A quick look at start-ups in Saudi Arabia

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This week we’re quoting Hasnae Taleb (Chief Investment Officer at Ento Capital)

What Taleb said:

“The Saudi Arabian ecosystem has experienced rapid growth in recent years. There are over 1,600 start-ups in the country, supported by a network of venture capital firms and government initiatives. The government is actively working to attract foreign investment and position the Kingdom of Saudi Arabia as a regional hub for innovation.”

It’s true.

Saudi Arabia really is working strategically to create good conditions for start-ups to launch and thrive. In 2023, start-ups receiving support from the country’s National Technology Development Programme (NTDP) closed over 49 investment deals, worth USD $750 million.

Speaking to The National News on the second day of LEAP 2024, Ibrahim Neyaz (Chief Executive of NTDP) said that start-ups accounted for over 50% of all investments in Saudi Arabia last year – with an economic impact of $1.45 billion, along with the creation of 7,300 new jobs. It was the second consecutive year that Saudi Arabia has recorded a figure over a billion dollars, according to Magnitt’s 2023 Mena Venture Investment Summary.

Other factors in start-up success here include…

“A large and young population with a growing disposable income,” Taleb said, and “the emergence of a number of successful start-ups that are attracting the attention of investors like us.”

It’s a powerful blend of ingredients for investor attention: government support, an emerging population of young professionals with income to spend, and a surge in start-ups that are disrupting industries and rapidly gaining traction.

We’ve spotted lots of Saudi Arabia start-ups making waves recently.

Like these ones:

●      Intravides: Developing augmented reality (AR) solutions for use by surgeons in the operating room.

●      Lendo: A peer-to-peer lending fintech platform that offers debt financing for small businesses.

●      Thya Technology: Providing computer vision services to enable the analysis of large image datasets, with an AI tool that allows users to generate their own, tailored detection model in a very short space of time (just a couple of hours, in fact).

●      Uvera: A biotech startup with portable kitchen technology that prolongs the shelf-life of food – using Ultraviolet-C light and vacuum sealing, instead of chemicals.

What’s it like to be a start-up founder in Saudi Arabia?

It’s a booming market – but that doesn’t mean everything about it is easy. With a high GDP per capita, Saudi Arabia is an expensive place to launch a business, which is an obstacle for some early-stage founders.

Investment is often necessary to get off the ground; but on the flipside, thanks to government support and increasing investor interest, raising that investment is easier in Saudi Arabia than in many other countries.

Recruitment is also a highly competitive area in the country right now, with start-ups having to offer attractive salaries and benefits packages to attract the talent they need. And founders also have to consider Saudization – a policy that means businesses must hire a quota of Saudi nationals. The quota varies depending on the size of the company; but it adds another layer to the recruitment process.

But in spite of cost and complexities, the start-up ecosystem here is set to go from strength to strength. It’s rich in diverse new businesses, backed by favourable trade structures and continued funding commitments – creating a market that offers future resilience alongside profitability.

In short, every bit of effort that goes into launching and growing a start-up in Saudi Arabia is worth it. There’s space for success here; and we’re pretty (very) excited about connecting with more of the country’s tech entrepreneurs at LEAP 2025.

Read our interview with Hasnae Taleb: Why investment banking isn’t just about making money

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Catch you next week,
Richard McKeon
Group Marketing Director

Mark your calendars for 📅 10-13 February 2025.