RIYADH, Saudi Arabia — Saudi Arabia came in third place for garnering startup funding in October, trailing only the UAE and Egypt, which took first and second place, respectively, a study carried out by Magnitt has found.
Venture capital funding for start-ups in the Middle East and North Africa increased by 20 percent yearly to more than $2.3 billion in the first three quarters of 2022, putting it on course to potentially surpass the total investments attracted in 2021, according to the report.
Saudi Arabia, whose startups raised $70 million across 12 deals, ranked third, with e-commerce enabler platform Zid grabbing the biggest chunk thanks to its $50 million Series B raise.
UAE attracted $460 million across 24 deals. Cleantech Yellow Door Energy received a massive $400 million raise, one of the largest investments ever recorded in the regional startup ecosystem.
Egypt raised $113 million across 18 deals. The top three fundraisers comprised fintech MoneyFellows with its $31 million Series B round, open banking platform Tilda with a $20 million Seed round, and B2B marketplace MaxAB with $40 million for its pre-Series B.
In another report published by MAGNiTT platform, the Saudi firm Trukker acquired the lion’s share of startup funding in the MENA region in September 2022.
In addition to the US$96 million Series B capital round, Trukker concluded earlier this year, it also raised US$100 million in pre-IPO financing, bringing the total funding for the year to US$320 million.
Entrepreneurship in KSA
Business incubator specialist at Nomow’s Sumaya Ali Algabbass told TRENDS that in the new technology era, economies of various countries cannot keep up with the pace at which the global economy is growing unless they adopt innovation.
Algabbass explained that by supporting the ecosystem from the ground up, business incubators are essential to the growth and success of startups, SMEs, and the ecosystem as a whole.
“Saudi Business Incubators are considered among the most effective leadership empowerment tools,” Algabbass said. “They are essential in achieving economic, social, and technical development, which are all mandated in KSA’s 2030 vision directives”.
New challenges
Raising capital, for instance, may have become more difficult for startups in the wake of the unfolding global and regional issues. But Algabbass remains optimistic.
“Vision 2030 directives are arguably among the best things that ever happened to the region in recent years,” Algabbass said. “Saudi Arabia and the GCC can maintain the positive progress needed to offset the adverse effects of whatever goes on globally.”
Monsha’at, the new startup-friendly laws, the government programmes, the educational system, and the ongoing financial assistance given to existing and future entrepreneurial support projects are just a few examples of the many things Saudi Arabia is doing to advance the startup economy.