The Kingdom of Saudi Arabia's flag
The value of venture capital (VC) funding in Saudi Arabia declined 27% year-on-year (YoY) to $446 million during the first six months of 2023, according to a report by MAGNiTT.
The number of deals also fell 44% YoY to 54 in H1 2023.
With government support, Saudi Arabia is becoming a more attractive destination for startups and is well-positioned to become a leading hub for innovation in the Middle East as several initiatives have been launched to support the VC space.
The Kingdom recorded mega deals worth $289 million in the first six months, driven by two transactions of $156 million and $133 million by e-commerce/retail startups Floward and Nana, respectively. The two deals represent 65% of the total deals in H1 2023, with Floward and Nana individually making 35% and 30% of the total deals.
The following table shows the number of deals and value:
|
Number of VC Deals and Value Since 2018* |
|||
|
Year |
Number of Deals |
Deals Value ($ mln) |
Change |
|
2018 |
56 |
59 |
-- |
|
2019 |
73 |
114 |
+93% |
|
2020 |
92 |
153 |
+34% |
|
2021 |
150 |
585 |
+282% |
|
2022 |
152 |
1020 |
+74% |
|
H1 2023 |
54 |
446 |
(27%)** |
*Updated data
**Change compared to H1 2022
Saudi Arabia secured the first place in the MENA region in value terms, commanding a 42% share of total funding, followed by Egypt at $305 million.
Meanwhile, the Kingdom accounted for 28% of the total deals in the region, taking the second place after the UAE.
|
VC Funding in MENA Countries in H1 2023 |
|||
|
Country |
Number of Deals |
Value ($ mln) |
Change |
|
Saudi Arabia |
54 |
446 |
(27%) |
|
Egypt |
23 |
305 |
-- |
|
UAE |
60 |
239 |
(66%) |
|
Bahrain |
-- |
44 |
(61%) |
|
Morocco |
15 |
13 |
+32% |
E-commerce was the most preferred sector, capturing $368 million of the Kingdom’s total VC funding, surging 245% YoY.
Accordingly, the sector constituted 82% of the total VC investment in the Kingdom, thanks to the Floward and Nana deals at $156 million and $133 million, respectively.
The table below indicates the top five sectors in terms of VC value during H1 2023:
|
Saudi Arabia’s Top Five Sectors in Terms of VC Value in H1 2023 |
||
|
Sector |
Value ($ mln) |
YoY Change |
|
E-Commerce |
368 |
+245% |
|
Programming |
14 |
(50%) |
|
Healthcare |
11 |
+1,008% |
|
FinTech |
10 |
(90%) |
|
Transport and Logistic Services |
10 |
(85%) |
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