Riyadh, Venture Capital Report in the Kingdom of Saudi Arabia showed that 2021 witnessed implementing investments with a record value of SAR 2.055 billion in Saudi startups, recording a growth rate of 270% compared with 2020. The number of deals in Saudi startups grew by over 54% compared with 2020 to a total of 139 deals.
The report – issued today by MAGNiTT Platform, which is specialized in venture capital in startups, and under the patronage of the Saudi Venture Capital Company (SVC) that was established by the Small and Medium Enterprises General Authority (Monshaat) – showed that despite the fact that 2020 was a positive year for venture capital in the Kingdom of Saudi Arabia, 2021 witnessed bigger flows, where the value of venture capital and the number of deals in the year registered a new record.
The Kingdom of Saudi Arabia advanced from the third to the second rank among Middle East and North African countries in terms of the total value of venture capital, accounting for 21% of the total investment value in the region up from its share of 15% in 2020. The growth rate registered between 2020 and 2021 in terms of the value of venture capital in the Kingdom of Saudi Arabia was the highest among the first three countries in the region.
The number of investors who invested in Saudi startups increased to a new record to 76 investors, marking an increase rate of 52% compared with 2020. The financial technologies sector topped the scene in terms of the number of deals, while the e-commerce accounted for the biggest share of the value of venture capital in the Kingdom of Saudi Arabia in 2021.
Governor of Monshaat and Chairman of the Board of Directors of SVC Eng. Saleh Al-Rasheed stressed that the continuous uptrend in investing in Saudi startups each year highlights the robustness of this sector and its attractiveness to investors, at a time Monshaat and its partners work relentlessly to provide qualitative services, programs and initiatives that can contribute to stimulating the financing environment of startups and small and medium enterprises and bridging the current financing gaps.
Al-Rasheed noted that establishing SVC in 2018 has directly contributed to developing the venture capital system through stimulating investment in investment funds and investment in participation with groups of angel investors.
For his part, SVC CEO Nabeel Koshak said that the Kingdom of Saudi Arabia is witnessing an unprecedented growth in the volume and quality of startup deals, as a result of the emergence of several innovative entrepreneurs, venture capital funds and groups of angel investors, in addition to enjoying an advanced organizational and legislative environment supported by effective government programs.
He added that the company, earlier in the year, launched the “Accelerator and Startup Studio Funds” Program under the “investment in Funds” Program in a bid to enhance the construction and generate high-growth startups, and also launched the Venture Debt Funds, as part of the company’s continuous endeavors to bridge financing gaps in the venture capital system in startups.
SVC is a government company that was established in 2018 by Monshaat as part of the Financial Sector Development Program (FSDP) to stimulate venture investments by investing SAR 2.8 Billion ($750 Million).
Source: Saudi Press Agency
