General Catalyst, a prominent venture capital firm from Silicon Valley, has ventured into Saudi Arabia by investing in Lean Technologies, a fintech startup. This marks General Catalyst’s initial investment in the region, contributing to Lean’s successful Series B funding round of $67.5 million.
General Catalyst manages $30 billion in assets and has previously invested in major tech companies like Snap, Stripe, and Airbnb. Other contributors to Lean’s funding round include Bain Capital Ventures, Stanley Druckenmiller’s Duquesne Family Office, and Arbor Ventures, raising Lean’s total funding above $100 million.
This investment signifies a growing confidence in Saudi Arabia’s economic potential, according to Lean Technologies CEO Hisham Al-Falih. The kingdom is actively pursuing Vision 2030, a strategy to diversify its economy beyond oil, creating new jobs and industries for its young population.
Al-Falih emphasized the crucial role of fintech in this transition, stating the need for further investment to enhance technology and services in the region. He noted the significant growth opportunities, despite the remarkable progress over recent years.
A McKinsey & Company report highlighted that fintech revenues in the Middle East and North Africa were $1.5 billion in 2022, with potential growth to $3.5 billion-$4.5 billion by 2025. Currently, fintech revenues represent less than 1% of banking revenues in the region, compared to 4-5% in more established markets like the U.S. and U.K.
Lean Technologies focuses on providing financial infrastructure for secure data-sharing between bank accounts and applications. Regulated by Abu Dhabi Global Markets, Lean enables direct account-to-account payments, bypassing intermediaries like payment processors.
The company collaborates with major local clients, including Emirati telecom firm e& and ride-hailing app Careem, processing over $2 billion in transactions. In Saudi Arabia, Lean’s data solutions, under the Saudi Central Bank’s regulatory sandbox, have impacted various sectors by verifying nearly 1 million bank accounts.
Since 2018, Saudi fintech startups have attracted over $1.84 billion in venture capital, with $791 million raised in 2023 alone—an increase of 231% from the previous year. The number of active fintech startups in Saudi Arabia has reached 216, employing over 6,500 people, with plans to establish 525 new companies by 2030.