Saudi Arabia’s Startup Investment Poised To Set New Record
Source: PitchBook, Priyamvada Mathur
Photo: O JOUMNI on Unsplash
Venture-backed startups in Saudi Arabia have been bolstered by a confluence of favorable trends in recent years—including low interest rates, increasing urbanization, demand for online groceries, pro-business reforms and a sharp rise in oil revenues.
The momentum has catapulted VC deal value in the region, reaching more than $425 million so far this year, on pace to surpass record levels of 2021, according to PitchBook data.
Saudi Arabia is taking “impressive steps” to attract foreign investment and create employment in the private sector, according to a report by the International Monetary Fund earlier this month.
These initiatives include reforms designed to boost female participation in the labor force and sustainable management of oil revenues to prevent a return to previous oil-driven cycles of boom and bust.
As part of the Kingdom’s Vision 2030 strategy, the country launched the Financial Sector Development Program to move toward a cashless society and enable financial institutions to support the private sector.
The latest in the slew of freshly funded startups in the region is Tamara, a provider of a buy now, pay later platform. The company raised $100 million in a round led by Sanabil Investments, Arab News reported.
Several online grocery delivery startups, such as Nana and Sary, also raised significant rounds in recent years. Growing demand from consumers across the country to compare quantity, prices and quality is driving the growth of the online grocery market, according to a report by Research and Markets.