During May, Saudi Arabia Dominated The Startup Investment Industry - MENA startups, innovation, and tech news


During May, Saudi Arabia Dominated The Startup Investment Industry

During May, Saudi Arabia Dominated The Startup Investment Industry

According to data, Saudi Arabia topped the Middle East and North Africa (MENA) startup investment market in May. According to data from entrepreneurship site Wamda, over $110 million was raised across 35 agreements last month. And the bulk came from Saudi Arabia, where nine companies collected $46.6 million, the majority of which came from Sary, a business-to-business (B2B) marketplace that links small businesses with wholesalers, which received $30.5 million in Series B investment.

Word From Managing Director of Wa’ed

“It is not unexpected that venture capital deal-making is heating up in the Saudi market,” Wassim Basrawi, managing director of Wa’ed, Saudi Aramco’s entrepreneurship arm, said. He further continued, ” As the Kingdom emerges from the COVID-19 pandemic we’ve been seeing that for months.” Wa’ed has made venture capital investments in Saudi companies such as blockchain artificial intelligence startup IR4LAB, drone manufacturer FalconViz, and hydroponic technology company Red Sea Farms so far in the second quarter of this year.

“During the epidemic, public sector support for Saudi businesses grew, and several Saudi firms, such as Red Sea Farms, are beginning to attract foreign investors,” Basrawi stated. The B2B e-commerce industry drew the greatest attention, with $37.6 million raised across the MENA region. Financial technology (fintech) came in second with $18.5 million, followed by logistics with $10 million, education technology with $6.9 million, and tourism with $6 million.

Word From Hussain Al- Alawi

Millenium Associates’ Hussain Al-Alawi, an international partner and member of the worldwide advisory board said, “It’s no surprise that Saudi Arabia is the world’s leading source of startup funding, what we’re seeing in the area and throughout the world is that technology firms are driving investment, notably from VCs (venture capitalists), with fintech, med-tech, and agri-tech being particularly popular.”

He further said that the technology sector has driven about 70% of the company’s agreements this year across all countries, with Saudi Arabia being no exception. He continued “Saudi Arabia’s commitment to technology is apparent and coming from the top, which is assisting in the growth of both the tech startup culture and investment in the industry.

Projects like NEOM, as well as the outstanding work being done by the Public Investment Fund to assist realize Vision 2030, function as a catalyst for businesses aiming to disrupt and create, with funding from progressive funds supporting local entrepreneurs, individuals, and institutions.” Al-Alawi further continued, “The Kingdom’s youthful and well-connected population, as well as the sector’s transformation as a result of the COVID-19 epidemic, are driving both opportunity and investment,”

Female Role

The sole investment in a female-led business this month came from Saudi Arabia, with $6 million going to Gathern, a Saudi platform comparable to Airbnb. In comparison, over $100 million has been invested in male-led companies across the MENA area. This is a global issue, not simply a regional one. According to Crunchbase, women-led businesses earned only 2.6% of VC investment in 2019, despite outperforming their male counterparts. “However, I believe this is changing. We’re already witnessing a surge in female-led enterprises, especially startups.

Females are starting their own enterprises in successful family businesses, particularly in e-commerce, although many of them are self-funded or family-funded rather than seeking VC investment, according to Al-Alawi. He went on to say that a lot of his Saudi Arabian clients were female entrepreneurs from family offices who were beginning to explore outside their own enterprises for investment possibilities in female-led firms.

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