Fintech funding in Saudi Arabia saw a significant drop of 74% year-over-year (YoY) in 2024, totaling US$182 million, according to a new report by Magnitt, a startup research and data platform, sponsored by the Saudi Venture Capital Company (SVC).
The figure marks the lowest level since 2021, when fintech funding stood at US$91 million, and represents a sharp decline from the peak of US$704 million in 2023. These data suggest a reversal in the growth trend observed in the previous years, historical data from Magnitt show.
Fintech shows resilient
Despite the steep decline in funding value, fintech remained a leading startup vertical in 2024, standing as the second biggest segment in funding value. Fintech trailed only e-commerce and retail with US$247 million secured in 2024.
However, fintech dominated deal activity, capturing 18% of Saudi Arabia’s funding transactions in 2024. Between 2023 and 2024, the number of fintech deals rose from 30 to 32, reflecting a strategic shift among investors away from pursuing large rounds of funding to favoring smaller and earlier-stage funding opportunities.
A shift towards smaller rounds
This trend indicates cautiousness among investors amid economic uncertainties, while still revealing confidence in the long-term potential of fintech. It’s further underscored by the relatively modest deal sizes seen in 2024. The largest fintech transaction of the year was a US$68 million Series B raised by fintech infrastructure platform Lean Technologies in November. Although this was the second-largest venture capital (VC) round in Saudi Arabia for 2024, it was the only fintech deal to rank among the top five across all startup sectors.
This pattern was not exclusive to fintech. Across all startup verticals, the proportion of late-stage deals fell from 4% in 2023 to a mere 1% in 2024, reflecting a broader trend of investor caution.
The decline in fintech funding aligns with a general downturn in Saudi Arabia’s startup landscape. In 2024, local tech startups secured a total of US$750 million, down 44% YoY from US$1.3 billion in 2023, the report shows.
Despite the dip in funding value, Saudi Arabia reached a new record-high of 178 deals in 2024, representing a 16% YoY increase and reflecting continued investor interest in the domestic startup scene.
Saudi Arabia maintains a strong position in MENA
Despite the decline, Saudi Arabia continued to be a leading recipient of VC in the Middle East and North Africa (MENA).
A separate 2025 Magnitt report, sponsored by the National Technology Development Program (NTDP), highlights the country’s remarkable progress over the past five years, revealing that Saudi Arabian tech startups secured 32% of MENA’s total funding and 24% of all deals between 2020 and 2024. This equals to a total of US$3.9 billion raised through 739 transactions.
During the period, VC funding grew at a much faster rate in Saudi Arabia than in the rest of MENA, posting a compound annual growth rate (CAGR) of 49% against 4%.
The prominence of Saudi Arabia within MENA reached a new milestone in 2023 when the country became the most funded nation in the region. This dominance continued in 2024, reflecting sustained robust investor confidence and effective ecosystem support.
Looking at deal counts, the report shows that while other MENA countries saw a 5% CAGR contraction in deal activity between 2020 and 2024, Saudi Arabia recorded an 18% CAGR growth. Furthermore, the record deal volume of last year underscores the growing confidence of investors in the Saudi startup ecosystem.
According to the report, several factors contributed to the growth of VC funding in Saudi Arabia, including the rise in accelerator programs, and the country’s rapidly expanding digital economy, and its growing pool of investors.
Between 2020 and 2024, the number of investors of Saudi Arabia-based startups grew at a 28% CAGR, outpacing the rest of MENA, which recorded a 10% CAGR.
The country currently boasts the largest digital economy in MENA at US$134 billion and a growing pool of over 393,000 skilled tech professionals, according to the NTPD.
Featured image credit: edited from freepik
