In 2023, Saudi Arabia asserted its dominance in the Middle East and North Africa (MENA) region’s venture capital (VC) landscape, with startup funding surging beyond the US$1 billion milestone for the second consecutive year, data from a new report by startup data platform Magnitt and supported by Saudi investment company SVC reveal.
Startup VC funding in Saudi Arabia last year reached US$1.4 billion, marking a remarkable 33% from the previous year. The amount elevated the country’s share of MENA’s overall startup VC funding from 30% in 2022 to a notable 52% in 2023. At the industry level, fintech took the top spot, making up 51% of Saudi Arabia’s deployed VC capital, the data show.
The momentum is expected to carry on in 2024 with the recent news that Saudi Aramco, the world’s largest crude oil exporter, had boosted its global VC arm by an additional US$4 billion, more than doubling the capital for Aramco Ventures from US$3 billion to US$7 billion, Gulf News reported on January 14.
The additional investment, which takes Aramco’s overall VC allocation to US$7.5 billion, will be dedicated to taking “game-changing solutions to the next level” and “contributing to Aramco’s long-term objectives,” Ahmad Al Khowaiter, Aramco’s executive vice president of technology and innovation, said.
Prior to the new capital allocation, Aramco Ventures managed three funds: the Digital/Industrial Fund, a US$500 million investment vehicle focusing on technologies of strategic importance to Aramco; the US$1 billion Prosperity7 Fund, which invests in disruptive tech ventures beyond the energy sector; and the US$1.5 billion Sustainability Fund, which invests in startups with the potential to support the firm’s ambition to achieve net-zero greenhouse gas emission.
Against the backdrop of Saudi Arabia’s burgeoning VC funding landscape, we’ve compiled a list of the most active fintech investors in the country’s fintech sector, showcasing the players whom were the most prolific in 2023 and exploring the startups they injected money into. For this list, we’ve used data compiled by FinArabia, a boutique fintech consultancy and advisory based in Riyadh.
Sanabil 500 MENA Seed Accelerator Fund
The Sanabil 500 MENA Seed Accelerator Fund, a collaborative effort of 500 Startups and Sanabil Investments, was the most active investor in Saudi Arabia’s fintech landscape in 2023, according to FinArabia.
The Sanabil 500 MENA Seed Accelerator Fund engaged in a total of four deals involving fintech companies from Saudi Arabia. These deals are Taskheer, a Saudi online platform that facilitates rotating savings and credit association (ROSCA) deals and which guarantees timely payments; Nqoodlet, a digital platform for companies to manage their expenses by providing their employees with prepaid cards; EdfaPay, a fintech startup that helps companies use their smartphones for payment; and Ejari, a company that offers a “rent now, pay later” service that gives tenants the convenience of flexible payment options.
Launched in 2021, the Sanabil 500 MENA Seed Accelerator Fund provides pre-seed and seed-stage startups across the MENA region the resources they need to validate and scale their business regionally and globally. Participating startups receive a US$100,000 investment from the Sanabil 500 MENA Seed Accelerator Fund in exchange for 10% equity. The 12-week program also offers founders one-on-one mentorship with a focus on business strategy development, fundraising, and growth. The accelerator consists of six programs run by 500 Startups over a period of three years for a select group of startups from Saudi Arabia and the wider MENA region.
The fund targets investment in approximately 100 startups, including other pre-seed and seed stage startups in MENA. More than 60 companies have so far graduated from the program.
Core Vision Investment Company
Core Vision Investment Company was the second-largest investor in Saudi fintech in 2023, participating in three deals last year, data from FinArabia show. These deals involved Qannas, a Saudi open finance platform; Takadao, a provider of community-owned financial services; and Oumla, a blockchain startup.
Core Vision Investment Company focuses on pre-seed stage investments, providing mentoring, resources, and connections to help founders develop their capabilities, networks, and resilience. The firm’s mission revolves around unlocking human potential through capital, recognizing that investing in the whole person, not just the business idea, is crucial for building successful companies and careers. It strives to be at the heart of the companies it invests in, offering critical support and guidance to bring entrepreneurial visions to life.
Core Vision Investment Company has a diverse portfolio that spans across sectors like software-as-a-service (SaaS), edtech, e-commerce, enterprise solutions, and fintech. The firm has invested in over 70 projects across 13 different sectors, injecting more than US$7 million into investments. Its portfolio’s value exceeds US$40 million.
Like Core Vision Investment, Sanabil Investments, a financial investment company wholly owned by the Public Investment Fund (PIF), was a notable investor in the Saudi fintech landscape in 2023, participating in three deals last years, according to FinArabia.
These deals involved Tamara, a buy now, pay later (BNPL) company; Lendo, a Shariah-compliant debt crowdfunding marketplace; and NearPay, a company specializing in payment infrastructure. They spanned across Series B, Series C, and Series A funding rounds, reflecting Sanabil Investments’ strategic approach to supporting startups at various stages of their development.
Founded in 2009, Sanabil Investments has established itself as a dynamic, nimble, and highly experienced team of investment professionals. The firm prides itself on providing partners with patient capital, the flexibility to invest across multiple funding rounds, and access to the regional investment ecosystem. Each year, Sanabil Investments commits more than US$3 billion in capital into global private investments.
Shorooq Partners asserted its position as a prominent fintech investor in Saudi Arabia, taking part in three deals involving Saudi fintech companies last year, data from FinArabia show. These companies are Tamara, Lendo and Amwal, a payment authentication startup, and these investments spanned Series B, Series C, and pre-seed stages.
Founded in 2017, Shorooq Partners is a leading tech investor across the Middle East, North Africa, and Pakistan (MENAP) region. The firm’s VC and venture debt funds invest in the most innovative seed stage and early-stage startups.
Shorooq Partners has built deep sectoral expertise in fintech, platforms, software, gaming and Web 3.0, and the firm has backed market leading disruptors including Pure Harvest Smart Farms, Nymcard, Sarwa, Lean Technologies, TruKKer and Mozn.
Shorooq Partners is headquartered in Abu Dhabi, United Arab Emirates (UAE) and has offices across Saudi Arabia, Bahrain, Egypt, Pakistan, and South Korea. As of 2022, the firm had made over 80 investments in more than 50 companies, boasting a gross equity value of US$1.5 billion. These investments had not only contributed significantly to the regional tech ecosystem but have also created over 5,000 jobs.
VC firm Vision Ventures is another investor that played a significant role in shaping the fintech landscape in Saudi Arabia last year, backing a total of three startups, according to FinArabia. These startups are NearPay; Rewaa, an omnichannel inventory management system, accounting and point-of-sale (POS) platform for the retail industry; and Spare, an open banking services provider, and spanned seed and Series A stages.
Established in 2016, Vision Ventures operates under the ethos of being “By Entrepreneurs, for Entrepreneurs”, embodying a founder-friendly approach that emphasizes building strong relationships with portfolio companies. The sector-agnostic VC firm focuses on early-stage startups in the pre-seed, seed, and Series A stages, explores diverse opportunities and strives to create meaningful synergies within its portfolio.
Operating with industry-standard VC terms and conditions, Vision Ventures invests either through direct equity or convertible notes, showcasing an openness to opportunities that add value to its portfolio companies. It takes a hands-on approach, offering valuable experience to assist founders in their entrepreneurial journey, enabling them to accelerate their companies’ growth and realize their visions.
Featured image credit: Edited from freepik