Quick Dive Into VC Activities in Saudi Arabia

Venture capital (VC) plays an important role in the success of startups in Africa. VC investments provide entrepreneurs with the capital they need to launch their businesses, purchase equipment, hire staff, and develop their products the investment of these organizations also provides entrepreneurs with access to a network of experienced professionals who can provide guidance and advice on how to build a successful business.

VC investments also bring visibility to a startup, helping to attract other investors, customers, and partners. Via VC investments entrepreneurs are also empowered with the confidence to take risks and pursue their dreams. By providing these resources, VC investments can be a powerful tool for helping entrepreneurs in Africa achieve success.

While VCs have been quite active within Africa, it will be important to note some countries have had very low VC activities. Within the continent in 2022, countries like Zimbabwe in the South, Rwanda in the East, Benin in the West, and Libya in MENA, had almost zero activity. While Egypt, Nigeria, Kenya, and South Africa were given the most attention within the continent.

In a pitchbook report, the MENA (Middle East and North Africa) region poses to be scaling in funding and VC activities, according to the report “Since the beginning of 2022, a total of $12.6 billion has been invested in the region across 874 deals, according to PitchBook data.” Although countries such as Israel and UAE have become choice locations for VC activities yet other nations such as Abu Dhabi and Saudi Arabia in MENA still experience significant investment actions respectively.

VC activities in Saudi Arabia

Venture capital firms in Saudi Arabia have become increasingly popular in recent years, as the country seeks to diversify its economy and foster innovation. These firms provide capital to startups and small businesses in exchange for equity, allowing them to grow and develop. Many of these firms are based in Riyadh, the capital of Saudi Arabia, and have been instrumental in helping to create a vibrant startup ecosystem. They have invested in various sectors, including technology, healthcare, and energy.

These firms have also been instrumental in helping to attract foreign investment to the country, as well as providing mentorship and guidance to entrepreneurs. In addition, many of these firms have been involved in the development of Saudi Vision 2030, which seeks to diversify the economy and create a knowledge-based society. With a purposeful existence in the nation, it is no surprise that the nation’s startups were reported to have received the most funding in the MENA region in 2022.

Active VCs

The are quite a number of active VCs across Saudi Arabia, and many have impacted startups within and outside the nation. The following are some of the most active VCs currently active within the nation.

1. Saudi Aramco Entrepreneurship Ventures:

Also known as Wa’ed Ventures is one of the most active VCs in the region with its latest investment on the 28th of December 2022. The VC led the investment in MANAFA Capital’s Series A funding. Although this is the VC’s latest, it is not its highest investment. In the middle of 2022, Saudi Aramco made a big investment in an international organization based in New York, U.S.A.

Saudi Aramco invested $50 Million into Wahed invest, a fintech startup. This has been the VC’s highest investment so far, as it also led the series B round. According to CrunchBase, the VC founded in 2013, has so far made 46 investments and has led 39 investments.

2. STV Investment Firm:

STV is considered to be one of the most immense independent VC firms in Saudi Arabia and in MENA at large. STV is an independent venture capital (VC) firm that is widely recognized for its immense size and scope. With investments in a wide range of industries, from technology to energy, STV has become one of the largest VC firms in the country. The firm has an impressive track record of successful investments, and its portfolio includes some of the most recognizable names in the region. STV has also become a leader in the industry, providing mentorship and guidance to aspiring entrepreneurs and helping to shape the future of the Saudi Arabian economy.  Founded in 2018, the VC focuses on Early stage and Last stage ventures. With the firm raising a total of $800 Million in 2017, its latest investment was on the 18th of January 2023.

The VC firm’s last investment is not its largest investment. In April 2022, the Firm made its largest investment into a foodtech startup. In the Foodics  Series B investment round, STV participated to raise $170 Million. So far STV has made 38 investments within and outside Saudi Arabia. In its profile are startups such as MANAFA Capital, Calo, TruKKer, and many more.

3. Raed Ventures:

Raed Ventures is a venture capital firm that specializes in investing in early-stage technology startups. Founded in 2018 by two experienced entrepreneurs, Raed Ventures provides early-stage companies with the capital and resources they need to succeed. The firm works with entrepreneurs to develop and scale their businesses, providing them with access to a network of industry experts and potential customers.

Raed Ventures has invested in a variety of companies across various industries, ranging from healthcare to consumer products, its last investment was on the 21st of November 2022, where it participated in Granta’s Seed round of $8 Million.

Raed participated in its largest round in December 2021. The VC participated in a $75 Million Series C round for Sary, a B2B e-commerce startup within the MENA region. Within 2018 and 2022, Raed Ventures has participated in 56 investments across MENA and has led a total of  23 investments.

While VC firms are pulling the strings within the ecosystem, the government is also actively supporting startups within. Saudi Arabia recently began investing in startups as part of its Vision 2030 plan. This plan was created to diversify the country’s economy away from its reliance on oil and gas. The Saudi government is investing in a variety of startups in the fields of healthcare, education, renewable energy, and technology. The goal of these investments is to create jobs, stimulate economic growth, and foster innovation.

The Saudi government has also established a number of venture capital funds to provide capital to startups. These funds provide capital to startups in the form of grants, loans, and equity investments. In addition, the Saudi government has created a number of initiatives to provide mentorship and support to entrepreneurs. These initiatives include accelerators, incubators, and mentorship programs. By investing in startups, Saudi Arabia is positioning itself to become a leader in the global startup ecosystem.