Saudi Arabia has emerged as the premier destination for venture capital investment within the Middle East and North Africa (MENA) region, according to the latest figures released by a MENA-based venture data platform. The Kingdom has, for the first time, claimed the top spot in the amount of venture capital funding received in 2023.
This significant milestone underscores the transformative economic and financial developments taking place in Saudi Arabia, which are in alignment with the strategic objectives of Saudi Vision 2030. This ambitious plan aims to bolster the national economy and diversify its base.
Unprecedented Growth in Saudi Venture Capital
In 2023, the Kingdom secured a remarkable 52 percent of the total venture capital funding allocated within the MENA region. This represents a substantial increase from the 31 percent share it held the previous year. The inflow of funds into Saudi startups had surged by 33 percent compared to 2022.
The substantial growth in venture capital investments is a testament to the Saudi market’s allure, its competitive edge, and the overall strength of the Kingdom’s economy. As the largest economy in the MENA region, and a member of both the G20 and BRICS groups, Saudi Arabia continues to reinforce its standing on the global economic stage.
Dr. Nabeel Koshak, CEO and Board Member at Saudi Venture Capital (SVC), attributes the Kingdom’s ascendance in venture capital prominence to a range of government initiatives designed to invigorate the startup and venture capital ecosystems. These initiatives are part of Saudi Vision 2030’s programs and are complemented by advancements in legislative and regulatory frameworks, as well as the rise of active private sector investors and innovative entrepreneurs.
Dr. Koshak expressed pride in SVC’s strategic contributions, which helped the Kingdom leap from fourth place in 2018 to the regional leader in 2023. Remarkably, the funding for Saudi startups grew twenty-one-fold in 2023 when compared to 2018, the year SVC commenced operations.
SVC, established in 2018 as a subsidiary of the SME Bank under the National Development Fund, plays a pivotal role in fostering the venture capital environment. It focuses on promoting and sustaining financing for startups and small and medium-sized enterprises (SMEs) from their inception until the pre-IPO stage, through direct investments and partnerships.