Saudi Arabia Attracts Diverse Funding Partners, Finalizes Over Half of Investment Deals in Q1 2024
Innovation and entrepreneurship have taken center stage in Saudi Arabia, drawing in a wide array of funding partners and culminating in the completion of more than 53 percent of investment deals in the first quarter of 2024, according to official data.
The latest report from the Ministry of Investment revealed that sports deals made up 19 percent of the total 64 deals during this period. The US and the UK led the way with 11 and five deals respectively.
The strategic location and strong economy of the Kingdom continue to attract foreign investors interested in backing startups. Houssem Jemili of Bain and Co. highlighted in an interview with Arab News that Saudi Arabia leads in technology spending in the Middle East and North Africa, with spending growing annually.
Saudi Arabia boasts a diverse range of funding partners, including government entities like the Small and Medium Enterprises General Authority (Monsha’at), large investment funds, and venture capitalists, offering both direct and indirect funding to startups and entrepreneurs.
Furthermore, the Kingdom’s substantial investments in the sports industry align with its Vision 2030 strategy, aimed at diversifying the economy, creating private sector jobs for citizens, and ensuring a sustainable future.
The Ministry of Investment, in collaboration with other government bodies, plays a crucial role in fostering the investment climate through various initiatives.
These initiatives include organizing 13 local and international events across different sectors like sports, technology, mining, real estate, and manufacturing during the first quarter.
Moreover, the ministry participated in investment forums between Saudi Arabia and several countries, as well as hosted specialized global events with international participation to attract foreign direct investment and strengthen bilateral relations with major trading partners.
In the first quarter, the number of investment licenses issued reached 3,157, marking a 93 percent increase from the same quarter last year, excluding licenses issued under the anti-concealment law enforcement.
The construction and manufacturing sector led the way with 47 percent of total permits, followed closely by vocational and educational activities, information and communication technology, accommodation and food services, wholesale and retail trade, and automobile repairs, accounting for 81.8 percent of total investment permits issued during this period.
Real estate activity saw significant year-on-year growth in investment licenses, surging by 253.3 percent. The Real Estate Future Forum held in Riyadh earlier this year resulted in agreements and memorandums of understanding valued at over SR100 billion ($26.6 billion), showcasing investor confidence.
Foreign direct investment inflows into Saudi Arabia reached SR72 billion in 2023, a 12.1 percent increase compared to 2022, demonstrating the positive impact of recent reforms on the investment ecosystem.
Saudi Arabia has made substantial progress across various global indicators, securing top positions in the Total Value of Venture Investment and Trust in Government Index, and ranking second in the PCSI Consumer Sentiment Index and World Competitiveness Ranking for Cyber Security.
The Kingdom’s commitment to fostering a conducive environment for investment and sustainable development is evident through initiatives like the Tourism Investment Enablers Program, aimed at enhancing tourism and hospitality facilities, and a new incentive package to support mineral exploration in line with Saudi Vision 2030 objectives.
Looking ahead, Saudi Arabia aims to achieve an FDI inflow target of SR388 billion by 2030, positioning itself among the 15 largest economies globally.