Bahrain details fiscal plan as zero-deficit target pushed back to 2024
Updated 31 October 2021
Reuters
DUBAI: Bahrain on Sunday detailed a new economic growth and fiscal balance plan that pushes a zero-deficit target back by two years to 2024 from 2022 and increases value-added tax to 10 percent from 5 percent.
A government statement said the updated fiscal balance program also included reducing expenditure and project spend, streamlining distribution of cash subsidies to citizens and new government services revenue initiatives.
It said a strategic projects plan would catalyze over $30 billion of investments while a regulatory reform package aimed to support $2.5 billion of foreign direct investment by 2023.
Why tech startups should choose Riyadh as their MENA launchpad
Saudi Arabia offers startups access to a high-spending consumer base and a gateway to regional expansion
Updated 13 sec ago
Miguel Hadchity
RIYADH: Riyadh is becoming a leading destination for tech startups in the Middle East, fueled by Saudi Arabia’s Vision 2030 reforms, an advanced infrastructure, and robust government-backed incentives.
The Saudi information and communication technology market is projected to reach $54.90 billion in 2025 and $82.51 billion by 2030 at a compound annual growth rate of 8.49 percent, according to an analysis by Mordor Intelligence.
This growth highlights the Kingdom’s increasing prominence as a regional innovation hub.
At the heart of this transformation is Saudi Arabia’s Vision 2030 economic diversification plan, which has placed technology at the forefront of its strategy. Major initiatives, such as NEOM, a $500-billion smart city powered by artificial intelligence and renewable energy, and Riyadh Tech Valley, a dedicated hub for AI, the Internet of Things, and robotics startups, are driving this momentum.
Government programs such as the Saudi Unicorns Program and Tech Growth Financing provide critical support for scaling businesses, further cementing Riyadh’s appeal.
Emmanuel Durou, technology, media and telecommunications leader at Deloitte Middle East, highlighted three key operational factors behind Riyadh’s startup success. “First, Saudi Arabia’s advanced digital infrastructure has significantly accelerated startup growth,” he told Arab News in an interview.
The 2018 Bankruptcy Law emphasizes debt restructuring over liquidation, providing cash-strapped startups a mechanism to negotiate with creditors early before default.
Jasem Al-Anizy, partner in corporate finance at Addleshaw Goddard KSA
Government-led digital transformation initiatives have created a robust technological backbone, with 14 percent of Saudi broadband users enjoying speeds over 1G bits per second — far surpassing the 4 percent seen in markets like the UK. “This infrastructure supports rapid innovation and scaling up,” he added.
The second factor, according to Durou, is the Kingdom’s strategic focus on developing local talent pipelines. “As many as 86 percent of Saudi universities now provide undergraduate programs in AI, 56 percent offer master’s degrees, and doctoral opportunities stand at 9 percent,” he noted.
The Deloitte leader emphasized that institutions like King Abdullah University of Science and Technology play a pivotal role in supplying startups with skilled, technology-ready talent.
Lastly, Durou pointed to the Kingdom’s supportive business environment, which includes government incentives, substantial funding mechanisms like venture capital and private equity, and vibrant incubator ecosystems such as Garage 46 and Impact 43.
He also shed light on the Kingdom’s high consumer adoption rates of advanced technologies, particularly Gen AI.
Deloitte’s recent survey outlined Saudi Arabia’s high awareness of the technology at 76 percent, with usage frequencies of 20 percent daily and 32 percent weekly — significantly higher than the UK, he added.
When comparing Riyadh’s startup scaling environment to Dubai’s, Durou observed distinct strengths in each.
“In Riyadh, government-driven initiatives such as Saudi Vision 2030 have significantly streamlined regulatory processes, enabling startups to reduce their time-to-market,” he said, adding that “extensive support from local incubators, accelerators, and dedicated funding programs serve to further accelerate product development and launch timelines.”
Durou noted that customer acquisition costs in Riyadh are comparatively lower, driven by the ongoing surge in digital adoption among consumers and supported by targeted government-backed marketing initiatives.
The fintech sector, in particular, benefits from robust governmental support, which helps meet rising local demand. Meanwhile, e-commerce growth is further propelled by high Internet penetration and shifts in consumer behavior.
“Dubai offers rapid market entry facilitated by the globally recognized Dubai International Financial Centre and a mature, efficient regulatory environment. Although high market competition can drive up customer acquisition costs in Dubai, it’s balanced by an expansive and diverse customer base,” he explained.
Durou highlighted that the DIFC ecosystem offers fintech startups access to government incentives, which greatly enhance their growth prospects. He also emphasized that Dubai’s strategic geographic position as a global trade hub, along with its advanced logistics and warehousing capabilities, significantly accelerates the expansion of e-commerce.
Jasem Al-Anizy, partner in corporate finance at Addleshaw Goddard KSA, shed light on the legal structures that are proving effective in the Kingdom.
“Saudi startups have historically preferred an offshore ring-fencing of intellectual property assets by holding and protecting intellectual property interests in a standalone sister company based in an offshore jurisdiction,” he explained to Arab News.
“This has helped startups in scaling globally and simplifies exit strategies,” Al-Anizy said.
Government-driven initiatives have significantly streamlined regulatory processes, enabling startups to reduce their time-to-market.
Emmanuel Durou, technology, media and telecommunications leader at Deloitte Middle East
However, with stronger business and intellectual property laws, there is increasing trust in local company structures like the Simplified Closed Joint Stock Co.
Al-Anizy also highlighted the advantages of Riyadh’s bankruptcy laws for tech startups facing liquidity challenges. The 2018 Bankruptcy Law emphasizes debt restructuring over liquidation, providing cash-strapped startups a mechanism to negotiate with creditors early before default, he said.
The law was introduced to provide guidance on the adoption and implementation of bankruptcy proceedings. Despite its name, the primary objective of the Bankruptcy Law is not liquidation but rather the rescue of insolvent businesses through reorganization and financial restructuring.
Al-Anizy said that this sophisticated regime demonstrated in recent large-scale restructurings, has garnered recognition from founders and investors alike. On the dispute side, mediation and the Saudi Center for Commercial Arbitration are becoming preferred avenues for resolution.
For foreign founders setting up their MENA Headquarters in Riyadh, Al-Anizy stressed the importance of clear contractual considerations. “Founders having an unclear picture of their share cap table, equity vesting, or the conversion of any issued SAFE/KISS notes is an easily avoidable way to lose investor confidence,” he warned.
A Simple Agreement for Future Equity is an investment instrument that allows startups to raise capital without immediately determining a valuation, converting it into equity upon a future-priced round or liquidity event. Similarly, a Keep It Simple Security operates as either a convertible note or a SAFE-like agreement, offering standardized terms for early-stage funding.
Both are designed to streamline early investments while deferring valuation discussions, but founders must track their terms, such as discount rates, valuation caps, and conversion triggers, to maintain transparency with investors.
Al-Anizy also advised explicit contractual clauses to ensure intellectual property rights are clearly vested in the company, safeguarding the business and maintaining investor trust.
Riyadh has become a magnet for multinational corporations, with around 600 foreign companies establishing their regional headquarters in the city since the launch of the Saudi Program for Attracting Regional Headquarters in 2021.
Spearheaded by the Ministry of Investment and the Royal Commission for Riyadh City, this initiative is a cornerstone of Vision 2030’s goal to position Saudi Arabia as a global business hub.
The program offers compelling incentives, including a 30-year tax relief package with 0 percent corporate and withholding taxes, streamlined setup processes, and access to world-class infrastructure.
Riyadh’s strategic location at the crossroads of Asia, Africa, and Europe, combined with its skilled workforce and economic stability, has made it the top choice for multinationals looking to expand in the region.
Riyadh’s appeal is further bolstered by business-friendly policies, including 100 percent foreign ownership in key sectors, tax incentives, and streamlined licensing through the Saudi Business Center. Startups also benefit from partnerships with major corporations like Aramco and STC, as well as accelerator programs from Flat6Labs and 500 Global.
With a population of 36 million and the largest economy in the Middle East and North Africa, Saudi Arabia offers startups access to a high-spending consumer base and a gateway to regional expansion. The Kingdom’s advancements in technology were recognized in the 2024 Global Innovation Index, where it secured the 47th spot among 132 countries.
Events such as the LEAP Tech Conference and Riyadh Season continue to draw global investors, while local success stories — from Tamara, Saudi Arabia’s first fintech unicorn delivering payments and banking, to Salla, an e-commerce platform empowering SMEs with digital storefronts — demonstrate Riyadh’s potential as a launchpad for high-growth companies.
Funding flows into frontier tech as startups race to scale
Darwinz AI will use the new capital to expand its Riyadh-based team
Updated 15 min 3 sec ago
Nour El-Shaeri
RIYADH: Startups across the Middle East and Africa are attracting fresh capital as investors double down on AI, fintech, proptech, and agri-tech solutions tailored to local and regional challenges.
Saudi Arabia-based Darwinz AI, known as TheDar.AI, has raised $325,000 in seed funding to accelerate development of its AI-powered productivity platform for communication professionals.
The round was led by Flat6Labs and Glint Ventures, marking a milestone for the startup as it deepens its presence in the Kingdom.
Originally founded in Egypt in 2021 by Emad El-Azhary and Mohy Aboualam, TheDar.AI has evolved into a regional AI player with operations now headquartered in Riyadh.
The company’s flagship platform, dima, functions as an AI copilot tailored for public relations professionals, marketers, and brand managers—offering automation features that aim to improve content workflows and campaign management.
According to the company, the new capital will be used to expand the Riyadh-based team, accelerate product development cycles, and prepare for a global launch.
Founded in 2024 by Anis Rahal, XFOLIO offers a cloud-based platform that integrates portfolio management with treasury automation. (Supplied)
“This round marks a new chapter,” said co-founder Aboualam. “We’re proud to call TheDar.AI a Saudi company with Egyptian roots, and we are excited to scale globally through the thriving ecosystem here. Stay tuned — the best is yet to come.”
The investment reflects growing interest in generative AI applications in the Gulf region, especially in sectors like marketing and enterprise communications, where automation and digital transformation are accelerating.
XFOLIO raises $2m to modernise treasury and wealth management
French-Lebenese Fintech platform XFOLIO has raised $2 million in seed funding to enhance its enterprise-focused digital infrastructure for financial institutions and wealth managers.
The investment round was led by Middle East Venture Partners, and is aimed at expanding the startup’s product capabilities and market reach. Founded in 2024 by Anis Rahal, XFOLIO offers a cloud-based platform that integrates portfolio management with treasury automation.
It is designed to help financial institutions, family offices, and mid-sized wealth managers consolidate both bankable and non-bankable assets—providing a unified view of financial holdings and automating key back-office operations.
The capital will be used to launch AI-powered recommendation tools and enable cross-bank trading, two features the company believes will enhance decision-making efficiency and improve market access for underserved clients.
Prop-AI raises $1.5m to digitise real estate decisions
UAE-based proptech startup Prop-AI has secured $1.5 million in pre-seed funding to expand its AI-driven real estate intelligence platform.
The round was led by Plus VC, with contributions from Joa Capital, Select Ventures, Oraseya Capital, Plug & Play, and angel investors from Saudi Arabia and Bahrain.
Founded in 2023 by Ranime El-Skaff and Christian Kunz, Prop-AI uses artificial intelligence and machine learning to automate real estate search, valuation, and investment decision-making.
We’re proud to call TheDar.AI a Saudi company with Egyptian roots, and we are excited to scale globally through the thriving ecosystem here.
Mohy Aboualam Darwinz, AI co-founder & CEO
The platform caters to property buyers, investors, and real estate professionals seeking data-driven insights and automated analytics.
The funding will be used to integrate more regional data sets, enhance AI infrastructure, and launch new enterprise tools.
The startup also plans to scale across the MENA region and into European markets.
“Our mission is to build the ‘Bloomberg of Real Estate’,” said Ranime El-Skaff, CEO of Prop-AI.
DisrupTech backs Winich Farms in Sub-Saharan Africa debut
Cairo-based DisrupTech Ventures has made its first Sub-Saharan Africa investment by backing Winich Farms, a Nigerian agri-fintech startup, in its ongoing pre-series A round.
The move signals the fund’s broader interest in scalable fintech solutions addressing critical needs in Africa’s agriculture economy.
Winich Farms operates in 29 of Nigeria’s 36 states and has built a platform focused on improving financial inclusion and market access for over 180,000 smallholder farmers.
The company connects producers directly with buyers and provides access to financing tools that reduce post-harvest losses and price volatility.
The startup plans to expand its operations beyond Nigeria and explore export opportunities into the MENA region, positioning itself as a cross-continental player in agri-fintech innovation.
“Our investment in Winich reflects our conviction in the potential of Nigeria’s agri-fintech sector and the scalability of its model,” said Mohamed Okasha, managing partner at DisrupTech Ventures.
“Winich is not only solving real problems for smallholder farmers but doing so with a scalable model. Agriculture is also core to Egypt’s economy, and we look forward to sharing insights and best practices between both markets as Winich grows across the continent.”
Octane raises $5.2m to streamline fleet payments
Egyptian fintech Octane has raised $5.2 million in a funding round led by Shorooq Partners, Algebra Ventures, and SC Holding.
The Cairo-based company was co-founded in 2022 by Amr Gamal and Ziad Eladawy, and offers a closed-loop wallet system that consolidates fleet-related expenses including fuel, maintenance, and petty cash.
Octane targets fleet operators and logistics companies that currently rely on fragmented financial systems.
Its platform provides tools for financial control, analytics, and cost optimisation.
“At Octane, we’re focused on giving fleets the rails they need to manage day-to-day payments with precision,” said Amr Gamal, Co-Founder and CEO of Octane.
“This funding lets us broaden our acceptance network, expand AI-powered fraud detection and route optimisation features, and stay ahead of the shift toward cleaner, more efficient mobility, without adding complexity for our customers.”
The startup plans to use the new funds to grow its merchant network, expand regionally, and integrate more AI capabilities into its transaction processing and route planning tools.
OCTA secures $20m credit line to support SME automation
UAE-based fintech OCTA has secured a $20 million credit facility from Sukna Fund for Direct Financing, reinforcing its mission to embed financial services into the daily operations of small and medium-sized enterprises.
The new facility follows OCTA’s $2.25 million pre-seed round closed in October 2024, co-led by Quona Capital and Sadu Capital.
Founded in 2024 by Jon Santillan, Andrey Korchak, and Nupur Mittal, OCTA automates the contract-to-cash process for SMEs—covering invoicing, collections, payments, and now embedded credit.
The company claims to offer a unified platform that helps SMEs overcome working capital constraints and cash flow inefficiencies.
“Most SMEs don’t fail because they lack revenue — they fail because their cash is locked up,” said Jon Santillan, co-founder and CEO of OCTA.
“Our partnership with Sukna Fund allows us to bring financing directly into the heart of daily operations, where businesses need it most.”
The funds will help OCTA scale across Saudi Arabia and other Gulf markets as it targets the underserved mid-market SME segment.
SaturnX raises $3m to expand stablecoin-based remittances
Dubai-based SaturnX has closed a $3 million seed round led by White Star Capital, with additional support from institutional backers.
Founded in 2024 by Mirnas Brescic, SaturnX provides an API-based infrastructure layer for stablecoin payments, designed specifically for business-to-business financial service providers.
The new capital will support expansion into Southeast Asia, with initial focus on high-volume remittance corridors such as the Philippines, Bangladesh, and Pakistan.
SaturnX also plans to enhance compliance and enterprise features on its API platform.
“Our vision is to connect the worlds of decentralised and traditional finance with infrastructure that brings the benefits of stablecoins to everyday financial use cases,” said Mirnas Brescic, CEO and Founder of SaturnX.
“Despite considerable progress, cross-border payments are still expensive and slow. By offering a faster, cheaper, and programmable alternative, we’re helping financial partners unlock better ways to move money.”
Pakistan signs $4.5 billion loans with local banks to ease power sector debt
The government, which owns much of the power infrastructure, is grappling with ballooning ‘circular debt’
The liquidity crunch has disrupted supply, discouraged investment and added to fiscal pressure on Islamabad
Updated 21 June 2025
Reuters
KARACHI: Pakistan has signed term sheets with 18 commercial banks for a 1.275 trillion Pakistani rupee ($4.50 billion) Islamic finance facility to help pay down mounting debt in its power sector, government officials said on Friday.
The government, which owns or controls much of the power infrastructure, is grappling with ballooning “circular debt”, unpaid bills and subsidies, that has choked the sector and weighed on the economy.
The liquidity crunch has disrupted supply, discouraged investment and added to fiscal pressure, making it a key focus under Pakistan’s $7 billion IMF program.
Finding funds to plug the gap has been a persistent challenge, with limited fiscal space and high-cost legacy debt making resolution efforts more difficult.
“Eighteen commercial banks will provide the loans through Islamic financing,” Khurram Schehzad, adviser to the finance minister, told Reuters.
The facility, structured under Islamic principles, is secured at a concessional rate of 3-month KIBOR, the benchmark rate banks use to price loans, minus 0.9 percent, a formula agreed on by the IMF.
“It will be repaid in 24 quarterly instalments over six years,” and will not add to public debt, Power Minister Awais Leghari said.
Existing liabilities carry higher costs, including late payment surcharges on Independent Power Producers of up to KIBOR plus 4.5 percent, and older loans ranging slightly above benchmark rates.
Meezan Bank, HBL, National Bank of Pakistan and UBL were among the banks participating in the deal.
The government expects to allocate 323 billion rupees annually to repay the loan, capped at 1.938 trillion rupees over six years.
The agreement also aligns with Pakistan’s target of eliminating interest-based banking by 2028, with Islamic finance now comprising about a quarter of total banking assets.
Saudi gold demand defies price surge amid cultural, digital shift
Updated 20 June 2025
Nadin Hassan
RIYADH: Gold prices may be at record highs, but that has not stopped Saudi consumers from buying. In the first quarter of 2025, demand for gold jewelry in the Kingdom jumped 35 percent year on year, even as global demand fell 21 percent, according to the World Gold Council.
That surge comes amid a global price rally, with gold breaching $3,500 per ounce in April, up from around $2,370 a year earlier — driven by geopolitical tensions, inflation fears, and aggressive central bank buying.
“This rapid increase in the price of the bullion can be attributed to one main reason – central bank buying,” Vijay Valecha, chief investment officer at Century Financial, told Arab News.
Yet despite the soaring cost, Saudi Arabia’s deep-rooted gold culture continues to shine, with consumers purchasing 11.5 tonnes of gold jewelry in the first quarter, up from 8.5 tonnes a year earlier.
“This feat occurred despite the 34 percent rise in prices in early 2025, demonstrating Saudi consumers’ strong demand and purchasing power,” said Valecha.
Vijay Valecha, chief investment officer at Century Financial. Supplied
Gold in the Kingdom is more than a financial asset — it represents tradition, adornment, and intergenerational wealth. From bullion bars to minimalist 18-carat jewelry, Saudi buyers are proving resilient even as other regional markets, such as the UAE and Kuwait, witness sharp declines in demand.
Hamza Dweik, head of trading for the MENA region at Saxo Bank, emphasized gold’s cultural role, telling Arab News: “Gold is deeply embedded in Saudi traditions, especially during weddings and festive occasions. This cultural attachment ensures a steady baseline of demand, even during price surges.”
Global factors
Valecha explained that following the conflict in Ukraine, many countries grew concerned about holding excessive reserves in US dollars, prompting nations such as China and Russia to increase their gold purchases.
“China has spearheaded record levels of global central bank purchases of gold. Hence, looking ahead, the trend of gold buying by central banks is expected to continue,” he added.
Another push came in May, when Moody’s downgraded the US credit rating from Aaa to Aa1, citing “a sustained increase in government debt (exceeding $36 trillion), rising interest payment ratios, and persistent fiscal deficits exacerbated by political dysfunction and policy uncertainty.”
Valecha added that this marked the first time the US lost its top-tier rating from all three major agencies.
Cultural drivers
In different parts of the Kingdom, people buy gold for different reasons. In the north, around 70 percent of buyers view gold primarily as an investment, while in the south, it is more closely tied to tradition and adornment. Gold bars and coins are also gaining popularity, with people stocking their safes with bars of varying weights and purity.
In the first quarter, gold demand in Saudi Arabia grew 15 percent year on year to 4.4 tonnes. Jewelry preferences are also shifting — from favoring diamonds to a growing obsession with gold.
More young buyers are opting for 18-carat pieces due to their affordability, modern style, and lighter tone, as they appear less yellow than 21- and 24-carat gold.
“They also have a less flashy design/colour, which makes them better for everyday use,” Valecha explained.
Hamza Dweik, head of trading for the MENA region at Saxo Bank. Supplied
Digital platforms and online gold purchases are also on the rise, blending tradition with technology — from buying fractional gold and using savings apps to investing through exchange-traded funds.
“Younger generations are blending tradition with technology — embracing digital gold platforms, fractional ownership, and ETFs, while still participating in cultural gifting. This is reshaping how gold is marketed and consumed,” Dweik added.
While countries including the UAE and Kuwait have seen gold demand decline, Saudi Arabia is moving in the opposite direction, with domestic consumers leading the surge, supported by strong spending habits.
Consumer spending in the Kingdom hit an all-time high in March, rising 17 percent to SR148 billion ($39.44 billion) — the highest monthly increase since May 2021 — before easing to SR113.9 billion in April.
The shift in consumer behavior is evident across the Kingdom. Jewelers in Riyadh spoken to by Arab News reported a growing interest in custom pieces, lighter-weight ornaments, and contemporary designs that suit both festive occasions and everyday wear.
The 18-carat trend, once seen as a budget-friendly option, has become a fashion choice, according to the jewelers. More women are purchasing gold for themselves, breaking away from the traditional gift-only narrative.
While physical stores remain popular for high-value purchases, particularly during wedding seasons and religious festivals, digital platforms are making inroads. Online retailers like L’azurde are adapting to this demand by offering buy-now-pay-later plans, making gold more accessible to a wider audience. Popular jewelry items include 21-carat necklaces and rings, while younger buyers favor 18-carat pieces for daily wear.
Market outlook
Looking ahead, both Valecha and Dweik expect prices to remain strong. Valecha predicts gold could reach $3,700 per ounce by year-end, though he cautions short-term investors. “Buyers should assess their investment horizon — long-term holders may still find value, while short-term buyers should be mindful of volatility,” he said.
“Sustained central bank purchases, heightened investor appetite in a period of uncertainty in the economic landscape, and projected interest rate cuts drive this bullish projection. The projected price under a recession scenario is as high as $3,880 per ounce,” Valecha added.
Dweik agreed, and said: “While structural drivers support continued growth, potential corrections could occur if inflation eases or interest rates rise.”
Saudi Arabia may also be poised to grow into a regional gold trading hub. Valecha believes that with the right infrastructure and regulatory framework, the Kingdom could play a larger role in the global market. “To elevate its status, a modern, transparent gold market ecosystem and enhanced refining capabilities would be essential,” he said.
With deep-rooted traditions, rising investment activity, and a modernized retail environment, Saudi Arabia’s gold market is not only resilient — it is evolving. In a time of global uncertainty, gold continues to shine across the Kingdom.
Where the money is flowing: AI, agritech, and fintech set to lead Saudi venture capital ecosystem
Updated 20 June 2025
Nour El-Shaeri
RIYADH: Saudi Arabia’s venture capital ecosystem is entering a pivotal phase of growth, fueled by a surge in domestic and international investment targeting sectors aligned with the Kingdom’s Vision 2030.
Agriculture tech, fintech, artificial intelligence, and clean energy are emerging as key pillars of this transformation, driven by regulatory reforms, demographic shifts, and a rising global investor appetite.
The country’s ambition to become a regional innovation hub is drawing sustained capital inflows, placing it at the center of the broader emerging venture market investment narrative.
Domestic ambition shapes sectoral disposition
Said Murad, senior partner at investment firm Global Ventures, cited Saudi Arabia’s high food import dependency and its ambitions to boost domestic production as key in drawing funds to the Kingdom.
“Agritech and climate-related technologies will certainly contribute to the next phase of investment growth,” he told Arab News in an interview.
Complementing this trend, Philip Bahoshy, CEO of MAGNiTT, pointed to fintech, AI, clean energy, logistics, and advanced manufacturing as areas expected to dominate future funding.
“These sectors align with Vision 2030’s push for economic diversification and digital transformation,” he told Arab News, with health tech and deep tech also gaining traction due to increasing research and development support and regulatory tailwinds.
Philip Bahoshy, CEO of MAGNiTT. Supplied
AI, in particular, is emerging as a dominant investment theme in the region. According to MAGNiTT’s 2025 predictions, the sector is set to double its share of venture capital funding in emerging venture markets this year, following a surge of high-profile deals in 2024.
“AI was the main driver of investment activity both in the private and public markets in the US and other mature markets in 2024,” the platform noted, referencing data from PitchBook.
In the first nine months of 2024, AI accounted for 41.3 percent of US venture capital funding. In Saudi Arabia, this momentum is reflected in deals such as Intelmatix’s $20 million Series A round and Amazon Web Services’s planned data center investment, both signaling the Kingdom’s rising stake in the global AI landscape.
MAGNiTT also cited broader geopolitical and commercial developments in the AI space, including chip export agreements, as indicators of the sector’s rising importance in the region.
“Based on our proprietary data, we expect AI funding to double in 2025 due to increased investor attention to innovative AI startups,” the company stated.
Beyond AI, Global Ventures’ investment in Iyris, an agritech company spun out of King Abdullah University of Science and Technology, illustrates the potential of local innovation to address long-standing structural challenges.
“Iyris is positively disrupting agricultural practices for mid-to-low-tech farmers, particularly in hot climates,” Murad said.
The startup launched the National Food Production Initiative in 2023, partnering with SABIC and Red Sea Global to establish a sustainable farming project in Bada, Saudi Arabia, aimed at regenerating unproductive land and enhancing food security.
Fintech remains another strong area of interest, supported by a digitally connected population and a push toward financial inclusion.
“With 98 percent internet penetration and 97 percent smartphone adoption among the 18-to-78-year age group, the Kingdom has one of the world’s most digitally enabled populations,” Murad said.
He views this as a key enabler for innovation in financial services, both consumer-facing and enterprise-driven.
Focused sectors, broad appeal
Capital inflows into Saudi Arabia are being driven not only by sector performance but also by global institutional interest in the region.
According to MAGNiTT, firms including BlackRock, Golden Gate Ventures, and Polen Capital have already established offices or acquired licenses in the Kingdom, the UAE, or Qatar.
Others, including General Catalyst and the BRICS Investment Fund, have made their investment debuts or launched dedicated MENA-focused funds.
“In 2025, we expect even more investors and asset managers to set up offices in the EVM regions, particularly Saudi Arabia and the UAE,” MAGNiTT stated, attributing this to the region’s “friendly business-enabling environment.”
Said Murad, senior partner at investment firm Global Ventures. Supplied
Deal flow in the Kingdom has grown across all funding stages. “Saudi Arabia saw a surge in pre-seed and seed-stage funding,” said Murad, noting that demand for later-stage capital is increasing as startups validate their models and seek international expansion.
Supporting this trajectory is a growing exit pipeline. In 2024, Saudi Arabia completed 42 initial public offerings, ranking seventh globally in capital raised.
“This growing pipeline of exits signals the increasing maturity of the country’s capital markets and reinforces the long-term viability of its venture ecosystem,” Murad added.
As international capital intensifies, local venture firms are adapting their strategies to remain competitive.
“Regional players active in the market will understand local nuances, ultimately providing a competitive advantage,” Murad said.
He emphasized that investors offering operational support and showcasing portfolio success stories will be best positioned to attract international limited partners.
The Kingdom’s regulatory environment is increasingly seen as a strength in the region’s venture capital narrative.
“Government initiatives and the regulatory framework are geared to venture capital firms investing in startups in a secure, forward-thinking, and robust environment,” Murad said.
Still, he cautioned that strong business fundamentals remain essential. “The need for entrepreneurs to have strong, sustainable business models with good unit economics is as necessary as ever,” said the Global Ventures partner.
Despite global uncertainties, Saudi entrepreneurs may be better equipped than most to navigate a challenging macroeconomic environment.
“At Global Ventures, we refer to the ‘adversity advantage’— a natural upside for regional entrepreneurs who are used to working with, and around, resource scarcity,” Murad said.
“This has empowered them, by design, to build businesses more resilient and adaptable to challenges,” he added.
