The entrepreneurial sector in Saudi Arabia has emerged as a dominant force in the Middle East and North Africa (MENA), securing almost half of the venture funding in the region for the first quarter of the year. The Kingdom’s startups amassed a remarkable $224 million out of a total $429 million raised, as per a recent report from Wamda.
March witnessed a surge in startup activity, with MENA startups raising $254 million through 54 deals, marking a considerable increase from the previous year and a 186 percent surge from the $88.7 million raised in February. The investments in March, especially during the Riyadh-hosted LEAP24 event, propelled Saudi startups to prominence, including Salla’s significant pre-IPO round, which netted $130 million.
The Kingdom’s ventures outshined their counterparts in the UAE and Egypt, which raised $39 million and $7 million, respectively. The majority of funds were channeled to Software as a Service (SaaS) providers, with fintech and e-commerce sectors following closely. Despite the prevalence of seed and series A rounds, larger ticket sizes and later-stage investments were notably absent when compared to the previous year.
Investment preferences leaned towards Business-to-Business (B2B) models over Business-to-Consumer (B2C), with the former garnering $188 million, or 74 percent of March’s total funding. Conversely, B2C models attracted $48 million, or 19 percent. Although male-led startups dominated the investment landscape, female-led and mixed-gender teams also made a notable impact.
The month was also notable for several mergers and acquisitions, signaling a healthy and dynamic market. MBC Group’s investment in Anghami and Classera’s acquisition of Expert Solutions are among the significant deals reported. The investment landscape further received a boost with substantial funds announced at LEAP24, promising more growth and innovation in the regional entrepreneurial sector.
Among the new funds, Investcorp unveiled a $500 million fund aimed at supporting growth-stage ventures in Saudi Arabia, with Saudi Venture Capital contributing $35 million. Oasis Capital introduced a $100 million fund focusing on early-stage international startups, while Saudi Esports Federation, in collaboration with the Social Development Bank and the National Technology Development Program, is set to launch two funds under its Gaming and Esports Sector Financing Program.
Additionally, Saudi venture capital firms Merak Capital and Impact46 revealed funds amounting to $80 million and $40 million, respectively. Plug and Play Tech Center is also making its entrance with a $50 million fund that targets software and tech ventures in the Kingdom and the broader MENA region. Moreover, Takamol Ventures announced a $53 million venture capital fund at LEAP, aimed at early-stage tech companies to fuel innovation.
UAE’s fintech Fortis has also made headlines by closing its series A funding round with $20 million, led by Opportunity Venture. Fortis aims to redefine the retail tech and fintech environment in the MENA region by offering solutions that enable entrepreneurs to manage their business operations both offline and online more efficiently. The company plans to utilize the funds for enhancing customer-centric services, developing omnichannel capabilities, and expanding its regional footprint.
In Bahrain, Daleel raised an undisclosed investment from Hambro Perks Spring Studios. Daleel offers a platform that aids consumers in discovering and comparing various financial products, while simultaneously providing banks and financial institutions with insights to improve customer acquisition. The strategic investment will support Daleel’s expansion into Saudi Arabia and the UAE.