RIYADH: Startups across the Middle East and North Africa region are gaining momentum, with funding rounds and expansions fueling innovation.

From artificial intelligence to fintech, health tech to media, these developments highlight the region’s growing ecosystem and investor confidence.

Aiming to boost the regional space, Saudi Venture Capital Co. has announced its investment in the $150-million Middle East Venture Fund IV, managed by Middle East Venture Partners. The fund targets technology startups with high growth potential across Saudi Arabia.

It aims to support startups from the seed stage through series A, series B, and eventual initial public offerings or exits, fostering the creation of regional tech champions. It also seeks to contribute to Saudi Arabia’s economic transformation by backing startups that impact key sectors.

“Our investment in the Middle East Venture Fund IV by MEVP supports SVC’s strategy of backing funds that invest in early-stage startups based in Saudi Arabia, aiming to foster their growth into later stages,” said Nabeel Koshak, CEO and board member at SVC.

Furthermore, SVC announced an investment for an undisclosed amount in Raed III LP, an early-stage venture capital fund managed by Raed Ventures.

The fund will target tech-enabled startups across Saudi Arabia and the wider region, primarily focusing on seed and series A stages, emphasizing fintech, enterprise software, and business-to-business Software-as-a-Services sector, predominantly in Saudi Arabia and UAE markets.

Risk intelligence platform Bureau closes $30m funding round to expand to Saudi Arabia

US-based risk intelligence and fraud detection startup Bureau completed a $30 million series B funding round to fuel its plans to expand in the Saudi market.

The round was led by Sorenson Capital with participation from PayPal Ventures and continued support from Commerce Ventures, GMO Venture Partners, Village Global, Quona Capital, and XYZ Ventures.

Bureau is a no-code identity decisioning platform that empowers businesses to prevent fraud, ensure compliance, and enhance user experiences.

The funding will accelerate Bureau’s product expansion into new use-cases, and geographical expansion to several new markets worldwide, including Saudi Arabia, to meet a significant surge in global demand.

OmniOps secures $8m to expand AI infrastructure solutions

Saudi-based OmniOps, an AI infrastructure technology provider, has raised $8 million in funding from GMS Capital Ventures.

The company, founded this year by Mohammed Al-Tassan, specializes in cloud and high-performance computing solutions for businesses of all sizes.

The investment will allow OmniOps to enhance research and development, scale operations, and advance AI infrastructure capabilities across Saudi Arabia. The company aims to deliver scalable, efficient solutions to meet the growing needs of regional industries.

This funding positions OmniOps to play a key role in Saudi Arabia’s digital transformation efforts, contributing to the development of advanced technological ecosystems.

Halo AI launches to connect brands with influencers

Saudi Arabia-based Halo AI has launched its services. Founded this year by Vito Strokov, Rami Saad, and Alex Gadalin, the AI-powered networking platform connects brands with nano- and micro-influencers who excel in specific niches.

The platform uses AI to streamline influencer marketing, offering brands access to highly targeted audiences with authentic engagement. Halo AI aims to support regional businesses in amplifying their reach through innovative marketing strategies.

Following its launch, Halo AI plans to expand its operations to the UAE and Kuwait, further solidifying its presence in the Gulf Cooperation Council market.

CredibleX raises $55m in seed round to support SMEs

UAE-based fintech startup CredibleX has secured $55 million in seed funding, comprising equity and debt.

Investors include Further Ventures for equity and debt providers such as Kilgour Williams Capital and Berkley Square Finance.

Founded in 2023 by Ahmad Malik, Anand Nagaraj, and Hassan Reda, CredibleX provides tailored financial solutions to support small and medium-sized enterprises in their daily operations. The startup aims to address the unique financial needs of SMEs in the region.

The new funds will accelerate CredibleX’s growth, expand its services, and strengthen its position as a leading fintech solution for SMEs in the Middle East.

Revibe secures $7 million Series A for refurbished electronics

UAE-based refurbished electronics marketplace Revibe has closed a $7 million series A funding round co-led by ISAI and Resonance, with participation from Kima Ventures and Edouard Mendy.

Founded in 2022 by Abdessamad Benzakour and Hamza Iraqui, Revibe specializes in providing high-quality, refurbished electronics through its B2C marketplace.

The startup has gained traction in emerging markets with its focus on affordability and sustainability and presence in Saudi Arabia, UAE, Kuwait, and South Africa.

The funds will be used to expand Revibe’s operations, enhance customer care, and invest in quality assurance as it continues to grow its market presence.

Klickl raises $25m series A to expand Web3 banking

UAE-based Web3 banking startup Klickl has raised $25 million in a Series A round led by Web3Port Foundation and Aptos Labs, with participation from Summer Ventures and others. The round values the company at $125 million.

Founded in 2017 by Michael Zhao, Klickl offers a Web3 open finance platform, enabling digital payments, banking, and crypto trading.

Its solutions are designed to facilitate seamless entry into the Web3 ecosystem for users and businesses alike.

The funding will allow Klickl to expand its Web3 banking services in MENA and emerging markets.

Quantix secures $500m asset-backed financing for lending

UAE-based fintech Quantix Technology Projects LLC, a subsidiary of Astra Tech, has raised $500 million in asset-backed securitization financing from Citi. Quantix will use the funding to support its CashNow consumer lending platform.

Founded in 2019, Astra Tech’s Ultra app integrates payments, cross-border transfers, and financing solutions, serving over 150 million users globally. Astra Tech aims to create a super app with capabilities such as digital payments and messaging.

This financing builds on Astra Tech’s previous funding success, including $490 million raised in 2022, enabling the acquisition of fintech PayBy and voice-calling app Botim.

BioSapien raises $5.5m to advance healthtech innovation

UAE-based healthtech BioSapien has raised $5.5 million in a pre-Series A funding round led by Global Ventures with participation from Dara Holdings. The funds will support clinical trials and product development.

Founded in 2018 by Khatija Ali, BioSapien offers MediChip, a 3D-printed drug delivery platform. The technology is attachable to tissues for localized treatment.

The new capital will enable patient enrollment for clinical trials in Abu Dhabi by the second quarter of 2025 and further investment in manufacturing capabilities and talent acquisition.

InvoiceQ raises $1.2 million pre-Series A to expand in GCC

Jordan-headquartered SaaS provider InvoiceQ has secured $1.2 million in pre-Series A funding from investors including Oasis 500, Orange VC, and Flat6Labs.

The company provides e-invoicing solutions and operates in Jordan and Saudi Arabia.

Co-founded in 2020 by Muhannad Tobal and others, InvoiceQ aims to streamline billing processes for enterprises while improving compliance with local regulations. The startup has been expanding its reach across the region.

The new funds will support geographic expansion into Oman, Egypt, and the UAE, as well as further development of its technology platform.

Anghami secures $55m with OSN Group taking majority stake

Lebanon-born music streaming app Anghami has raised $55 million, with $12 million coming as part of a convertible note program from OSN Group. OSN+ now holds a 55.45 percent majority stake in Anghami.

Founded in 2011 by Eddy Maroun and Elie Habib, Anghami merged with OSN+ earlier this year to create a larger media conglomerate. The company plans to use the funds to expand its content library.

The investment follows MBC Group’s acquisition of a 13.7 percent stake in Anghami earlier this year, as the streaming platform continues to strengthen its position in the media industry.

Unipal expands user base with pre-series A funding

Bahrain-born education tech startup Unipal has raised a pre-Series A investment round from Falak Angels Syndicate members.

The platform offers university students exclusive discounts on products and services.

Founded in 2020 by Ali Al-Alawi and Ali Al-Shaer, Unipal claims 160,000 users in Riyadh and 250 brand partnerships after just eight months of operation in the Saudi capital. The platform also boasts 60,000 users in Bahrain.

This investment follows a $500,000 round raised in July 2023, as Unipal continues its rapid regional growth and expansion.

ZSystems raises $1.5m to modernize traditional trade

Morocco-based marketplace ZSystems has secured $1.5 million in seed funding, led by MNF Ventures, Witamax, Cash Plus Ventures, and Kalys Ventures.

The platform empowers retailers by connecting them directly with consumers.

Founded in 2022 by Meriem Benabad and others, ZSystems focuses on revitalizing traditional trade, which accounts for 85 percent of the fast-moving consumer goods market. The company aims to drive competitiveness in underserved markets.

The funds will support ZSystems’ technology development, product expansion, and preparations for its next growth phase.

Oman Investment Authority invests in Elon Musk’s AI venture xAI

The Oman Investment Authority has acquired an undisclosed stake in xAI, Elon Musk’s artificial intelligence startup. This investment aligns with OIA’s strategy to diversify its international portfolio and support emerging technologies.

Founded in July 2023, xAI focuses on generative AI solutions, competing with leading players like OpenAI.

Earlier this month, xAI raised $6 billion in a series B round, attracting investments from Qatar Investment Authority, Kingdom Holding, and global firms like Andreessen Horowitz, bringing its valuation to $50 billion.

OIA’s latest investment in xAI complements its existing stake in SpaceX, Musk’s aerospace company.

This move reinforces the Gulf’s growing interest in cutting-edge technologies and the AI sector.

Iraq Venture Partners receives $2.7m for Iraqi entrepreneurs

Iraq Venture Partners has received $2.7 million from the Netherlands for the Orange Corners Innovation Fund. The funding will support the second phase of the initiative.

OCIF provides Iraqi entrepreneurs with technical expertise, financial backing, and access to extensive networks.

RIYADH: It is the caffeine, not the cost, of a morning coffee that is supposed to help you shake off any lingering sleepiness, but the world’s wake-up drink of choice is set to get more expensive in 2025.

December saw the cost of Arabica beans hit a record high on the global commodities market, while Robusta prices nearly doubled in 2024, reaching $5,694 a tonne by late November.

The price rises came as the global coffee industry battled a perfect storm of challenges, with climate change, supply chain disruptions, and global market forces all having an impact.

It is against this backdrop that Saudi Arabia is looking to expand its involvement in the sector, with the Middle East consuming more than its fair share of the product.

The International Coffee Organization estimated that 6.3 million 60-kg bags of coffee were drunk in the Middle East in the year 2022/23 – 3.6 percent of the world’s consumption.

“The region’s population is 196 million, or 2.6 percent of the world’s population. The region is consuming above its share,” the organization noted.

Dock No, statistical coordinator with the Secretariat of the ICO, highlighted that Saudi Arabia became the second country in the Middle East to become a member of the International Coffee Organization, when the country signed the International Coffee Agreement in February.

“The coffee sector in Saudi Arabia is growing fast and is an important part of our plans for the future and the change we wish to bring to our country as it contributes to diversifying the national economy,” No said.

The coffee organization highlighted the Saudi Coffee Co., a new venture launched by the Kingdom’s Public Investment Fund. With a $319 million investment over 10 years, the company aims to significantly expand Saudi Arabia’s coffee production from 300 tonnes annually to 2,500 tonnes.

This growth will be driven by a focus on sustainability throughout the coffee supply chain, from production to distribution and marketing.

“Varieties are a key tool for any agricultural system, and improved varieties will contribute to productive climate resilient coffee systems in Saudi Arabia, just like anywhere else,” CEO of World Coffee Research, Jennifer Vern Long emphasized in an interview with Arab News.

A global challenge

Andrew Hetzel, a coffee and high-value agriculture specialist, told Arab News that climate change, particularly prolonged droughts and unpredictable weather patterns, is directly affecting bean crops.

Brazil, which primarily produces arabica, and Vietnam, which is the largest robusta producer, are experiencing unseasonably dry weather, leading to lower yields and quality for the 2024/25 season.

The South American country is also the second-largest robusta producer, and has faced crop yield losses due to unusually dry weather in key growing regions. No also noted the country’s vulnerability to past extreme events like the frost of July 2021 that affected its crop​.

Hetzel said: “Brazil is the most sophisticated agribusiness producer of coffee as a nation, but even they do not irrigate all of their fields.”

Long emphasized the urgency of increasing coffee productivity globally to meet growing demand.

She said: “Improving productivity doesn’t just ensure the supply of coffee can keep up with demand, it also decreases carbon emissions from coffee farming.”

Long further explained that current investments in coffee agricultural R&D, which stand at only $115 million per year, are far too low for a sector with such global significance.

This surge in robusta prices is driven by a mix of climate-related challenges, geopolitical issues, and tightening supply chains.

In Vietnam production is expected to fall by 10 percent for the 2023/24 season, and the ICO’s No told Arab News that Vietnam’s local markets have reported domestic stocks running low.

Adding to these pressures is the disruption of key global trade routes. The Red Sea crisis has heavily impacted shipping, particularly for exports from Vietnam and Indonesia to Europe.

Roasters are now grappling with longer shipping times and higher costs due to rising insurance premiums and intense competition for container space.

As a result, robusta inventories are plummeting. By January 2024, certified robusta stocks had dropped to 0.48 million 60-kg bags, a sharp 15.4 percent decline on the previous month, according to a report by the ICO.

The ICO’s coordinator explained that coffee stocks in Europe have fallen by almost half since 2021, reducing from 15.5 million 60-kg bags to 8.7 million​.

Hetzel said some coffee prices are still being impacted from the COVID-19 pandemic, pointing to its effects on transport costs. “The cost of ocean freight from Indonesia to North America quadrupled as exporters fought for empty containers and ship bookings. Container shortages persist today,” he said.

No added that shipping disruptions through the Suez and Panama canals in the past 12 months have only exacerbated these logistical issues, forcing coffee exporters to take longer routes, which added to the cost.

Though green coffee bean exports saw a 12.6 percent increase in December 2023 compared to the previous year, this short-term boost is unlikely to ease the growing strain on supply.

Innovation needed to address coffee’s sustainability crisis

A recent report by World Coffee Research set out how the sector faces an innovation crisis that requires urgent attention, particularly in the wake of climate change.

The organization’s CEO explained that a significant increase in global investment — around $452 million per year — is required over the next decade to meet rising demand while mitigating climate-related yield losses.

The report emphasized that climate change is reducing coffee origin diversity and endangering smallholder production. This, combined with rising demand, could further destabilize the industry if not addressed.

Hetzel also underscored the vulnerability of smallholder farmers, particularly in developing regions. “The vast majority of coffee production is in fragile states that are highly susceptible to climate change,” he said, adding that many smallholder farmers are likely to be severely impacted by economic losses, leading to food insecurity, conflict, and out-migration.

How climate change will continue to drive up prices

Compounding these issues is the broader impact of climate change. The recent declaration of an El Nino weather event by the US Climate Prediction Center is expected to bring more drought to Vietnam and excessive rains to Brazil, further threatening coffee production.

Meanwhile, the war in Ukraine has driven up fertilizer prices and energy costs, adding to the financial burden on coffee growers and roasters alike. As Hetzel noted: “The war in Ukraine has increased energy costs downstream from the farm – transportation, roasting, and distribution costs have all risen.”

No also highlighted the broader effects of inflation and rising input costs on coffee producers, particularly those in the Americas dealing with seasonal labor shortages​.

According to the WCR report, increased global investment is essential to ensure the long-term viability of coffee producers. Long warned that without action, the industry will continue to experience supply constraints and rising prices.

For the global coffee industry, navigating this turbulent environment requires vigilance and greater investment in innovation. As supply constraints and climate events continue to unfold, traders, roasters, and consumers alike are bracing for what could be a prolonged period of high coffee prices.