Saudi Arabia Tops MENA in Venture Capital in H1: MAGNiTT
Saudi Arabia's share of the region's total funding increased to 54%.
Saudi Arabia has maintained its position as the top recipient of venture capital funding in the Middle East and North Africa (MENA) region, securing $412 million in the first half (H1) of 2024, according to MAGNiTT. This is the second consecutive year the kingdom has led the region, despite a 7% decline in year-on-year (YoY) funding.
Read More: VC Funding Dips In MENA, Reports MAGNiTT
A significant portion of this funding—32%—came from a $130 million mega-round involving Salla, the only such deal in the region this year. While the overall number of deals saw a 3% drop compared to the previous year, Saudi Arabia's transaction volume increased, making it the second-most active country in MENA. The kingdom accounted for 30% of total deals, up from 25% in the same period last year.
Saudi Arabia's share of the region's total funding increased from 38% in the H1 of 2023 to 54% during the first six months of 2024. Fintech leads in transaction volume, while e-commerce dominates in terms of funding, accounting for two of the top five deals in the country.
Investor interest remains strong, with 72 entities investing in Saudi startups, up from 62 last year. International investors now make up 28% of the total, a 17-percentage point increase from the previous year.
Merger and acquisition activity has been low, with only two transactions in 2024, compared to four in the same period in 2023. Most of these deals took place in the first quarter (Q1), with none in the second. Despite this, Saudi Arabia ranks second in exit activity in the MENA region, following the UAE.
Saudi Arabia, propelled by Vision 2030--the country's blueprint to diversify its economy away from oil--is driving ongoing government investments in large-scale infrastructure projects and enhancing infrastructure and services to meet the needs of its growing population.
The history of venture business in Saudi Arabia is a story of strategic evolution. Introduced in 2021, the Vision 2030 strategy aims to increase the private sector’s contribution to GDP to 65% and raise direct foreign investments to 5.7% of GDP by 2030. This ambitious strategy has laid the groundwork for a surge in investments across various sectors, from entertainment and tourism to futuristic “giga-projects” like NEOM–a $1.5 trillion infrastructure plan.