in 2022 were present in the kingdom. In August 2022.
fintechs, and #1 Tamara and #2 stc pay, Tamara, a buy-now-pay-later platform
each raised more than US$ 200 million, that allows users to pay in installments,
it comes as little surprise that fintech raised US$100 million in a Series B round
emerges as the most funded sector in the - bringing the total funds raised to over
Kingdom. This is a trend seen around US$215 million, is now the most funded
the globe, as fintech is considered the fintech startup in the Kingdom, surpassing
backbone infrastructure from which many stc pay which raised US$ 200 million in
other tech industries can commercialize November 2020.
and recieve digital payments - from
NUMBER OF ACTIVE FINTECH COMPANIES SPLIT ANNUAL GROWTH BY CATEGORY
e-Commerce to restaurant tech and Unlike other industries that are still facing BY CATEGORY, 2022 OF ACTIVE FINTECH COMPANIES
delivery aggregrators - fintech is always some obstacles with funding gaps, there
involved. are investors that fund fintech startups at
every stage in the Kingdom today. As the
Fintech has experienced tremendous top 10 most funded Saudi startups (based
growth in 2022; the number of registered on publicly disclosed figures) shows,
and licensed fintechs operating in the Fintech and Foodtech are the two largest
kingdom grew from 80 to 147 startups. broad sectors pulling in the most capital
These 147 fintechs that are licensed, only in the Saudi startup ecosystem.

TOP 10 FUNDED KSA-BORN STARTUPS TO DATE + HONOURABLE MENTIONS

Source: Fintech Saudi 2022 Annual Report
Note: A few companies can be operating in multiple categories e.g. Foodics operates in both Payments & Currency Exchange as well as Business Tools & Information Provision

WHAT ARE THE FUTURE TRENDS IN START-UPS?

We spoke to key stakeholders in the Kingdom, from venture leaving 10-20 year careers to found their first start-ups.
capitalists, start-up founders, accelerators, incubators and This also means that the solutions they are offering are
angel investors, with one particular question: “What future highly specialized, bringing more sophisticated solutions
trends can we expect out of the Saudi start-up ecosystem?” to the market.
Here is what we heard:
4. More Globally-Minded Startups. The first start-ups that
1. More Saudi Startups are reaching the later growth stages, came out of the Kingdom were very Saudi-focused.
looking for Series B funding. Many VCs are looking Today, founders are thinking bigger and bolder, from day
to fund growth stage funds to support their existing one. The market expects to see many more start-ups that
portfolio of startups, and meet this growing demand in have a MENA region focus from the beginning, with bold
the Kingdom. At present, some fast-paced Saudi startups global ambitions in their future.
in later growth stages are going to international VCs for
5. Entrance of International Start-Ups. As the Kingdom
support, garnering support from the likes of Softbank and
continues to open its borders, with accelerator programs
Sequoia.
such as 500 Global and KAUST sending invitations to
2. Direct-to-Consumer (D2C) start-up categories like Fintech international founders, and local VCs like Wa’ed Ventures
and eCommerce will remain dominant, but Saudi will see investing in international start-ups with the aim of
an emergence of B2B start-ups. These B2B solutions will supporting their market-entry into the Kingdom, it is
emerge in subsectors such as supply-chain technologies, predicted that Saudi Arabia will see a gradual increase
fleet optimization, agtech, and even further into of foreign start-ups establish themselves in the market.
deeptech, driven by AI-powered software solutions. Many international VCs that have started to keep an eye
on the Saudi market are also assessing it as a potential
3. Increasing Number of “Experienced” Founders starting
market for their international portfolio companies.
companies. The current enthusiasm and activity in
Note: Based on disclosed fundraising amounts, up to December 31, 2022. Source: Crunchbase, Lucidity Insights Research & Analysis the Saudi start-up market has shifted mind-sets so
a) Unifonic shifted its headquarters to Dubai. drastically, that many experienced professionals are

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SPOTLIGHT | HAZEN.AI

A Saudi startup using deep learning

to drive road safety with limited capabilities, into a
software solution with unlimited
gives the airline industry as an example unique position to be a key player in the
of a sector that has made air travel fight for global road safety, and in the
Written by Erika Masako Welch
potential. Turning hardware into statistically safer than driving a car fight to save avoidable lives lost. While
software solutions allows for artificial because of the investment, technology there are other companies attempting
intelligence to continue levelling-up and importance given to safety. The to develop similar solutions in the
the product performance, adding more flight crew, traffic control and aircraft West, not many seem to have exposure
complex capabilities overtime, while dispatchers all work together to ensure to, or are willing yet, to enter the
reducing the cost of upgrades and a safe and successful flight. There’s developing markets that need this life-
implementation. a central regulatory authority, hours saving technology most.
of training for pilots, and technology
For example, a typical radar system deployed regularly in the name of safety. When I ask him if the emergence of
on a four-way intersection in the When there is a plane crash – which autonomous vehicles (AVs) might make
United States could cost upwards is incredibly rare – it makes the news. his technology obsolete, he pauses to
of US $800,000; roughly 25% for Every plane crash is taken seriously, ponder the question for a moment, and
the hardware equipment, and 75% with diligent investigations. Today, responds. “First of all, a world ruled
for installation, certifications and air travel results in 0.07 deaths per 1 by autonomous vehicles wont happen
maintenance. This radar system’s only billion miles travelled, compared to overnight, and we need to reduce road
capability today is to ticket drivers 7.28 deaths per 1 billion miles travelled fatalities today. But even in a world
for infractions like speeding, or not in a car. That makes air travel more where AVs were our sole mode of
Pictured are three of the four co-founders of Hazen.ai, Dr. Saleh Basalamah, Muhammad Khurram Amin,
heeding a red light. In contrast, Hazen. than 100X safer than driving a car. “Or transportation, I don’t see Hazen.ai as
and Dr. Anas Basalamah (left to right). Hazen.ai is company that uses computer vision and deep learning to ai’s solution seeks to offer an intelligent another way to put it,” says Sohaib, a plug-the-gap technology, but more of
design intelligent traffic analytic software to help reduce road accidents. solution for 1/10th of the cost. “If there “every 24 seconds, someone dies in a a complimentary technology that will
are already cameras installed at an car crash, which is equivalent to fifteen evolve with society and autonomous
intersection, all that is required is to 787 Dreamliners crashing every single vehicle technology overtime.” Sohaib
Meet Sohaib Khan, distinguished just over a decade ago,” Sohaib explains. are 1.3 million unnecessary road install a small processor next to the day! This is what motivates us.” comments on the other factors, such
professor turned entrepreneur. Sohaib “It was largely seen as a fringe research accidents all over the world each year, existing camera”, Sohaib explains, as roadworks, pedestrian and cyclist
is silver haired and has the nurturing science that could not withstand and a disproportionate number of “reducing the cost even further.” Today, Hazen.ai is revenue generating, behaviours that all need to be taken
smile you might expect from one of the rigor of practical or commercial these deaths are in emerging markets.” and is currently running pilot programs into account, to ensure safe roads in the
your favorite former professors. He applications.” What changed in the Sohaib continues, “We don’t call them Hazen.ai has the ability to monitor in several countries including Saudi future, that would still require a Hazen.
brings decades of research experience, last decade was several breakthrough road accidents at Hazen.ai though. and detect different types of dangerous Arabia, New Zealand, United Kingdom ai type solution. “If anything, I would
first from completing his PhD in in the research, with seminal research We call them crashes, because they and unsafe behaviours like unsafe and the United States. They’ve love to see our technology evolve so
the United States, and later from papers published on ‘unsupervised are avoidable. 9.9 times out of ten, it lane changes, illegal turns, jumping successfully raised pre-seed and seed that our cameras and software directly
running computer vision research and (machine) learning’ and ‘deep neural comes down to human error, in the a red-light or a stop-sign, blocking capital from two angel investors and speak to AVs on the road to warn them
innovation labs in top Universities networks’. At the same time, computing form of bad driving or texting and a pedestrian crossing, not wearing a Wa’ed Ventures. “Wa’ed have been of upcoming dangers in real-time.” Now
in both Pakistan and Saudi Arabia. power was increasing exponentially driving, or poor traffic design, or faulty seat-belt or texting-while-driving. super supportive, and an excellent that would be a safer world indeed; and
Today, he is the CEO and one of four co- each year, and the hardware had roadwork and even poor signage. All The software was also recently strategic partner for Hazen.ai. They perhaps a future that is not as far off in
founders of Hazen.ai, a startup building finally reached capabilities that could of these elements are addressable if upgraded to detect safety hazards understood the importance of this the distance as many of us might think.
cost-effective AI-driven software facilitate machine-learning. Last, but we could just make the observations for pedestrians and cyclists. Despite work, and that it requires patient
solutions that aims to reduce road not least, the availability of data – such and immediate recommendations for every country having different traffic capital.” Hazen.ai is gearing up to raise
fatalities. He is part of a new brand of as a library of images needed to feed rectification.” rules, the software has been built its Series A soon, and is keen to meet
entrepreneur emerging out of Saudi computers as a deep-learning data- for easy configuration in just a few international and regional strategic
Arabia, with deep expertise and know- set – also played a critical role. Today, That’s where Hazen.ai comes in. Taking clicks. “We’ve built it so that it’s investors familiar with deeptech
how, and a distinguished career behind we see computer vision applications in his nearly two decades of computer easily scalable across the world with investments.
him. Autonomous Vehicle (AV) start-ups, or vision research, Sohaib founded customization capabilities built-in
facial recognition software. Hazen.ai with one of his former for a smooth onboarding process,” he As road fatalities hit developing
He and his team are commercializing Pakistani students and two Saudi explains. countries disproportionately, and with
computer vision applications. So how did he decide to utilize co-founders. Hazen.ai has essentially only 0.1% of the world’s intersections
“Commercializing computer vision computer vision in road safety turned a hardware solution, often in “We’re driven by the million+ lives we being tech-enabled to date, Sohaib
applications was seemingly implausible applications? “Unfortunately, there the form of speed radars and cameras, can save each year,” Sohaib says, as he and his team believe Hazen.ai is in an

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SPOTLIGHT | OQ TECHNOLOGY

SPACE TECHNOLOGY STARTUP SETS UP

IN SAUDI ARABIA your next day’s alarm for you; it’s about
sensors in cold storage trucks travelling
direct-to-device 5G IoT connectivity.
“In big cities, we have strong cellular
when its paired with CCTV cameras,
and various gas or pressure sensors in
across Africa distributing vaccines, network coverage, and we often take the pipe itself.” This is precisely where
that require internet connectivity to for granted that we have internet OQ Technology comes in.
provide real-time temperature readings; continuously,” Omar says. “But there
it’s about sensors for dangerous gases are many rural areas around the world OQ Technology has launched several
in mining quarries in remote parts of that don’t have internet connectivity, nano-satellites, that are cheaper and
the Australian outback, or sensors on which is the problem we are trying smaller than usual satellites – often
shipping containers traveling the world, to solve for.” Take, for instance, the the size of a shoebox – that also fly
and being geotagged and tracked until pilot project Omar and the OQ Team much closer to the earth, providing
it gets to their final destination; it’s completed in the Fall of 2021 with 5G internet connectivity. In effect,
also about being able to install CCTV Saudi Aramco, the world’s largest Oil these nano-satellites act as flying cell
security cameras all along your border, & Gas company, and one of the largest towers. OQ Technology has launched
and being able to view that footage companies in the world by revenue. 3 satellites so far, with the aim of
in real-time from half-way across the Omar explains, “Oil companies around launching 7 more within the next year.
country. It is no surprise then, that the world own and manage hundreds, Omar says the goal is to launch enough
today we have 4 times more machines if not thousands of kilometers of oil satellites in their network to provide
connected to the internet, than we have pipelines – and these pipelines must be real-time coverage to all IoT machines
people. secured and constantly monitored for that rely on OQ Technology for their
leaks and issues. Today, in many parts connectivity time. With a handful
OQ Technology is working hard to of the world, that involves individuals of satellites orbiting the earth, data
ensure every machine that wants to get patrolling the terrain and monitoring from the various machines can only be
connected, can get connected. It is the the pipeline in person. It’s a dangerous uploaded twice or three times a day. As
first company in the world to provide job, that is simply not as effective as more satellites are launched, machines

Cyril Dufoing Omar Qaise Prasanna Nagarajan

Chief Technology Officer Founder & CEO Chief Innovation Officer

The latest European startup that has Space Agency, and Systems Engineering talent, capital and culture of innovation
identified Saudi Arabia as its next Consultant for Lunar satellite missions to a country as well.
big market, is OQ Technology. Wa’ed at the German Aerospace Center (DLR).
Ventures was a key investor in the OQ Technology was born in 2016 based
space-technology startup’s €13 million After working for several large space on the bet that 5G IoT is the way of the
Series A round, which closed in October companies and agencies, Omar started future, and that 5G IoT required new
2022. to think about launching his own technological infrastructure to be laid
private space tech company. Global down globally that would allow internet
OQ Technology Founder and CEO, Omar companies like Elon Musk’s SpaceX connectivity in even the most remote
Qaise, has been dreaming of space since were really shifting attention towards parts of the world. IoT refers to the
he was a young boy growing up in Iraq. private sector companies taking a ‘Internet of Things’, which describes a
His insatiable appetite for all things greater role in the space industry. network of physical objects – “things”
space led him to Germany to study Simultaneously, Omar was witnessing – that are embedded with sensors,
telecommunications and aerospace how countries with new space software and other technologies. This
engineering on scholarship, followed by ambitions, like in Luxembourg, were is what the Industrial Revolution 4.0
an MBA in the United Kingdom. He says suddenly building brand new space is about: sensors and robotics in our
that it was with sheer determination programs and agencies, seeing space factories that help make them safer,
that he found his way into various space as not only a very viable industry to more efficient and more intelligent. It’s
agencies and companies, holding roles diversify and grow the economy, but not just Alexa and Siri connecting to
like spacecraft engineer at the European also an industry that helped bring top your home sound system or turning on

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SPOTLIGHT | OQ TECHNOLOGY

can upload their data more frequently, to provide immediate and Technology commission (CST), and I’ve seen remarkable
feedback to their customers. advancements in the past few months that have taken many
years in other places. It’s clear to everyone at OQ Technology
Take the Saudi Aramco pilot project for example. OQ that Space is top of mind for Saudis, and we want to be apart
Technology placed several routers along the pipeline so that of that.”
sensors and cameras could also be installed. But the current
network of 3 satellites means that the data from these sensors Omar also speaks about the sense of pride he has, as an Arab,
and cameras are being uploaded to the cloud every few hours, returning to the Arab world with a space technology company.
versus constantly. This means that if a leak was detected, “I’m proud that Arab nations are now accessing this field, as it
precious minutes could go by without much warning. This is was very difficult for me when I was younger. But the timing is
primarily why OQ Technology closed its’ recent fundraising now right, and I look forward to supporting many young boys
round, to build and deploy more satellites in the coming year. and girls from this part of the world get their dream jobs at
space technology companies like ours.”
If you step back and think about it though, there are many
applications for OQ Technology’s technology. The company When asked what advice he had for the next Arab Space Tech
has a vision to commercialize its application across various Entrepreneurs, he said:
B2B industries, like Mining, Shipping, Agriculture, Oil &
1. Don’t be intimidated, just believe in yourself.
Gas, Transportation, and so much more. The company has
forecasted US $400 Million in global revenues over the 2. Never take no for an answer. Where there is a will, there’s
coming five years. Omar also says it’s a company that is a way.
inherently globally-minded, because space is one industry
that requires collaboration across all of humanity. They 3. Choose a career in something that you are deeply
recently were the first satellite IoT 5G operator to get licensed passionate about; entrepreneurship is a tough path, and
to operate in Australia, a large country that struggles with you must love what you’re doing to succeed.
comprehensive internet coverage. The latest data shows that
up to 11% of Australians are “highly excluded” from digital
services. OQ Technology recently opened its offices in Al
Khobar, Saudi Arabia, which it will add to its’ global network
of offices now in Luxembourg, Dubai, Kigali, and Athens.
With its patented technology, head start and funding, and
large pipeline of clients such as Aramco, OQ Technology is on
the right path to bring this innovative service to the global
market.

Having opened their offices in Saudi Arabia in October, the

OQ Technology team is still busy hiring and settling in. They
plan on building a large satellite control center in Saudi
Arabia that will serve the entire region. They also plan on
hiring 300 Saudis over the course of the next 3 to 4 years
to support that vision. Omar speaks excitedly about Saudi
Arabia and coming back to his home region after decades
away. “Often, people feel that they have to go to the USA to
start a space company; but that’s not true anymore. I’ve been
incredibly impressed by the Saudi government. It’s incredible
how fast they are bringing the space tech industry to the
forefront. Regulations have been thoughtfully developed by
the Saudi Space Commission and Communication, Space, Photo courtesy of QQ Technology & Nanoavionics

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SPOTLIGHT | ITSNUQTAH.COM

At the cross-section of Saudi’s

creative and digital economies She also credits being loud and
making noise, even before an MVP was
as the founder to be face-forward, and transaction speeds and low fees (gas
more accessible, which is unusual with prices). In the month of February 2021
Written by Erika Masako Welch
available. “I think founders of web3.0 the general crypto-punk population out alone, NBA’s Top Shot processed over
companies are often less face forward. there.” US$224 million in basketball-related
We’ve been loud and proud, and it’s NFT sales volume, with over 80,000
worked to our advantage.” The beta Salwa also comments on how unique buyers.
version of itsnuqtah.com was launched supportive the startup ecosystem in
in September 2022, hosting hundreds Saudi Arabia is today, and how valuable Nuqtah’s team are getting ready to raise
of live NFTs and with 3000+ users on that has been for her and her team. their seed round in Q4 2022, and from
a waitlist. “We’re onboarding our users She recalls getting calls from numerous the sounds of it, they’ll be raising a
slowly, releasing access to 10% of our leaders from the entrepreneurship large round to feed into their creator-
waitlist at a time right now, so as not to scene in Saudi to congratulate her on first economy ambitions.
lose the power of curation.” getting accepted into the accelerator,
and to reach out if she ever needed
Something creative seemed to be in the anything. “I truly get the sense that
stars for Salwa. In 2013, she exhibited everyone in Saudi is working hard to
her own artwork at the British Museum help each other succeed.”
under an initiative to educate Saudi
youth on the role of culture and the Nuqtah’s beta may only be a few
creative economy. She then received a weeks old, but plans for the startup
visual communications degree in her are nothing short of big, hairy, and
undergraduate studies. After working audaciously ambitious. “Nuqtah is one
at the start-up hub in Jeddah for a of twelve startups selected to be apart
few years, she felt called to merge of the Kingdom’s Unicorn Program,”
her entrepreneurial and creative Salwa beams. “We’re so excited about
sides together. “I wanted to do it for this, because this means that Nuqtah
the creatives in Saudi. I kept asking can work hand-in-hand with the
myself why there were genius artists government sandboxes to help build out
in Saudi working accounting jobs from and regulate the web3.0 space.”
9 to 5 when the Ministry of Culture
Nuqtah’s current founding team at their last team retreat. From left to right: and Monsha’at were both investing It seems Nuqtah is also planning on
Wajd, Shahm, Mohammed, Nouf, Murtada, Majid, Salwa, Noura & Jawhara. heavily in creative and entrepreneurial being much more than just an NFT
ecosystems. It just made sense to me marketplace. “We’re positioning
that a safe creative space like an NFT ourselves to become an infrastructure
Prior to embarking on her own start- in Canada,” explains 27 year-old Salwa, January 2022. Today she’s successfully marketplace that protected artists builder, with our own accelerator
up idea, Salwa had been immersed “I didn’t think I was ready yet.” raised pre-seed capital from 500 Global rights would work.” programs so that Nuqtah can help
in Saudi’s entrepreneurial ecosystem and Dubai-based Shorouq Partners, and create other web3.0 applications and
for the past five years, working as the This seems to be an all too common leads a team of 14 industry experts, She also felt that Nuqtah had to be start-ups, to be built upon our own
operations and community director for response when speaking to women of which 95% are Saudi. Whether it local, in order to succeed in Saudi. “It’s platform and blockchain technology,”
one of the largest entrepreneurial hubs founders and ‘wantrepreneurs’. “Many be Wajd, an ex-Careemer leading Ops not just about localization of language explains Salwa. This is an interesting
in the Kingdom. I was intrigued to meet women founders spend too much time at NUQTAH, or Majid spearheading or cultural nuances,” she explains, “it’s play perhaps inspired by global
Salwa, as I had been introduced to her planning, and waste precious time in strategy, gleaning from his past about understanding user behavior success stories such as Dapper Labs,
by one of her investors with a story getting started - which is where the real experience leading crypto syndicates in that is extremely different in Saudi a blockchain-based NFT and web3.0
about how Salwa had to be convinced to learning-by-doing starts,” says one of the UK – there seems to be no shortage versus the rest of the world. Take user infrastructure player launched in
accept financing and start her business. Nuqtah’s early believers and investors. of talent. Salwa beams, “I didn’t have to journeys for example, Saudi customers 2018, with a current valuation of US
“All I had was a pitch deck, which Salwa was convinced by investors to put out one job description. Youth are require localized payment methods, $7.6 billion. The National Basketball
was a thesis I developed as part of my start Nuqtah in December 2021, and gravitating towards entrepreneurship, this world should be accessible to our Association’s (NBA) “Top Shot” NFT
Master’s application to study at the she moved to Riyadh and entered the startups and new technologies like Kingdom as easily as the rest of the Marketplace was built on top of Dapper
Ontario College of Art & Design (OCAD) 500 Global accelerator program in web3.0.” world. Saudi users also expect to see me Labs’ flow blockchain, due to its fast

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MEET SAUDI’S
VENTURE
CAPITALISTS
In its early years, venture capital in Saudi Arabia was just a
few prominent family offices that filled funding gaps where
institutional banks couldn’t provide assistance. However, they
mainly invested in traditional sectors such as manufacturing
and trading, and tech or software start-ups had to rely on
bootstrapping or funds from friends and family. This is where
venture capital comes in, and its an investment vehicle that has
been ballooning in the Kingdom in recent years.

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KSA STARTUP INVESTMENT ECOSYSTEM

DEVELOPMENT TIMELINE
(NON-EXHAUSTIVE)

Prior to 2018, there were only a few venture capital firms KAUST’s Entrepreneurship Centre, Saudi Aramco’s
but the ecosystem had started to gain momentum with fund Entrepreneurship Centre, OQAL Angel Investor Network,
of funds like Jada and SVC injecting capital into first-time Wa’ed Ventures, Women Spark Angel Investor Network,
funds and co-investing in start-ups to de-risk and incentivize Vision Ventures and Ra’ed Ventures.
investments. Since 2017, the number of local VCs have
ballooned, predominantly investing in seed-stage and early- In this report, we look at who has supported the most Saudi-
stage start-ups. based startups, which are in turn, nurturing the Saudi startup
ecosystem. Wa’ed Ventures ranks No.1 with 43 Saudi startups
Today, there are over 65 VC firms, fund of funds, angel groups, in its portfolio as of October 28, 2022. 500 Global follows
incubators and accelerators that are headquartered in Saudi with 38 investments, and Impact46 and KAUST Innovations
Arabia and whom have invested in one startup or another. The Ventures are tied for 3rd place with 27 Saudi Startups in each
vast majority of them, over 90% have been established in the of their portfolios. All data from VCs have been obtained and
past 5 years, since 2017-2018. Those established prior to this, verified from the VCs themselves, and are up to to date to end
and prior to Vision 2030’s launch in 2016, are considered the of October 2022.
trail-blazers, and include players like BADIR’s accelerators,

Source: Lucidity Insights Research

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WHAT ARE THE FUTURE TRENDS

1. More maturity in the market means more growth-stage 4. More Interest from International Investors. Eight out
investing to come. We heard from start-ups, VCs and of 10 local investors we spoke to expected to see more
government-bodies alike that there is a major gap in international investors take interest in Saudi startups.

IN THE SAUDI START-UP

Series B+ growth-stage funding, which will continue The unit economics in the region is too good for investors
to widen as Saudi’s start-ups continue to mature at to ignore. The ROI per $1 million invested in startups
breakneck speeds. Some local and regional VCs are in the MENA region today is far greater than any other

INVESTMENT LANDSCAPE?
actively looking to raise growth-stage funds, while many region in the world. Couple that with improvements in
also believe that this is a role that international VCs can government regulations, strong centralized support for
increasingly play in the Saudi market, like Softbank and entrepreneurship, access to capital, and smart globally-
Sequoia have recently done. minded, internationally educated local founders – and
it becomes clear why Sequoia Capital, Softbank Vision
2. Bigger Deal Sizes = Bigger cheque sizes. As the market Fund and Founders Fund have already made their first
We spoke to key investors in the Kingdom, from venture capitalists, angel matures, investors need to be careful to allocate larger investments in Saudi startups.
portions of their funds to invest in subsequent rounds
investors, and fund managers, with one particular question: “What future with their startups, or to raise additional funds to write 5. Global Startups moving HQs or opening satellite operations
bigger cheques. in the Kingdom. With multiple VCs starting to look
trends can we expect out of the Saudi investment ecosystem?” outward to invest in global startups with a mind to help
Here is what we heard: 3. Entrance of Specialized Funds: The Saudi market is
already seeing specialized funds form to support
them enter and provide its products and services to the
Kingdom, an influx of international startups with Saudi
investments in deeptech, AI, health tech, biotech, crypto offices is expected in the coming 24 months.
and the metaverse, etc. There is also the expectation that
many global investors will start making investments in
the market with their global specialized funds.

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NOTABLE ANGEL INVESTORS IN SAUDI ARABIA NOTABLE ACCELERATORS IN SAUDI ARABIA

Incubator & Accelerator
Angel Investors

OQAL BIAC
Est.. Website
Est. Website
2007 www.biac.com.sa
2011 www.oqal.org

OQAL was the first angel investor network established in the Kingdom in 2011. OQAL is an endowment that was founded by Faris BIAC was the first company to be licensed to manage and operate incubators and accelerators in the Kingdom. BIAC is a
Al-Rashed in his home after meeting with a group of friends and acquaintances who shared the same passion and experience in subsidiary of the Saudi Technology Development and Investment Company (TAQNIA), which in turn is wholly-owned by the
developing and scaling promising entrepreneurial companies. Today, it boasts over 200 members from across Saudi Arabia and Public Investment Fund (PIF). BIAC has experience managing and operating over 20 incubators, accelerators and training
the GCC. OQAL is the conjunction of two Arabic words: Minds (Oqool) and Capital (Amwal). programs across the Kingdom to support the development of the SME and entrepreneurship sector.

Based off of publicly available data, OQAL has completed 34 deals to date across MENA, with the majority of deals (22) being It’s longest running Incubation and Accelerator program is the Badir Program, which at its height operated 8 incubators and
made on Saudi start-ups. OQAL’s most active funding year was 2019, when it completed 16 deals – 11 of which were for Saudi 4 accelerators across the Kingdom. It was born out of King Abdulaziz City for Science and Technology (KACST). 2019 was
start-ups. It is estimated that OQAL has deployed over US$11 million in venture capital since its founding. Badir’s most notable year, when its startups raised a combined US$62.9 million. Between 2007 and Q3 2019, the Badir Program
incubated 655 startups.

Angel Investors Accelerator

WOMENSPARK KAUST ENTREPRENEURSHIP

Est..
2013
Website
www.womenspark.co CENTER
Est.. Website
WomenSpark was founded in 2013 as the first female angel investor network in the Kingdom. WomenSpark was founded by 2010 www.taqadam.kaust.edu.sa
Deemah AlYahya, a digital economy enthusiast who has spent the past 20 years focused on growing the developer community and
tech ecosystem in Saudi Arabia, in various corporate and government roles. In 2021, WomenSpark made 5 investments totalling
over 1 million SAR. Four of the startups were led by female founders. It is estimated that WomenSpark has deployed nearly US$1 KAUST Entrepreneurship Center was established in 2010 to provide training and mentorship to general entrepreneurs on and off
million since its founding. campus.

TAQADAM is one of the initiatives launched by the Center in 2016. TAQADAM is a 6 month startup accelerator program
specifically designed for deeptech startups that require patient capital, launched in partnership with SABB. TAQADAM provides
Angel Investors non-dilutive, grant-based funding. $40,000 is awarded for startups that are accepted into the accelerator, and an additional $1

ATHAAL million is awarded to those selected for follow-on investments. To date, TAQADAM has graduated over 300 startups who have
raised over $60 million in funding.
Est.. Website
2018 www.athaal.co
Accelerator

500 GLOBAL
Athaal is an angel investor group based in Jeddah, that invests across the MEA region. It is estimated that Athaal’s angel
investors have invested over US $1.5 million.
Est.. Website
Angel Investors 2010 (2012)* www.mena.500.co

RIYADH ANGEL INVESTORS 500 Global is a global venture capital firm, headquartered in Palo Alto, California, that invests across stages with a focus
Est. Website on technology and innovation. 500 Global has been investing in entrepreneurs in MENA since 2012 through several funds,
2019 www.riyadhangels.com including 500 Falcons, and two Riyadh-based accelerator funds: Misk 500 MENA accelerator fund and Sanabil 500 MENA Seed
Accelerator fund, serving entrepreneurs across the region. In 2021, 500 Global established their MENA region Headquarters in
Riyadh Angel Investors (RAI) consists over 50+ members who are top executives at leading corporations across the Kingdom. Riyadh. As of September 2022, 500 Global has invested in 37 startups in Saudi Arabia.
RAI angels average a $10K to $100K cheque size per investor on deals, which target startups across the MENA region in the Seed Note(*): 500 Global was established in 2010, but later established its first Middle East presence in 2012.
stage, post MVP.To date, RAI have invested in 8 startups, and have deployed an estimated US$1.7 million.

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MOST ACTIVE INVESTORS IN SAUDI ARABIA

BY NUMBER OF ACTIVE SAUDI PORTFOLIO COMPANIES

MEET THE MOST

ACTIVE INVESTORS
IN SAUDI ARABIA*
(BASED ON NUMBER OF SAUDI-BASED STARTUPS IN THEIR PORTFOLIO)

The majority of VCs in the Kingdom’s entrepreneurial investor landscape focus on early-stage (seed) and
growth-stage (Series A) investments, to match both the maturity and the needs of the market. VCs highlighted Source: Lucidity Insights and VC interviews Note: All investors were consulted on these figures for verification (as of 28 October 2022)
here are illustrative, and non-exhaustive; they have also been ordered here from those with the largest group of
Saudi-based portfolio companies, first. It should be noted that it is typical for investors that focus on early-stage
investing to invest in a higher number of startups, and those with a later-stage focus to invest in less, due to the
ticket sizes being considerably higher the more mature a startup becomes.

*Note: “Most Active” is determined by the number of Saudi-based Startups in each of the VCs Portfolio.
This includes international startups that have significant operations in Saudi Arabia.

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WA’ED VENTURES
Backed by Aramco, WAED is a $500 million venture capital fund with the aim to invest in tech-based startups
Today, Wa’ed Ventures assumes an expanded responsibility when it comes to its role as one of the larger and most active venture
pushing the boundaries of innovation worldwide.
funds in the region. The fund has diversified its strategy to include a global-inbound investment mandate whereby target
companies are mandated to localize the operations in real terms. Startups backed by Wa’ed Ventures must relocate part of its
43 No. of Disclosed Portfolio Companies in Saudi.* core operations to Saudi Arabia, including tech teams and R&D functions. The focus will stay on emerging and underserved
technologies that will act as a catalyst to fill the technological gaps in the local ecosystem.
Year Established: 2013 Total Number of Deals: 68 Ticket sizes: Up to US$20 million
HQ: Dhahran, Saudi Arabia Average Number of Deals per Year: 6-7 Team Size: ~50
Wa’ed Ventures’ long-term vision and commitment provide local founders with the tools, networks, and infrastructure to ensure
success.
Assets under management: US$500 million Number of exits: - Percentage of companies in Saudi: ~85%
Number of portfolio companies: 52* Funding stage: Early/Growth stage Website: www.waed.net

*Note: the Number of Disclosed Portfolio Companies in Saudi refers to Saudi-born startups and/or imported startups with significant operations in the Kingdom.
*Wa’ed Ventures has invested in 52 startups over the past decade, all of which have significant operations in Saudi Arabia as a pre-requisite. 43 remain active.

SAUDI ARABIA BREAKDOWN BY FUNDING TYPE NUMBER OF INVESTMENTS

Source: Wa’ed Ventures, Lucidity Insights Research & Analysis

Wa’ed Ventures is a $500 million venture fund investing startups it bets on. Specifically, the firm seeks technologies
in the next generation of transformative startups which that present wide applications, geographical adaptability,
are taking advantage of disruptive technologies. Wa’ed and strategic relevance to the Kingdom, as well as to Saudi
Ventures tells us that they see entrepreneurs as their (and Aramco.
any VCs) biggest asset. They seek to partner with passionate
entrepreneurs disrupting traditional industries through Wa’ed Ventures believes in the importance of active post-
revolutionary ideas. The firm is one of the most active investment support to startups. Wa’ed Ventures provides
investors in the region, with $100+ million deployed in 2022 tangible operational support and resources, as well as an
alone. extensive network of customer and partner relationships to its
portfolio companies. To ensure that entrepreneurs with drive,
Being one of the earliest players in the Saudi venture space, passion, and focus reach their goals, Wa’ed Ventures provides
Wa’ed Ventures quickly outpaced the rhythm of the market mentorship, advisory, and access to industry experts and
when it came to adopting a risk-tolerant and thematic savvy investors that help create significant value.
investment approach. The fund aims to drive local economic
growth and diversification by becoming the partner of choice Aramco, being the sole backer of the fund, provides
for founders, by building long-term partnerships where Wa’ed wa’ed with matchless insight and decades of experience
Ventures actively participates in follow-on funding rounds. in different domains, including nascent technologies like
Wa’ed Ventures invests in startups from the early seed stages Artificial Intelligence, quantum computing, and blockchain.
to the mid and late growth stages with a ticket size of up to This is why Wa’ed Ventures was the earliest investor in
$20 million. advanced technologies such as Artificial intelligence and
supercomputing when the region was still more focused on
Wa’ed Ventures is a sector-agnostic fund; however, as a tech- e-commerce and platform business.
focused investor, technology remains the key factor behind the

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500 GLOBAL
500 Global is a global venture capital firm that invests across stages with a focus on technology and
innovation. 500 Global has invested in MENA through several funds, including 500 Falcons and the Riyadh-
based Sanabil 500 MENA Seed Accelerator Fund, serving entrepreneurs across the region. 500 Global has
invested in more 38 startups in Saudi Arabia.

38 Portfolio Companies in Saudi.*

Investment Stage: Multi-stage Industry Focus: Industry Agnostic Ticket size: US $100,000 and up

*Note: the Number of Disclosed Portfolio Companies in Saudi refers to Saudi-born startups and/or imported startups with significant operations in the Kingdom.

Amal Dokhan
General Partner, MENA,
500 Global

Entrepreneur.com spoke with Amal Dokhan, a General Partner corporate innovation programs. Reflecting on her decade
at 500 Global MENA who is responsible for overseeing the of experience in the Saudi entrepreneurship space, Amal
Sanabil 500 MENA Seed Accelerator program and fund. says “what I love to see is the pace at which the market is
Dokhan says, “500 Global invests across stages. In Saudi maturing. Today, many of our founders are people with 10
Arabia, as the market matures, we are starting to see more to 20 years of specialized experience in their field, who’ve
requests for Series A investments.” She continues, “Some left their careers to found a startup that attempts to solve
people might not be aware of this, but the Sanabil 500 MENA challenges that are often hidden from view. This influx of
Seed Accelerator Fund also makes investments outside of the seasoned entrepreneurs also says a lot about the change in
accelerator. We’ve made seven direct investments thus far.” mindset with regards to entrepreneurship in the Kingdom.”
Prior to joining 500 Global, she was an active angel investor
in Saudi Arabia, and was also the Manager of Learning and To read Amal’s remarks on Women in Venture Capital, see our
Design at the Entrepreneurship Center at KAUST where she special feature on the topic on page 83.
co-designed and led the TAQADAM accelerator program and

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IMPACT46
Impact46 is an asset management and advisory firm established in 2019, focused on alternative investment
opportunities.

27 No. of Disclosed Portfolio Companies in Saudi.*

Year Established: 2019 Total Number of Deals: 45+ Ticket sizes: -
HQ: Riyadh, Saudi Arabia Average Number of Deals per Year: 9-10 Team Size: 13
Assets under management: More than US$ 1.3 billion Number of exits: 3 Percentage of Companies in Saudi: 82%
Number of Portfolio Companies: 33 Funding stage: Early & growth stages Website: www.impact46.sa

*Note: the Number of Disclosed Portfolio Companies in Saudi refers to Saudi-born startups and/or imported startups with significant operations in the Kingdom.

SAUDI ARABIA BREAKDOWN BY FUNDING TYPE NUMBER OF INVESTMENTS

Source: Impact46, Lucidity Insights Research & Analysis

The firm’s name comes from Riyadh, the number of startups maturing in the following the universal unicorn trends.
city in which Impact46 is based, which market whom were entering into the We are backing the Asanas, Stripes, and
sits on the planet’s 46th longitudinal growth stage. With the combination Paypals of the Saudi market.”
line. In a few short years, Impact46 of both seed and growth stage
has made its mark predominantly investments we continue to follow
investing in Saudi start-ups (27 out our investment thesis and identify
of 33 portfolio companies are Saudi market opportunities as they mature,
startups), and have already seen 3 for example we notice many legacy
successful exits in Jahez (IPO’d in 2021 software solutions in the region are ripe
to reach unicorn status), Tamara and for disruption in the local market as we
Lendo. continue to meet local startup software
providers.”
Entrepreneur.com speaks to IMPACT46
Partner, Basmah Alsinaidi, to “With regards to our investment thesis,
understand more about the VC firm. we are sector agnostic, but have a
“When we launched our first seed- “follow the unicorns’ strategy to de-
stage fund in 2019, our original target risk our investments. Saudi Arabia
was to earmark 70% of the fund for is still developing its way to position
Saudi startups. Today, close to 90% of itself as a leading ecosystem in terms of
our funding has gone to Saudi-based developing new technology solutions;
startups. The rest have gone to startups however until we reach that leader
in the UAE, Egypt. status, it is our conviction that Saudi
Arabia is a strong copy-cat “follower”
Alsinaidi continues, “It was important market at present. That’s why we have Basmah Alsinaidi
for us to launch a growth-stage fund invested heavily in fintech, marketplace Partner, IMPACT46
in 2021, to partner with the growing solutions and on-demand services

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KAUST INNOVATION VENTURES

KAUST Innovation Ventures supports the University’s pipeline of deep-tech based startup companies. It
also invests in high-profile international technology companies willing to establish their operations in Saudi
Arabia and to benefit from synergies with KAUST.

27 No. of Disclosed Portfolio Companies in Saudi.*

Year Established: 2010 Average Number of Deals per Year: 8-10 Team Size: 8
HQ: Thuwal, Saudi Arabia Number of exits: 2 Percentage of companies in Saudi: >90%
Number of active portfolio companies: 30 Funding stage: Seed to Early stage Website: www.innovation.kaust.edu.sa
Number of companies invested : 40 Ticket sizes: US$100K to US$2M

*Note: the Number of Disclosed Portfolio Companies in Saudi refers to Saudi-born startups and/or imported startups with significant operations in the Kingdom.

KAUST Innovation Ventures emissions, patient capital is

STAGE OF INVESTMENT
manages a portfolio of required. Unfortunately, there
homegrown KAUST spin- is not enough patient capital in
outs and also international the market today.”
deep-tech startup spin-ins.
The Fund aims to grow an Ahmed continues, “the good
innovation and technology news is, we are seeing a gradual
investment community and evolution and shift, and we
attract international investors hope the next wave of VCs will
and VCs to the emerging Saudi fill these whitespaces. We’ve
technology ecosystem. We already seen local Corporate
become a long-term strategic VCs like Savola take an interest
partner of these ventures in deeptech-Agtech companies,
through seed to early-stage and a number of international
investments. Startup companies VCs with a deeptech focus take
are curated through their interest in various startups
entrepreneurial programs such in the market as well. That’s
as Taqadam and Destination the beauty of international
Deep Tech. investors coming to the market,
they bring specialized people to
Hattan Ahmed, add value to the ecosystem and
Entrepreneurship Director at bring global aspirations to local
KAUST, spoke to us about the startups.”
importance of deeptech VCs
and funds like the Innovation
Venture Fund. “Deeptech
fundraising has got a lot of
SECTOR white space in Saudi Arabia.
There has been significant
growth over the past few years
in fintech, SaaS and ecommerce
transactions, but there is still
a significant gap in deeptech
investments.”

He continued, “when we’re

talking about startups
specialized in quantum
computing for energy
management, or startups Hattan Ahmed
Source: KAUST & Lucidity Insights Research developing high performance Entrepreneurship Director, KAUST
concrete with low carbon

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RAED VENTURES
RAED Ventures is an early and growth stage venture capital firm established in Riyadh in 2015.

20 No. of Disclosed Portfolio Companies in Saudi.*

Year Established: 2015 Total Number of Deals: 67 (31 in KSA, 34 in MENA, Average Ticket sizes: $1m to $3m (first
HQ: Riyadh, Saudi Arabia 2 in Rest of World) cheque)
Assets under management: - Average Number of Deals per Year: 8-9 Team Size: 10
Number of portfolio companies: 39 (20 in KSA) Number of exits: 5 (full and partial exits) Percentage of companies in Saudi: 51%
Funding stage: Early stages Website: www.raed.vc

*Note: the Number of Disclosed Portfolio Companies in Saudi refers to Saudi-born startups and/or imported startups with significant operations in the Kingdom.

SAUDI ARABIA BREAKDOWN BY FUNDING TYPE NUMBER OF INVESTMENTS

Source: RAED Ventures, Lucidity Insights Research

RAED Ventures partners with exceptional

founders building transformative
companies in the MENA region. The firm
was also the first private VC established
in the Kingdom in 2015. 20 out of 39
companies are Saudi based. The firm has
had 5 successful exits to date, though none
yet from its Saudi startup roster.

RAED Ventures had this advice for

Entrepreneurs and Founders:

1. Choose a co-founder that compliments

you professionally and ideally
personality-wise. There must be
mutual harmony between the co-
founders
2. Customer-centric strategies are more
likely to make you a market winner.
3. Spend growth money only after you are
satisfied with the product-market-fit
level

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VISION VENTURES
Vision Ventures (VV) is a VC by entrepreneurs, for entrepreneurs. Its team are ex-founders who have the mission of
helping founders succeed. VV invests in early stage tech startups in the Seed and Series A funding rounds. Vision
Ventures is a sector agnostic VC, but has particular interests in the Cloud, SaaS, Cybersecurity and FinTech sectors.

20 No. of Disclosed Portfolio Companies in Saudi.* Haitham Mohamed

Year Established: 2016 Total Number of Deals: 86 Ticket sizes: Up to US$3 million Bu-Aisha Al-Amad
HQ: Dammam, Saudi Arabia Average Number of Deals per Year: ~15 Team Size: 10 Co-Founder Chief Financial
& Investment Officer, Vision
Assets under management: Undisclosed Number of exits: 4 Percentage of companies in Saudi: ~45%
Manager, Vision Ventures
Number of portfolio companies: 47 (20 Saudi Startups) Funding stage: Early stage / Growth Website: www.visionvc.co Ventures

*Note: the Number of Disclosed Portfolio Companies in Saudi refers to Saudi-born startups and/or imported startups with significant operations in the Kingdom.

SAUDI ARABIA BREAKDOWN BY FUNDING TYPE NUMBER OF INVESTMENTS

Vision Ventures has inked over 86 deals and built a portfolio have in Saudi companies are a direct result of the level of
of 44 startups, of which 17 are Saudi companies. Over half of maturity we see in founders as well as the level of market
which have been invested in in the past 24 months. On this readiness of the overall ecosystem.” Al Essa concludes, “the
Al Essa speaks to how far the Saudi eco-system has come in success we’ve seen over the past few years with Salla, The
such a short period of time. “Back then [2016], it was really Chefz, Gathern, Calo, Tamara, Foodics, Haseel and many
difficult to find an experienced founding team starting an others is something we are very proud of. And we’re sure
innovative technology startup that we could get excited about there are a lot more success stories being written today!”
Source Vision Ventures, Lucidity Insights Research & Analysis
and that could shake up an industry. Today, the interest we

Since establishing in 2016 in Dammam, Vision Ventures has

invested in 47 companies, 20 of which are Saudi-based. The
firm has seen 3 successful exits thus far, including MENAbytes,
POSrocket, and Munch:on.

Vision Ventures was launched in 2016 in order to diversify

its’ parent company’s business, Sahara Net, which was heavily
dependent on Internet Services. In 2018, VV moved from a
CVC to GP/LP structure, to become an independent privately
run Venture Capital firm. Kais Al Essa, Founding Partner &
CEO of Vision Ventures explains, “we saw gaps in the market
that we knew innovation is one way to bridge them fast;
therefore myself and my partner Haitham BuAisha launched
Vision Ventures to invest in these technology startups.”

Vision Ventures has inked over 86 deals and built a portfolio

of 44 startups, of which 20 are Saudi companies. Over half of
which have been invested in across the past 24 months. “Our
investment thesis has changed a lot since the preliminary
years, in terms of geographic focus, as we now focus mainly on
the MENA region,” explains Al Essa. “We find that early-stage
startups find our experience in the region and advice very
valuable to them, often proving crucial to their success and Kais Al Essa
Founding Partner and
growth. This is also why we’ve focused more on early-stage
CEO, Vision Ventures
startups in the pre-seed to Series A stages.”

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STV
STV established itself in 2018 and is the largest privately-held technology VC investment firm launched in
the Middle East to date.

19 No. of Disclosed Portfolio Companies in Saudi.*

Year Established: 2018 Total Number of Deals: 45*, (of which 31 were Funding stage: Growth stage
HQ: Riyadh, Saudi Arabia for Saudi startups, 12 were rest of MENA, and Ticket sizes: $5M to 50M
Assets under management: $800,000,000 2 Global) Team Size: 20
Number of portfolio companies: 29*, (of which 19* are Average Number of Deals per Year: 8 Percentage of companies in Saudi: 66%
based in Saudi) Number of exits: 1 Website: stv.vc

*Note: the Number of Disclosed Portfolio Companies in Saudi refers to Saudi-born startups and/or imported startups with significant operations in the Kingdom.
*Includes undisclosed rounds/portfolio companies

SAUDI ARABIA BREAKDOWN BY FUNDING TYPE NUMBER OF INVESTMENTS

Abdulrahman Tarabzouni
Founder and CEO
STV
Source: STV, Lucidity Insights Research & Analysis

With over $800 million in capital, raising its second fund to replicate the came to conclusions that would help originally planning on raising a few Tarabzouni and his team seem major amplifier – that have the ability
STV backs and scales the region’s most same investment strategy of the first him embark on his VC journey. “Spend billion dollars for our first fund, but you particularly enthusiastic about to transform communities, cities,
exciting and disruptive technology fund. a little time in Silicon Valley, and have to remember that at that time, the investing in local startups across the economies, and societies in very
companies, primarily focused on you realize the formula for success entire MENA region had $800 million region. He juxtaposes the US market exciting ways.
growth-stage technology. 19 out of We spoke to STV’s Founder and CEO, isn’t rocket science, it’s quite straight or so being invested into it each year. to the MENA market. “In the US, VCs
STV’s 29 portfolio companies, and more Abdulrahman Tarabzouni about the forward actually: it’s capital, plus a So, we decided to raise a $500 million optimize for returns because there are On the types of investments STV
than 2/3rds of STVs deals are inked state of Venture Capital in Saudi and concentration of very smart people, and fund, and we had a global investment a plethora of (startup) options to is looking at, Tarabzouni explains,
with startups with significant Saudi the greater MENA region. Tarabzouni a supportive ecosystem.” Tarabzouni strategy at the on-set, because, quite choose from. In the MENA region, “there are three waves in which we
operations. has had a colorful career in tech said he had a very strong conviction honestly, we didn’t think the local we can not only do that but also as investors can invest. First, there
in the region and globally, working from the very beginning, that the markets could absorb this much can absolutely transform and create is the ‘copy-cat model’ wave; which
STV believes there is a strong and with Google in its formative years Middle East region should build our capital.” value in some markets with the is the development of the Amazons,
increasing dichotomy between digital in the region, where he started their own technology, champion our own implementation of some of the most Ubers, Instacart, and Deliveroos
supply and digital demand in the ‘Emerging Arabia’ operation and built it talent, fund it with local capital and How pleasantly surprised Tarabzouni basic digitization efforts. Of course, we of the world but customized to the
MENA region; the areas where supply to become Google’s 2nd fastest growing nurture and develop this ecosystem and his team were, when they realized focus on generating returns for our LPs, local market. The second wave is the
has yet to meet demand is referred to region globally for a few years. Today, with selective outside support. “At STV, quite quickly that the region could but it’s the opportunity to transform ‘Indigenous Innovation’ wave; this is
“white spaces”. We identify these white Google’s team in the region number in we essentially gathered a syndicate of absorb the capital. Their investment entire economies that excite us every where you have hyper-local use cases
spaces and invest in companies that we the thousands. After working to develop people who believe in this mission.” thesis went from geographically day.” and culturally adapted bolt-ons or
believe will become the leaders in these Android and Google’s Mobile business agnostic, sector agnostic and stage- adjustments to the copy-cat model. The
segments and future market champions. in Russia, Eastern Europe, and Middle Tarabzouni remembers vividly looking agnostic to, exclusively MENA-focused, Hearing Tarabzouni speak, you third wave is seen when indigenous use
In pursuit of our ambition to build East and Africa, he ran Global new at the ecosystem and fund allocation looking predominantly at growth stage begin to realize that there are major cases become exportable. The beauty
and scale the region’s top technology business development as an executive strategy in its early days in 2017-18. startups while identifying a few early- opportunities to bridge the gap of the Saudi market is that we have
companies, STV remains series- and at Google’s global HQ in Mountain “We felt that we were bullish at the stage opportunities, and a focus on B2B between the region’s potential, and seen all three waves take place in Saudi
tech-sector agnostic. STV is currently View, California. There, Tarabzouni time,” says Tarabzouni. “We were and B2C SaaS companies. where the region is today. Technology almost simultaneously.”
and technology startups being a

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When it comes to the biggest pain points Tarabzouni sees on

the horizon, he simply replies, “Talent. Helping our startups
hire C-level execs is one of the biggest ways in which we are
supporting them today.” Today, as the startup ecosystem is
still too young, especially in Saudi Arabia, there are limited
experienced techies that have graduated from one successful
startup exit to mentor or become part of the 2nd generation. And
because of the cost of living and limited supply of top tech talent
in Saudi Arabia, it is often cheaper to hire data scientists in
parts of Europe than to hire them at home. Though we live in a
globalized world where hiring data scientists out of market seems
reasonable – it’s not the most sustainable or healthy approach
for the ecosystem’s holistic development. On this, Tarabzouni
remarks, “remote work can work, but given how different markets
in MENA are, you really do need to have data scientists to be on
the ground to understand consumer behaviour.”

With regards to STV’s own play book, Tarabzouni says that they
are looking to create the next digital giants of the Middle East,
and in order to do that – they need to assess who is going to win
the Saudi market. “The startup in its sector that wins the Saudi
market will be the regional incumbent, and that’s who we are
looking to back.” After they back the Saudi winner, they expect
the Series B cheque to be used towards M&A consolidation across
MENA, and then pre-IPO and list on the Saudi Tawadul exchange.
“Saudi’s market that has scalability paired with its healthy
capital markets make it core and critical to MENA startup success
stories.

When we ask Tarabzouni to provide his top 3 pieces of advice for

startup founders today, he doesn’t skip a beat:
1. Know What You’re Getting Yourself Into. “Startups are hard,
and they are a long-term play. You’ve really got to have
passion for the work and for the problem you are trying
to solve for, so that you have the stamina to outlast your
competitors.”
2. Not all Dollars are Created Equal. “Founders need to be
intelligent about the dollars your raising and who you’re
putting into your cap table. Your choice of who’s investment
you take is, at the end of the day, your choice. And who your
investors are can either make you, or break you.”
3. Tackle a BIG hairy problem. “Swing for a home run. Make
sure that the problem you’re trying to solve is big enough
that you and many others can chew on it for many years.
Too often we see startups playing too small, with limited
scalability options.”

Finally, Tarabzouni reflects on what’s to come. “Lastly, it is

important to emphasize how truly exciting the next 7 year vintage
for MENA is. On a relative and risk adjusted basis, MENA is a
better per dollar investment ROI than most of the rest of the
world for Venture Capital. There is so much room to grow, there
is an exciting investment alpha in tech that needs to be captured
here, and we at STV believe that 45 new unicorns will emerge out
of the MENA region in the next 7 years.”

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HALA VENTURES
HALA Ventures is a Saudi VC firm which started operating in 2014 under the umbrella of its affiliate company,
Financial Horizon Group, as a Corporate Fund investing in various Asset-Classes including Venture Capital.
HALA Ventures was later established as a stand-alone VC firm in 2018, with offices in both Khobar & Riyadh.
When we begin discussing why Saudi

14 No. of Disclosed Portfolio Companies in Saudi.*

Arabia is such a hot market, Abussaud has
an interesting take. “It’s population and
scalability, but its also purchasing power
Year Established: 2018 (Previously existed Number of portfolio companies: 27 Funding stage: Early- growth stages and the consistency of that purchasing
since 2014 under Financial Horizon Group) (10 in KSA, 16 in Rest of MENA, 1 in RoW) Ticket sizes: US$ 250,000 - US$1,000,000 power. Saudi Arabia doesn’t really have
HQ: Al Khobar, Saudi Arabia Total Number of Deals: 33 Team Size: 8 that a summer lull period like some of is
Assets under management: Undisclosed Average Number of Deals per Year: 8 Percentage of companies in Saudi: 37% neighboring countries. 70% of the users
Number of exits: 3 Website: www.halavc.com on platforms in Saudi are local Saudis, so
they might go on holiday here or there,
*Note: the Number of Disclosed Portfolio Companies in Saudi refers to Saudi-born startups and/or imported startups with significant operations in the Kingdom.
but most of them stay right here in the
Kingdom all year around.” And for those
SAUDI ARABIA BREAKDOWN BY FUNDING TYPE NUMBER OF INVESTMENTS reasons and more, Hala Ventures seems to
be increasingly betting on Saudi startups.
Until 2018, Hala Ventures really didn’t
invest in any Saudi startups, choosing
instead to back founders in the UAE, Egypt
and Jordan. Today, it seems the tides have
turned, and investments in Saudi startups
are multiplying. “Today, one-third of our
portfolio are Saudi startups, and we only
started investing in Saudi shortly before the
pandemic.”

“Investors and startups shouldn’t

Source: Hala Ventures, Lucidity Insights Research & Analysis underestimate the Saudi market. Vision
2030 clearly states that it is trying to
expand SME driven GDP from 20% to 35%
heart; he comes from an institutional SVC and Jada both came online with by 2030. That additional 15% accounts
banking background, having spent 2 their Fund of Funds with an combined for more than US $560 million annually.
decades working at leading institutional US$ 2 billion to deploy. At this time, It’s no small feat, but that’s also why
banks and running a private investment I also saw a lot of family offices starting there is support from every possible level
fund, before embarking on a full-time to allocate a portion of their annual of government, because startup success
VC career. Regarding Hala Ventures’ investments to go towards tech startup in the Kingdom, is success for the entire
formative years, Abussaud says, investments.” Kingdom.”
“you know, back then, my business
partner and I were doing a lot of angel When it comes to advice for founders in the
investments and decided to join forces Kingdom, Abussaud had this to say:
by forming a Corporate Fund back in
2014 and realized that there really 1. Think Big & Think Expansion Sooner:
were no VCs in the market, and so Hala “Founders need to start thinking
became one of the first.” He continues, beyond the MENA region into the EU,
“Before then, family offices in some Asia, India and Africa. Investors need
sense laid a lot of the foundational scale. Success needs scale. So do it
Today, 37% of Hala Ventures’ portfolio groundwork for venture capital in quickly.”
companies are Saudi-based, with 10 the Kingdom, filling gaps and funding
deals inked in the Kingdom so far. To startups that institutional banks 2. Choose Investors Wisely: “Picking
date, the VC firm has seen 3 successful wouldn’t touch with a 10-foot pole.” investors as important as picking your
exits, though only one of the three exits wife or husband. They are partners for
was a Saudi-based startup. Abussaud continues, “2018-19 was life. Founders must identify who are
when we saw a real shift in the market. value investors, that are ready to go
Ali Abussaud the long-haul with you, and those that
Entrepreneur.com spoke with Founder Monsha’at came onto the scene with Founder and Chairman
and Chairman of Hala Ventures, Ali various well-funded initiatives to Hala Ventures are ready to invest into you in future
Abussaud. Abussaud is an investor at stimulate SMEs and entrepreneurship. rounds.

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SPOTLIGHT | SAUDI’S WOMEN IN VC

Women in Saudi’s Venture Capital Ecosystem

Written by Erika Masako Welch
MALE VS. FEMALE-LED SMES, Q2

Nora Alsarhan Amal Dokhan Basmah Alsinaidi Nora Alkadi Sarah Al Saleh Latifa BaNasr
Chief Investment Managing Partner, Partner, IMPACT46 Partner, Graphene VC Partner, Outliers Investor, STV
Officer, SVC 500 Global Riyadh, Saudi Arabia Palo Alto, California, USA Dubai, UAE (& Former CEO, OQAL)
Riyadh, Saudi Arabia Riyadh, Saudi Arabia Riyadh, Saudi Arabia

The issue of underrepresentation of For starters, one of the first 2030 Q2 2022, which shows an increasing
women in tech has been a long-standing targets that were met by the Kingdom, trend of women-led SMEs over the
issue around the world. When I was in was the target of 30% female past 5 years. In 2016, the same year
Silicon Valley studying at Stanford’s participation in the workforce across when Vision 2030 was launched,
Graduate School of Business in 2017, the country, which was surpassed only 2 out of every 10 registered
it was at the forefront of conversation ten years before target. Today, female businesses were women-led. Today,
amongst prominent VCs and tech workforce participation is still rising 45% of all registered small and medium
companies as the #MeToo movement and hovers at around 34%, more enterprises are led by women. This led Source: Monsha’at
gained momentum across the US. than double the 16% rate recorded in to the World Economic Forum (WEF)
Despite more women graduating 2015. This influx of women entering recognizing Saudi Arabia among the 5 or at least women on the leadership was at this time that Graphene decided try and source more female founders
than men from STEM degrees like the workforce has penetrated the tech most improved countries globally in teams of start-ups coming out of Saudi to allocate roughly 30% of their current into our deal-flow and accelerator
biological sciences, far less graduated ecosystem as well. In 2019, the Ministry closing the gender gap. Between 2021 Arabia, specifically in the e-commerce, active fund towards international programs. I’ve personally observed in
from computer sciences (18%) or of Communication and Information and 2022, Saudi Arabia saw the highest retail-tech and fintech space.” early-stage start-ups, including those recent months that there are more solo-
engineering (20%) degrees, according Technology (MCIT) set a target to increase globally. in the Saudi market. Alkadi added, founded women-led start-ups, while I
to a 2015 study1. increase the participation of women in Nora Alkadi, Partner at Graphene VC, “another reason why we might not see have seen more men working on start-
the tech sector by 50% by 2023 from Despite this formidable growth, the told us that it’s still rare for them to as many female founders as others is ups they have co-founded with others
Saudi Arabia is also keen to increase 2018 figures. The female participation unanimous sentiment amongst the see female founders from Saudi Arabia, because our investment focus is on the in the Kingdom.” When I ask her what
female participation in the venture rate in the tech sector has more than male and female stakeholders we but that might also be because of B2B space. Even though we are sector might be the meaning we could glean
capital (VC) and start-up ecosystem; doubled from 11% in 2017 to 28% in spoke to across the start-up ecosystem Graphene’s positioning and investment agnostic, some of the verticals we are off this observation, she shrugs with
though in its nascent stages, there is the third quarter of 2021, 10% higher was: we need more women in this thesis. Graphene VC was founded interested in include supply chain tech a smile. “Women are perfectionists?”
some very promising data, and perhaps than the European average of 17.5%2 space; we need more female investors, in Silicon Valley solely by a Saudi solutions, PropTech, Agtech, and B2B We laugh, but the question lingers for
some surprising data for some, coming according to an analysis of start-ups and we certainly need more female born entrepreneur who had an initial SaaS – all of which tend to be male- a few days and has me wondering why
out of the Kingdom. For a start-up registered in the capital city of Riyadh. founders. We want to see more of them, mission to invest mainly in US start- dominated industries, globally.” there are more solo female founders
ecosystem still in its infancy, and for It was also noted that female founders and the potential is there for more ups, with an eye to bring back some of in Saudi Arabia. During my time in
a country that traditionally had very were most evident in the e-commerce representation. that know-how to the Kingdom, as and Amal Dokhan, a General Partner at Silicon Valley, I had heard the opposite
few women in the general workforce to sector. when it might fit. Graphene only started 500 Global, sees hundreds of MENA phenomenon from many of the VCs
begin with– it’s remarkable how far the Basmah Alsinaidi, Partner at Riyadh- to focus on funding Saudi start-ups in start-ups go through their accelerator I spoke to. Many female founders in
country has come in such a short period Furthermore, interesting data has been based Impact46 shares, “I’ve recently 2020, when they saw the dramatic shift programs in Riyadh. She remarked, the West would wait for months or
of time. released by Monsha’at at the end of started to see more female founders in the Kingdom’s start-up ecosystem. It “We go out of our way at 500 Global to years to find the right co-founder, so

1
National Girls Collaborative Project 2
Endeavor Research Report

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SPOTLIGHT | SAUDI’S WOMEN IN VC

they wouldn’t have to go about the programming at KAUST, that is open prerequisite to success both within our
entrepreneurial journey alone. to and attended by participants from team and in our investment decisions.”
Saudi Arabia and across the MENA
Latifa BaNasr, Investor at STV and region. For example, 60% of our For Alkadi, it was a scholarship to
former CEO of OQAL - Saudi Arabia’s hackathon participants are Saudi complete her MBA in San Francisco
largest angel investors network women; and 49% of the startups that that altered her path. She had been in
said, “The speed at which female go through our flagship accelerator corporate finance for the 10 years prior,
participation in the entrepreneurial program, TAQADAM – which is first at KPMG as a financial analyst, and
and venture capital ecosystem has open to both local and international then at the Capital Markets Authority
evolved. In 2018, I remember going to startups – have female founders.” (CMA) in Saudi Arabia in their IPO
a major tech conference in Saudi, and This is remarkable in the deeptech and M&A division. “Moving to San
the only female speaker was Her Royal entrepreneurial scene, as recent data Francisco and being surrounded by
Highness Princess Reema Bint Bandar, released by the European Commission entrepreneurs and immersed in the tech
and female founders were hard to come shows that only 15% of deeptech ecosystem here, I caught the bug. With
by. This year, we saw at least 20 women startups in the EU have women my finance background, venture capital
featured in the media for leading founders onboard. was the most logical step for me to
tech startups in MENA, and we keep follow my new passion.” She added, “as
noticing the trend of more commercial When I ask Ahmed and his team why a Saudi woman myself, it’s incredibly
registers issued to women in Saudi. they think more women are interested important to empower more women
Although there are more today, I tend in entrepreneurship at KAUST than in Saudi Arabia, especially as many
to think we still have considerable room their male counterparts, he responds, of us didn’t grow up seeing women in
for growth. BaNasr elaborated, “At “I don’t know. But it’s fascinating, and leadership positions.”
STV, we are proud to have partnered someone should study it!”
with great women founders, such as Dokhan echoed the sentiment, “500
Latifah AlTamimi - founder of gathern, When I ask the women why they think Global is serious about diversity, and
and Afnan Sherbeeni - co-founder of we don’t see more female investors it’s apparent in our leadership. Our
Sabbar. On STV’s latest insights report, in Saudi Arabia, it’s clearly a difficult Global CEO and COO are both women,
we projected that MENA will be poised question to answer. Sarah AlSaleh, female founders across the region, I see being announced, Nora then joined the We’re also proud of the women that are
and many of our Managing Partners
to output around 45 unicorns by 2030, Partner at Outliers VC, was born and that this might be a trait more common Small & Medium Enterprise Authority leading many of the funds we invest in.
across the world are women. I think
and I am certain that women founders raised in Saudi Arabia. Being an ex- in women than men. I’ve noticed that (Monsha’at) as a founding team member There are more than 11 women partners
seeing that modelled in the firm’s
and investors will play an instrumental Googler, attempting a start-up in 2011, many women hesitate, and want to of their Equity Team. She spent several in several funds in the Kingdom,
leadership played a big part in my
role in that.” and joining a Fintech unicorn in New ‘be better prepared’ before they start years working with government to including but not limited to the women
deciding to join the 500 Global team.”
York before leading at a MENA tech anything. Today, my biggest piece of build the infrastructure to support the highlighted here - but also at Endeavor,
I spoke to Hattan Ahmed, the Head of company, she’s no stranger to the tech advice is to just start. The real learning development of a VC and PE investment Nuwa, Global Ventures, and VSQ.” Nora
Dokhan has been around the Saudi
KAUST Entrepreneurship Center, to ecosystem. But she says her career path only starts when you commit, and start ecosystem and spur on SME funding also explains to us that an analysis
entrepreneurial ecosystem since
comment on women in the Kingdom’s into venture capital wasn’t planned. to build on your idea.” in the Kingdom. Becoming Chief of the underlying startups that have
2013, having had stints at KAUST co-
start-up ecosystem. Ahmed remarked, “I was and still continue to be an Investment Officer at SVC seemed to be been funded through the VC’s SVC has
designing their TAQADAM Accelerator
“We’re currently seeing a fascinating operator at heart. I love to dig deep Perhaps more than anyone, Nora a logical next step in her career. supported - approximately 46% of total
program, Global Entrepreneurship
phenomenon at KAUST. As a university into the product vision and detailed Alsarhan, Chief Investment Officer at startup employment in the Kingdom are
Network, and as an active Angel
and entrepreneurial ecosystem that product metrics.” AlSaleh continues, “I SVC, has the most venture-groomed When I ask Nora about this issue around female.
Investor. When I asked her about her
is deep tech and research-focused, we didn’t naturally gravitate to investing resume. After studying Computer Women in tech and VC, she says, “I can
journey towards venture capital, she
are proud that 38% of our student early in my career, but once I made Information Systems at Prince Sultan only be objective if I let the numbers STV’s BaNasr adds, “I think women
replied, “I didn’t really realize that
body is female. As deep tech is an even the switch, it was clear that VC is not University, Nora spent five years at Ernst speak.” She continues, “at SVC, women need to start recognizing the value of
venture capital could be a career option
more specialized subset of the tech only about financial transactions. It’s & Young as part of their transaction are represented on the board and two our voice, and the value we bring when
for me until I saw an American woman
industry, it generally suffers from lower also a tool to realize the future and advisory services team. She then executive directors are women leading we take a seat at the table. Women
and founding partner of an all-woman
participation rates amongst women.” and materially unlock new value in completed her MBA and immediately the investments and legal, the core have a unique perspective that is a
VC come give a talk at KAUST in 2013.
Ahmed continues, “Interestingly, we’re the world. This is where diversity, be joined the Saudi Venture Capital business of the company. Overall, tremendous asset to any company, start-
A seed was planted right then and
witnessing very high participation rates it in gender, ethnicity, background, or Investment Company as an investment women represent 40% of our staff up, or investment firm. We should stay
there, but it took me 7 years until I
amongst women in our entrepreneurial thinking process matters. We see it as a associate. Off the back of Vision 2030 at SVC - and we’re proud of the fact. curious, and commit.”
made the jump. Now that I meet with

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WOMAN TO WOMAN: ADVICE

FROM SAUDI WOMEN IN VC TO
THOSE ASPIRING TO ENTER VC
Here are the top pieces of advice these women had for the
next generation of women in Saudi that want to become
founders or venture capitalists:

1. Be curious and be open to all learning and input. Whether 5. Don’t be afraid to take the first step. Get out of your head,
you’re a founder or a venture capitalist, it’s all about stop over-planning and get out there. Meet with angel
listening, constantly learning, and making incremental investors, incubators, accelerators and get feedback
improvements on your product every single day. on your idea. Just remember: while you’re busy over-
thinking your idea, someone could be developing a
2. Equip yourself with the necessary skills and competencies.
mediocre version of it and getting it out to market before
Building a career doesn’t happen overnight. You’ve got
you. Starting is the most important step, and learning
to take strategic steps towards acquiring the skills and
from failures along the way is part of the learn-by-doing
competencies you need over several years, and often
process. Commit.
times, decades. Build and gain the right experience to
achieve your goals. You don’t have to have it all figured 6. Build your network. Both being a founder and a VC
out - but if you want to be in VC, understand finance and requires you to be a people person. In both roles, you
cap tables, learn about negotiations and term sheets, need to get yourself out there, meet and recruit potential
strengthen business development skills, communications team members and co-founders, investors, and key
and network building. stakeholders that are going to help bring your vision into
reality. So start building your network now, schedule
3. Be humble, be kind and ask for what you need. Building
meetings with people you want to meet, and start having
a start-up requires help, from your founding team,
the conversations you want to have.
from your investors, from your board and mentors. All
stakeholders bring something different to the table, 7. Be Flexible. You might think you want to be a investor
whether that’s sweat equity, the idea or the capital – we today. Tomorrow, while you’re an investment analyst, you
all have to work together for the start-up to succeed. might meet a startup founder that blows you away and
Kindness, humility and focus on teamwork is critical for a inspires you to join an agtech startup. Who knows what
smooth ride on an inevitably bumpy road. the future will bring, just trust the process and remember
you can always change your mind. In fact, that is the one
4. Prioritize “like-valued” over “like-minded”. Surround
thing that is certain. The more life you experience, the
yourself with people who see differences of perspective
more people you meet and careers you come across, the
as an asset, not a liability. So long as your values are the
more opportunities to tweak your career of choice.
same, different perspectives can be expressed and used as
a tool to make your team stronger.

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CONCLUSION
Saudi Arabia is unequivocally booming. example, have made announcements Five years ago, the entire MENA region
has all the makings of a great startup
market. The pent up demand for digital
consumer and business tools and
solutions is so great, that startups have
trouble building fast enough to keep up
with demand.
many entrepreneurs we spoke to said,
“it was very uncool to be self employed.
Parents and universities were really
educating us to try and get top tier jobs
in government, which paid well and had
favourable work-life balance.” This is
entrepreneurship, SMEs, and its digital
economy to contribute significantly to
its future economy, regulatory bodies,
support infrastructure, deployed
capital, and incentives all should it be
follow suit like a targeted campaign.
It was the fastest growing economy that they will make 4x more VC was raising $800 to $900 million in a far cry from the Riyadh and Jeddah All signs read: “Got an Idea? Start
in the world in 2022. The recent oil investments in the next year, than it has venture capital each year, and today As investors flood the market, so do you visit today, where young people your startup in Saudi Arabia, and we’ll
price surge around the world indicates made in its 9 year cumulative history. Saudi Arabia has already surpassed the startup founders. In Saudi, there are are congregating at co-working spaces support you every step of the way.”
continued favorable conditions for US$ 1 billion in funding mark in 2022, an increasing number of seasoned and cafes, huddling over their laptops Competition is still young and nascent,
the Saudi economy, which is using its The government has also launched when we include both venture funding veterans leaving 20-year decorated coming up with their next move. and the barriers to entry for foreigners,
oil revenues to invest in Vision 2030 various stakeholders doing its part and PE funding. This is a formidable careers to found a startup. It’s not just whether real or perceived, are still high
strategy to diversify away from oil to stimulate entrepreneurship across achievement, one that Dubai only hit in the young, fresh-faced and bushy- Speaking to global investors, it’s hard enough that local Saudis have a head-
reliance. various areas, from Monsha’at to SVC 2021, after over a decade of nurturing tailed recent graduates. This speaks for any to come up with global examples start to create the local startups of their
and Jada, the Central Bank and various its own startup ecosystem. volumes about the cultural shift that where so much focus, energy, capital dreams. So come one, come all – don’t
It is also this oil revenue that the regulatory authorities and government is currently underway in the Kingdom, and resources are geared towards underestimate where Saudi Arabia is
government and private sector will entities built to support startup With a healthy population of 35 million where many Saudis are now dreaming entrepreneurship like they are currently heading today. By 2025, it just may
continue to feed into its startup founders and the burgeoning startup who are largely young, tech-savvy and of becoming an entrepreneur; this was in Saudi Arabia. With Vision 2030 become the regional startup heavy-
ecosystem. Wa’ed Ventures, for ecosystem. disposable income – Saudi Arabia largely unheard of ten years ago. As clearly indicating that it expects weight.

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APPENDIX:
THE KINGDOM’S
MACROECONOMICS
Welcome to the Kingdom of Saudi Arabia, the fastest growing major economy
in the world in 2022. Despite the pandemic, the Kingdom has managed to
grow at an impressive cumulative annual growth rate of 5.3% over the past
five years, and is set to grow by 7.5% in 2022. Despite the Saudi economy
shrinking by 12.5% in 2020 due to the pandemic, the economy made a
full recovery by 2021. It seems the Kingdom’s Vision 2030 is kicking into
high gear, and truly moving away from its economic reliance on oil, while
benefiting greatly from the recent uptick in energy prices around the world.

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TOP 25 LARGEST ECONOMIES IN 2022

GDP (USD BILLIONS)

DROP ME
A PIN

Source: International Monetary Fund

OIL RICH AND RELATIVE PERFORMANCE OF MAJOR ECONOMIES, 2022

DIVERSIFYING (REAL GDP; % CHANGE, YEAR ON YEAR)

Saudi Arabia is the 18th largest economy

in the world and the second largest in
the Middle East. Its GDP has grown at
an average annual growth rate of ~8%
since the launch of Vision 2030 in
2016, reaching US$ 1 trillion in 2022.
Though the Kingdom’s economy shrank
by 12.5% in 2020 due to the pandemic,
the Kingdom more than recovered past
2019 figures in 2021 and has further
grown in 2022 to touch US$ 1 trillion.
This rapid growth is driven by two main
drivers: the first is the Kingdom’s Vision
2030, a national top-down strategy
which aims to diversify the Kingdom’s
economy away from its reliance on oil.
Meanwhile, the recent surge in global
energy prices has helped Saudi Arabia
Saudi Arabia is located in Western Asia and occupies 80% of advantages as it is bordered by 7 countries, the Persian Gulf reap rewards for its oil activities that is
the Arabian Peninsula with a land area of 2.15 million sqkm. and the Red Sea which play a crucial role in global shipping financing the Kingdom’s diversification
It is the largest country in the Arabian Peninsula, second lines; the neighboring Suez Canal, which connects the Red Sea away from oil-reliance. Non-oil
largest in the MENA region and the 13th largest country in and the Mediterranean Sea and is operated by the Egyptians, activities formed almost half the GDP
the world, by land area. Its unique location gives it great is responsible for shipping 12% of global trade. last year in 2021. Source: EIU *Purchasing power parity

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SAUDI ARABIA GDP 2017-2022

(BILLIONS USD) EASE OF DOING
BUSINESS
Doing business has become easier in
Saudi Arabia as the Kingdom ranked
62nd out of 190 economies in the Doing
Business Report 2020, up 20 points
from 2016. It is based on 10 indicators
and its ranking has improved in 7 of
areas. Most notably, Saudi Arabia has
jumped 92 places for ease in starting a
business.

Source: International Monetary Fund

PERCENTAGE OF GDP DISTRIBUTION BY PERCENTAGE OF GDP DISTRIBUTION BY KIND OF

MAIN ECONOMIC ACTIVITIES 2021 ECONOMIC ACTIVITY 2021

Source: General Authority for Statistics, Saudi Arabia

Source: World Bank Ease of Doing Business Rankings

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Foreign Direct Investment in the Kingdom has increased

by 92.7% in 5 years, hitting a record-high last year since
2008 of US$19.3 billion. US$12.4 billion of that was due
to Saudi Aramco’s successful share sale of its subsidiary
Aramco Oil Pipelines Company to an international investor
consortium. In 2021, the government set an FDI target of
US$100 billion annually by 2030 and aims to increase
its GDP contribution to 5.7%. Over 4,400 new foreign
investment licenses were handed out by the Ministry of
Investment in 2021.

SAUDI ARABIA FOREIGN DIRECT INVESTMENT 2017-2021

(BILLIONS USD)

Source: World Bank

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 A SPECIAL REPORT / THE EVOLUTION OF SAUDI ARABIA’S STARTUP ECOSYSTEM

CEO Wissam Younane

[email protected]

DIRECTOR Rabih Najm

[email protected]

CHIEF CONTENT OFFICER

Erika Masako Welch [email protected]

DIGITAL SOLUTIONS DIRECTOR

Mahdi Hashemi [email protected]

RESEARCH ANALYST
Hind El Gharib

CONTRIBUTING WRITER
Ashok Raman

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