Saudi Arabia Leads Regional Venture Capital Funding with $412 Million in First Half of 2024
In a remarkable feat, Saudi Arabia has once again secured its position as the leader in regional venture capital funding, with a total of $412 million in the first half of 2024. This marks the second consecutive year that the Kingdom has maintained its top spot across the Middle East and North Africa region, despite a slight 7 percent year-on-year decline, according to data from MAGNiTT.
Mega-Deal Boosts Saudi Arabia’s Venture Capital Investment
A significant portion of the funding received by Saudi Arabia, 32 percent to be exact, came from a single mega-deal worth $130 million involving Salla. This deal stands out as the only mega-round in the region for the year 2024 so far.
Saudi Arabia’s Growing Influence in the MENA Region
Despite a 3 percent decline in deal flow activity, Saudi Arabia remains the second-most active country in the MENA region by transaction volume. The Kingdom now commands 30 percent of total deals, up from 25 percent in the first half of 2023. Additionally, Saudi Arabia’s contribution to the region’s total funding has increased from 38 percent to 54 percent, showcasing the country’s growing influence.
Fintech and E-Commerce Lead Investment Trends in Saudi Arabia
Fintech remains the most popular sector for investors by transaction volume, while e-commerce leads in funding. Two of the top five deals in Saudi Arabia originated from the e-commerce sector, reflecting the investor interest in these industries.
Strong Support and Strategic Policies Drive Saudi Arabia’s Success
Saudi Arabia’s leading position in venture capital funding can be attributed to strong support from entities like Saudi Venture Capital Co. and Jada Fund of Fund, along with strategic policies from the Ministry of Communications and Information Technology aimed at driving investment into the Kingdom. The increase in international investor participation further highlights Saudi Arabia’s appeal in the VC space.
Outlook for the Second Half of 2024
Looking ahead to the second half of 2024, Philip Bahoshy, CEO of MAGNiTT, anticipates a surge in activity, especially in the fourth quarter. He predicts potential IPO listings, late-stage investments, and continuous development at the early stage of the funnel, signaling a positive outlook for Saudi Arabia and the wider MENA ecosystem.
Long-Term Investments Shape Saudi Arabia’s Venture Capital Landscape
Bahoshy emphasized the importance of long-term investments in Saudi Arabia’s venture capital arena, highlighting initiatives to attract startups and investors to the Kingdom. With a focus on talent acquisition and the establishment of new funds, Saudi Arabia is poised for continued growth in the VC space.