Saudi Startups Lead Regional Venture Funding in First Quarter 2024
Saudi startups are making a mark in the regional startup ecosystem, with a recent report revealing that they secured almost half of the total venture funding in the Middle East and North Africa in the first quarter of the year. The Kingdom’s burgeoning influence was highlighted by $224 million raised by Saudi ventures out of the total $429 million across the region, showcasing a robust entrepreneurial landscape in Saudi Arabia.
The surge in startup activity in March saw MENA startups raising $254 million across 54 deals, indicating significant growth compared to previous months and the previous year. This increase in investment activity was driven by events like LEAP24 in Riyadh, where Saudi startups made their mark with notable contributions, such as Salla’s substantial pre-IPO round of $130 million.
While the UAE and Egypt followed behind with $39 million and $7 million respectively, the majority of the quarter’s funding was directed towards software as a service providers, fintech, and e-commerce sectors. However, there was a noticeable absence of larger ticket sizes and later-stage investments compared to the previous year, with a preference for business-to-business models over business-to-consumer.
In addition to the funding landscape, the month was rich in mergers and acquisitions, including significant deals like MBC Group’s investment in Anghami and Classera’s acquisition of Expert Solutions. The announcement of substantial investment funds at LEAP24 further energized the startup environment, with initiatives like Investcorp’s $500 million fund and Oasis Capital’s $100 million fund focusing on supporting growth-stage and early-stage ventures, respectively, in Saudi Arabia and beyond.
Furthermore, the Saudi Esports Federation, in collaboration with other organizations, announced plans to unveil two funds under its Gaming and Esports Sector Financing Program. Saudi venture capital firms Merak Capital and Impact46 also announced funds of $80 million and $40 million respectively, while Plug and Play Tech Center announced a $50 million fund to nurture software and tech ventures in Saudi Arabia and the MENA region. Takamol Ventures also announced a $53 million venture capital fund to support early-stage tech companies in driving innovation.
Overall, Saudi startups are paving the way for innovation and growth in the region’s entrepreneurial sector, with investments and initiatives aimed at supporting and accelerating the development of the startup ecosystem in Saudi Arabia and beyond.
