Saudi Arabia’s startup ecosystem is bucking the international growth trend
Fast growth in 2022 as everywhere else was contracting
The Saudi Arabian startup ecosystem has experienced rapid growth in recent years. With the combined value of the sector surpassing $11 billion in 2022, Saudi Arabia is a significant emerging player in global tech. With 1,031 startups and scaleups operating in the country, the future of technology in Saudi Arabia looks very promising.
In 2022, in a year when many other countries were experiencing a slowdown in the tech sector, Saudi-based startups raised $972 million in funding, which represents a 1.5x increase from the previous year.
When compared to other local and global ecosystems counterparts, Riyadh ranked amongst the top 10% of performers in the Rising Star Index as well as performing 2nd best globally in the Early Stage VC growth category amongst other Rising Star ecosystems.
Learn more about how Riyadh performed across other categories in Dealroom’s Ecobenchmarking report.
LEAP23 rakes in $9 billion to support tech and innovation
One factor contributing to the fast growth of the tech ecosystem in Saudi Arabia is the government’s strong support for innovation and technology. The LEAP23 conference, which took place in the country last week, announced investments of more than $9 billion to support future technology and startups.
The conference highlights the significant potential of the tech sector in Saudi Arabia, and the investments announced to demonstrate the confidence of investors in the future of the industry.
The Saudi tech ecosystem has also been benefiting from the Saudi Unicorns program, a nationwide program that provides state support to high-growth technology companies to reach unicorn status.
We’ve identified 35 companies so far that have benefited from this program which can be explored in the list below.
E-commerce and digitalization bring in high demand for tech
The fast growth of the tech ecosystem in Saudi Arabia has also been driven by the increasing demand for technology in the country. With the rise of e-commerce and digital transformation, businesses are looking for ways to leverage technology to improve their operations and better serve their customers.
In terms of top-funded industries, Fintech startups in Saudi Arabia have generated over a third of total VC investment since 2018 (36%) followed by Foodtech and Transportation related startups that make up a combined (43%) of VC investment in the country.
Biggest rounds in Saudi Arabia in 2022
According to Dealroom.co data, some of the biggest capital venture funding rounds in the region include three separate rounds exceeding the $100M sum: a $100M Series B round into Tamara (August 2022), a $100M Series C round into TruKKEr (September 2022) and the largest round to date, $170M Series C round into Foodics (April 2022)
These large funding rounds are indicative of the growth potential of the technology sector in the region and the increasing interest of investors in the region. In 2022, the Saudi tech ecosystem experienced a record-setting year in terms of VC investment, with Saudi startups raising just shy of $1B for the year.
The fast growth of the tech ecosystem in Saudi Arabia is a result of government support, the availability of talent, and the increasing demand for technology solutions. The announcements at the LEAP23 conference and the emergence of late-stage funding rounds indicate a serious emerging player in the global startup ecosystem.
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