Fashion Meets Finance: Inside Merak Capital’s US$80 Million Bet on Saudi Style

Saudi Arabia’s fashion industry is stepping into the spotlight—and Merak Capital wants to ensure that it has the institutional capital to scale.

In September, the Riyadh-headquartered investment firm launched its SAR300 million (US$80 million) Fashion Fund in partnership with the Kingdom’s Cultural Development Fund (CDF), marking its first foray into the fashion industry.

The private equity fund was unveiled at this year’s Cultural Investment Conference, staged by the KSA Ministry of Culture under the patronage of HRH Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister of Saudi Arabia, at the King Fahd Cultural Center in Riyadh. The partnership, which was facilitated with the patronage of HH Prince Badr bin Abdullah bin Farhan Al Saud, KSA Minister of Culture and Chairman of the CDF, will see Merak Capital manage the fund. With the CDF serving as anchor investor, the Fashion Fund will thus channel growth-stage capital into Saudi fashion, design, beauty, and related enablers across the value chain.

For Merak Capital, the new fund is as much about strategic evolution as it is about cultural investment. Since its founding in 2020 by Abdullah Altamami and Othman Alhokail, the firm has focused primarily on technology-driven sectors. Licensed by the Capital Market Authority in 2018, Merak today manages more than SAR3 billion ($800 million) across private equity, venture capital, and private credit. Its portfolio spans fintech, mobility, gaming, and software as a service (SaaS), while also running initiatives like Exel by Merak, a gaming accelerator launched in 2024 that held its inaugural demo day in August 2025.

In an interview with Inc. Arabia, Abdlaziz Alsaid, Vice President at Merak Capital, calls the Fashion Fund a natural next step for the Riyadh-headquartered multi-strategy asset management firm. “Over the years, we have backed leading companies in technology, gaming, fintech, mobility, and SaaS, always with a commitment to institutional discipline and a focus on supporting Vision 2030’s economic diversification mandate,” Alsaid says. “The Fashion Fund is a natural extension of this platform. It represents not only the application of our investment rigor to a new vertical, but also a commitment to a sector that directly aligns with the National Cultural Strategy. In partnership with the Ministry of Culture and the Cultural Development Fund, we see this initiative as a way to embed cultural identity into the architecture of Saudi Arabia’s economic growth.”

This anchoring of heritage is not incidental, though, with Vision 2030 putting culture and creativity at the heart of the Kingdom’s economic diversification. By extending its investment scope into fashion, Merak Capital is moving into a sector that, while expressive of Saudi tradition, also carries significant economic potential. Plus, with the Fashion Fund, it aims to introduce institutional capital to a historically underfunded yet high potential sector. Indeed, with the CDF catalyzing institutional capital, the Ministry of Culture’s Fashion Commission providing strategic guidance, and Merak Capital bringing governance and executional discipline, the partnership aims to take the Saudi fashion industry global.

“Saudi Arabia is uniquely positioned,” Alsaid points out. “We have one of the region’s richest cultural heritages and a new generation eager to express. While the fashion and beauty sector today contributes around 2.6 percent of gross domestic product (GDP), the National Cultural Strategy sets ambitious goals to significantly expand this contribution by 2030. The Fashion Fund is designed to operationalize that ambition by channeling institutional capital into fashion, beauty, and design—sectors that create jobs, scale entrepreneurs, and project Saudi identity globally.”

Abdlaziz Alsaid, Vice President at Merak Capital.

At the heart of this mission lies Merak Capital’s own ambition, backed by its belief in the Saudi fashion industry as an investable asset class. “Globally, very few private equity firms have committed capital to fashion as a dedicated asset class,” Alsaid explains. “Saudi Arabia, however, has unique advantages: a youthful and digitally native population, the policy backing of Vision 2030, and cultural authority in segments such as modest fashion. For Merak Capital, with a strong track record in technology and gaming, fashion represents the right next step—a chance to take a sector rich in heritage and creativity and give it institutional depth, scale, and global competitiveness.”

Alsaid also highlights the huge potential presented by the existing fashion market in the Kingdom, not to mention its rapid expansion, as key areas primed for young designers and entrepreneurs to claim a share of. “Fashion in Saudi Arabia is already a $34 billion sector, and it is projected to exceed $40 billion by 2029,” Alsaid says. “Within this market, beauty is expanding rapidly, e-commerce sales are set to nearly double, and Saudi consumers demonstrate exceptional loyalty to homegrown brands—yet, international players continue to dominate. That gap is our opportunity.”

But it’s not just the potential of the market—the past year has already offered tangible proof points that the opportunity is indeed ripe for the taking. In January this year, Nice One Beauty Digital Marketing Company, a Saudi makeup e-commerce platform, launched an initial public offering (IPO) on the Tadawul. Then, in September, Jamjoom Fashion Trading Co., a lifestyle fashion retailer, announced plans to sell a 30 percent stake of the company through an IPO on the Nomu parallel market.

These are just a few of the tangible points that Alsaidi suggests Merak Capital can build upon. “In recent months, several Saudi fashion and beauty companies have gone public with combined valuations approaching $2 billion,” he adds. “These events are not isolated successes; they are signals to global investors that Saudi brands are investable, scalable, and capable of generating substantial value. The Fashion Fund seeks to institutionalize this momentum by backing the next wave of companies, providing them with the governance, capital, and structures to expand across the region and beyond.”

So, where exactly will the money go? Alsaid points to industries such as beauty and fragrance as being “particularly compelling,” especially with Saudi Arabia already accounting for more than half of the GCC’s current demand. “E-commerce and omnichannel retail represent another area of rapid growth, with online sales expected to nearly double to $7.6 billion by 2029,” he adds. “Finally, modest fashion stands out as a $318 billion global market in which Saudi Arabia has cultural legitimacy but is underrepresented.”

However, the Fashion Fund is far from being just about representation, and Alsaid points out that, by coupling Saudi Arabia’s rich heritage with its own fashion-forward culture, the fund wants to create investable models in fashion, beauty, and design. “Importantly, we do not view profitability and cultural authenticity as competing objectives,” Alsaid explains. “On the contrary, they reinforce each other. A Saudi brand grounded in authenticity is more resilient domestically and more distinctive abroad. Our task is to provide these brands with the governance, capital, and scale required to thrive. In this way, we deliver financial returns to investors while also advancing national objectives. The Ministry of Culture, through its Fashion Commission, has been clear in its vision that cultural identity and economic impact go hand in hand. We fully share that view—authenticity strengthens profitability, and profitability sustains authenticity.”

And it is precisely those values that Alsaid believes will help entrepreneurs and designers to succeed in this landscape, with his advice to them emphasizing the importance of balancing between heritage and scale. “The first piece of advice is to leverage authenticity,” he says. “Saudi Arabia possesses one of the world’s richest cultural heritages, and authenticity is the strongest differentiator for local entrepreneurs. The Ministry of Culture, through the Fashion Commission, has already created platforms to showcase Saudi design, and designers should take full advantage of these opportunities.”

“The second is to embrace institutional discipline,” Alsaid continues. “Creativity is the spark, but what attracts capital and sustains businesses over time is strong governance, healthy margins, and scalable operations. Finally, the third is to think digital-first. Fashion today scales online, whether through omnichannel retail, digital marketing, or supply chain technology, and Saudi’s e-commerce fashion market is projected to nearly double in the coming years. Entrepreneurs who combine authenticity, discipline, and digital scale will not only succeed commercially, but will also contribute to Vision 2030’s objectives of job creation, entrepreneurship, and global competitiveness.”

Pictured in the lead image is a scene from the signing of the partnership between Merak Capital and Saudi Arabia’s Cultural Development Fund. All images courtesy Merak Capital.

This article first appeared in the October 2025 issue of Inc. Arabia magazine. To read the full issue online, click here.