Saudi Arabia’s venture capital (VC) market experienced remarkable growth in 2024, fueled by strong government support, an influx of international investors, and a thriving startup ecosystem. This surge aligns with the Kingdom’s Vision 2030, which prioritizes economic diversification and positions startups and VC investments as key drivers of transformation.

Government Initiatives and Vision 2030 Drive Success

Government-backed programs have played a crucial role in fostering this growth. Initiatives from the Ministry of Communications and Information Technology, the National Technology Development Program, and funding mechanisms like Jada Fund of Funds and SVC have provided essential support and infrastructure.

“Saudi Arabia continued to develop its venture ecosystem throughout 2024,” says Philip Bahoshy, CEO and founder of MAGNiTT, a leading regional data platform. “This was seen through multiple government programs and initiatives… as well as training programs and investment structures.”

International Investors Recognize Saudi Arabia’s Potential

Mohammed Alzubi, founder of Nama Ventures, a leading early-stage VC firm in Saudi Arabia, highlights the alignment between Vision 2030 and the Kingdom’s growing momentum in the VC sector.

“Three key factors stood out,” says Alzubi. “First, the continued support from Vision 2030 initiatives… Second, the influx of international investors who recognize the untapped potential in the Saudi market. Finally, the entrepreneurial talent pool in Saudi Arabia has grown exponentially.”

Resilience Amidst Global Challenges

Despite global economic headwinds and a slowdown in late-stage investments, Saudi Arabia’s VC market demonstrated resilience, outperforming many developed markets. Early-stage and Series A investments remained strong, forming the backbone of the Kingdom’s VC activity.

Success Stories Underscore Market Strength

Saudi Arabia’s VC growth in 2024 was marked by significant success stories, including:

• Tabby: This buy-now-pay-later fintech unicorn, now headquartered in Saudi Arabia, is preparing for its initial public offering (IPO), likely on Tadawul.
• Salla: An e-commerce platform backed by Nama Ventures, Salla is nearing unicorn status and also preparing for an IPO.

These successes highlight the strength and global appeal of the Saudi startup ecosystem.

Global Engagement and Emerging Trends

Several factors contributed to the surge in VC investments in Saudi Arabia:

• Strategic Vision: The Kingdom’s Vision 2030 has attracted international capital and encouraged global companies to relocate their headquarters to Saudi Arabia.
• Government Support Programs: Various government initiatives have further incentivized investment and supported the growth of the VC ecosystem.
• Global Events: Events like the Future Investment Initiative and LEAP have positioned Saudi Arabia as a global hub for innovation and entrepreneurship.

Emerging trends in the Saudi VC landscape include:

• Diversification: Investment activity has expanded beyond traditional sectors like fintech and e-commerce into areas such as IT solutions, food and beverage, and agriculture.
• Sector-Specific Funds: The rise of sector-specific funds led by experienced entrepreneurs is bringing specialized expertise and capital to niche areas.

A Promising Outlook for 2025

Industry experts are optimistic about the future of Saudi Arabia’s VC market. Key trends anticipated for 2025 include:

• IPO Readiness: More Saudi startups are expected to reach maturity and pursue IPOs.
• Growth in Later-Stage Investments: As the ecosystem matures, larger, later-stage investments are likely to increase.
• Continued Focus on Early-Stage Funding: Nurturing startups from their inception remains crucial, and early-stage investments are expected to continue growing.
• Deep Technology Investment: With strong support from institutions like KAUST and government programs, deep technology investment is poised for growth.