Saudi startup boom creates ‘entrepreneurial bridge’ with Egypt

The Saudi market, characterized by its large size and high consumer purchasing power, presents lucrative opportunities for tech startups. Shutterstock
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Updated 10 November 2024
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Saudi startup boom creates ‘entrepreneurial bridge’ with Egypt

RIYADH: Saudi Arabia’s thriving startup ecosystem has created an entrepreneurial bridge with neighboring countries, attracting a growing number of founders to the nation.

This trend is particularly pronounced among Egyptian tech entrepreneurs, drawn by market potential, government initiatives, and abundant funding opportunities.

The Saudi market, characterized by its large size and high consumer purchasing power, presents lucrative opportunities for tech startups.

Additionally, Vision 2030 and various entrepreneurship support programs have fostered a stimulating environment for innovation.

“Saudi Arabia’s government initiatives and funding opportunities are major attractors for Egyptian tech entrepreneurs,” Motaz Abuonq, CEO and founder of Value Makers Studio, told Arab News.

VMS is a Saudi-based venture studio that supports Egyptian and regional startups with funding opportunities and consulting to boost their entry into the Kingdom.

The entrepreneurial bridge

Abuonq explained that Egyptian entrepreneurs benefit from Saudi Arabia’s advanced infrastructure, simplified regulations, and substantial financial backing from entities such as Saudi Venture Capital Co. These resources provide a robust foundation for startup growth.

“The regulatory environment is being streamlined to attract foreign investment, making it easier for businesses to establish and operate,” Abuonq added.




Motaz Abuonq, CEO and founder of Value Makers Studio. (Supplied)

Extensive funding opportunities are available from both private and public sectors, with many investors leaning toward innovative tech solutions, he added.

Saudi entrepreneurs find Egypt appealing due to its skilled workforce, cost efficiency, and strategic location, Abuonq explained.

Egypt’s position as a gateway to African and Middle Eastern markets and its thriving entrepreneurial community in Cairo enhances its attractiveness.

“Egypt offers a large pool of educated tech professionals and relatively lower operating costs, which are significant advantages for Saudi startups,” noted Abuonq.

Mohammed Al-Zubi, founder and managing partner of Saudi-based VC Nama Ventures, echoed Abuonq’s sentiment about Egypt’s large talent.

In an interview with Arab News, Al-Zubi explains that Nama is interested in investing in Egyptian startups due to the size of the market and the vast talent pool.




Mohammed Al-Zubi, founder and managing partner of Saudi-based VC Nama Ventures. (Supplied)

“Egypt is the biggest country in the Arab world in terms of population, and Egyptians are leaders in terms of tech talent and their price per value factor,” he said.

Abuonq further explained that the advanced entrepreneurial community in Cairo, with numerous incubators and accelerators, supports startups and fosters a collaborative environment.

“Cultural and historical ties, including a shared language and similar customs, further ease business operations and collaboration between the two countries,” he added.

Abuonq explained that despite many similarities, the two nations also share differences.

“Saudi Arabia’s decision-making process tends to be more conservative and time-consuming due to multiple approval layers, while Egypt’s regulatory environment, although stable, includes bureaucratic challenges,” Abuonq stated.

“Saudi Arabia is reforming its business laws to attract foreign investment, but navigating these changes can be complex,” he added.

Conversely, Egypt’s regulatory environment may be more stable, but it will also face bureaucratic hurdles.

Intellectual property protection is another differentiator, with Saudi Arabia enhancing its laws under Vision 2030, providing better safeguards for technological innovations compared to Egypt, Abuonq explained.

Nama Ventures has successfully navigated the cultural and regulatory differences between the two countries, facilitating seamless investments in Egyptian startups.

“In terms of Nama, we have been able to seamlessly invest in Egyptian startups just as we do with Saudi startups, in terms of investing using standard investment instruments at the holding level and then having these holding companies own the operating companies in Egypt almost 100 percent,” Al-Zubi said.

Glowing case studies

Success stories exemplify the potential for cross-border entrepreneurship.

“Egyptian startup EYouth has become a notable educational partner for Saudi institutions, while Saudi companies like Mrsool and Foodics have successfully penetrated the Egyptian market, capturing significant market shares and becoming well-known brands,” Abuonq said.

These examples highlight the unique opportunities each market offers. In Saudi Arabia, large projects such as NEOM and Red Sea Global create avenues for AI, renewable energy, and smart city solutions, he added.

Egypt, with its youthful population and numerous innovation hubs, is a fertile ground for new technologies.

“A large segment of young people in Egypt are ready to adopt new technologies, and numerous innovation centers and business incubators support startup growth,” Abuonq said.

Success stories, such as Egyptian last-mile company ShipBlu, demonstrate the potential for cross-border entrepreneurship. Al-Zubi highlighted ShipBlu as an example of a great bet by Nama Ventures, attributing its success to the complementary nature of its leadership team.

Several startups have announced plans to expand to the Saudi market this year with the latest being Egypt’s e-commerce marketplace Kemitt.

In February, Egyptian fintech Khazna also announced its plans to enter the Saudi market through a partnership with Khwarizmi Ventures.

Two months later, Egyptian group-buying startup Waffarha secured a seven-figure seed round from VMS, enabling it to initiate its plans to expand to the Saudi market.

Egypt’s artificial intelligence firm Intella has also seen significant growth in the Kingdom, enough to relocate its headquarters to Saudi Arabia.

In an interview with Arab News last year, Nour Taher, CEO of Intella, said that the Kingdom is becoming a hub for tech companies.

“Saudi Arabia is currently our largest market with 70 percent of our business coming from there. We have just taken the decision to relocate our HQ there to better serve our existing clients and further expand our business. We are also inspired and aligned with Saudi Arabia’s Vision 2030,” she said.

Crossing the bridge

To address expansion challenges, thorough market research, regulatory compliance, and cultural adaptation are essential.

Abuonq emphasized the importance of building partnerships and hiring local consultants to navigate regulations.

“Understanding local consumer behavior and adapting business strategies to align with cultural differences are crucial for success,” he advised.

Building partnerships with local companies can facilitate market entry while hiring local legal and business consultants can help navigate regulations and ensure compliance with the law, he explained.

Enhancing partnerships between the Saudi and Egyptian tech ecosystems requires strategic initiatives such as bilateral trade agreements, transnational incubators, and joint ventures, as well as cultural exchange programs and joint innovation platforms.

“Governments and organizations should facilitate cross-border operations and create platforms for startups to collaborate and share technological advancements,” Abuonq suggested.

He added that joint ventures and partnerships between companies from both countries can leverage strengths and market insights, and cultural exchange programs can promote understanding and collaboration among entrepreneurs and tech professionals.

In his experience assisting Egyptian tech entrepreneurs in Saudi Arabia, Abuonq identified regulatory navigation, market adaptation, and cultural sensitivity as primary challenges.

Helping startups understand and comply with complex and evolving regulations in Saudi Arabia is crucial, as is assisting them in adapting their products and services to meet local market needs and consumer behavior.

“Ensuring startups are culturally sensitive and adaptable in their business practices is another significant challenge,” he noted.

For Al-Zubi, fostering stronger partnerships between the Saudi and Egyptian tech sector involves enhancing exposure to each country’s entrepreneurial landscape.

“Any effort that strengthens exposure to each ecosystem’s startups is a positive effort in our opinion,” he stated, aligning with the strategic initiatives suggested by Abuonq.

Addressing the challenges and opportunities in assisting Egyptian startups expanding into Saudi Arabia, Al-Zubi emphasized the importance of a strong foundation.

“I would highly encourage Egyptian startups to scale to Saudi from a position of strength, not weakness,” he advised.

He further stressed the need for these startups to demonstrate success in their native market and ensure that their business models are functioning in a healthy fashion before considering expansion into Saudi Arabia. “It should be a market expansion strategy and not a migration play,” Al-Zubi added.


NEOM board of directors announces leadership change

Updated 12 November 2024
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NEOM board of directors announces leadership change

  • Head of Public Investment Fund’s Local Real Estate Division since 2018, Al-Mudaifer has a deep and strategic understanding of NEOM and its projects

NEOM: The NEOM Board of Directors on Tuesday announced the appointment of Aiman Al-Mudaifer as acting CEO of the company. Al-Mudaifer assumes leadership of NEOM, following Nadhmi Al-Nasr’s departure.

As NEOM enters a new phase of delivery, this new leadership will ensure operational continuity, agility and efficiency to match the overall vision and objectives of the project.

Al-Mudaifer takes the helm of the organization with the support of a strong leadership team across NEOM’s regions, sectors and departments.

Head of Public Investment Fund’s Local Real Estate Division since 2018, Al-Mudaifer has a deep and strategic understanding of NEOM and its projects.

In his role at PIF, Al-Mudaifer oversees all local real estate investments and infrastructure projects. He is also a board member of multiple prominent companies within the Kingdom.

NEOM is a fundamental pillar of Saudi Vision 2030 and progress continues on all operations as planned, as we deliver the next phase of our vast portfolio of projects including THE LINE, Oxagon, Trojena, Magna and The Islands of NEOM. 

Through these projects, NEOM seeks to achieve harmony between livability, business and nature, and to create a better future for current and future generations.


Maldives, Bulgaria push for greater climate action, financing

Updated 12 November 2024
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Maldives, Bulgaria push for greater climate action, financing

RIYADH: Insufficient financing continues to be a significant barrier preventing many countries, especially underdeveloped nations, from meeting their climate goals, according to the President of the Maldives.

Speaking on the second day of COP29, held in Azerbaijan from Nov. 11-22, Mohamed Muizzu emphasized that small island developing states require trillions, not billions, of dollars in climate finance.

“It is the lack of finance that inhibits our ambitions, which is why this COP, the finance COP, we need to deliver the new climate finance goal. This must reflect the true scale of the climate crisis. The need is in trillions, not billions,” Muizzu said.

He added, “It must consider the special circumstances of small island developing states — it must include adaptation, mitigation, and loss and damage.”

Muizzu also reiterated the importance of the environment for his country, stating: “You have called for stronger climate action. Our call has not changed. Our cause has not strayed because, for us, the environment and the ocean are more than resources. They are our cultural identity.”

In a similar vein, Bulgarian President Rumen Radev addressed the global impact of climate-related disasters, emphasizing that no region is immune to the deadly and costly consequences of climate change.

“Bulgaria is committed not only to being part of regional and energy cooperation initiatives across Central and Eastern Europe, the Balkans, and the Black Sea region but also beyond, by strengthening the links between the European Union and non-EU countries who share our priorities on climate neutrality, just energy transition, energy security, and low-carbon technological innovation,” Radev said.

He further called for broader action, stating, “All parties should undertake greater efforts to integrate climate change adaptation and resilience into all policies and strategies.”


Closing Bell: Saudi main index slips to 12,048

Updated 12 November 2024
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Closing Bell: Saudi main index slips to 12,048

RIYADH: Saudi Arabia’s Tadawul All Share Index fell on Tuesday, losing 58.74 points to close at 12,047.67.

The total trading turnover of the benchmark index was SR5.75 billion ($1.53 billion), with 70 stocks advancing and 152 declining.

Saudi Arabia’s parallel market saw a drop, losing 50.59 points to close at 29,110.41. The MSCI Tadawul Index also declined, shedding 5.06 points to end at 1,516.14.

The best-performing stock on the main market was Al Jouf Cement Co., with a 4.75 percent increase to SR10.58. Other top gainers included Malath Cooperative Insurance Co. and Elm Co., with shares rising by 4.40 percent to SR15.66 and 3.87 percent to SR1,101.1, respectively.

The worst performer on the main index was Fawaz Abdulaziz Alhokair Co., whose share price dropped by 4.42 percent to SR12.12.

National Environmental Recycling Co., also known as Tadweer, announced it had signed a memorandum of understanding with Re Sustainability Middle East Co. to explore the potential for establishing smelters and recycling units in the Kingdom. According to a statement on Tadawul, the deal is valid for one year and carries no immediate financial impact.

The company’s share price declined by 0.45 percent to SR13.4. 

Purity for Information Technology Co. announced it has secured a contract valued at SR10.7 million from Saudi Comprehensive Technical and Security Control Co. to supply technology equipment. The company stated that the financial impact of the contract will be reflected in the first quarter of next year.

Its share price dropped by 0.73 percent to SR8.33.

Red Sea International Co. reported a narrowed net loss of SR2.18 million for the first nine months of this year, compared to a SR54.7 million loss in the same period in 2023. According to a statement on Tadawul, the improvement was driven by a 515.78 percent year-on-year increase in sales revenue. However, Red Sea International’s share price declined by 4.05 percent to SR71.

Lazurde Co. for Jewelry reported a 42.98 percent decline in net profit for the first nine months, totaling SR24.8 million, compared to the same period last year. The company attributed this drop to a 6.61 percent year-on-year decrease in operating profit over the nine-month period. Lazurde’s share price dropped by 2.05 percent to SR13.36.


UN climate chief urges aggressive action as emissions hit GDP

Updated 12 November 2024
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UN climate chief urges aggressive action as emissions hit GDP

  • UN official warned that worsening climate impacts will ‘put inflation on steroids’ unless every country takes bolder climate action
  • Simon Stiell called on governments to leave COP29 with a clear global climate finance plan

RIYADH: The global climate crisis is rapidly evolving into an economic threat, with the impact of emissions reducing the gross domestic product of several countries by up to 5 percent, a UN official said. 

Speaking at the high-level segment for heads of state and government at the COP29 in Baku, Simon Stiell, executive secretary of the UN Framework Convention on Climate Change, emphasized the urgent need for more aggressive climate actions to address economic challenges, including rising inflation. 

“We used to talk about climate action as being mostly about saving future generations. But there has been a seismic shift in the global climate crisis, as the climate crisis is fast becoming an economy killer,” said Stiell. 

He added, “In this political cycle, climate impacts are curving up to 5 percent off GDP in many countries. The climate crisis is a cost-of-living crisis, as climate disasters are driving up costs for households and businesses.” 

Stiell’s comments came shortly after a report by finance consultancy Oxera, which revealed that climate-related extreme weather events have cost the global economy more than $2 trillion over the past decade, with the US being the most affected. 

The UN official warned that worsening climate impacts will “put inflation on steroids” unless every country takes bolder climate action. 

Stiell urged the world to learn from the COVID-19 pandemic, highlighting the economic suffering caused by slow and ineffective collective action on supply chain issues. 

Describing climate finance as “global inflation insurance,” he warned that failing to address the economic toll of climate change would lead to disaster. 

“Letting this issue languish halfway down cabinet agendas is a recipe for disaster,” he said. 

However, Stiell remained optimistic, asserting that effective climate action could save economies and create new economic opportunities. He pointed to the growth of renewable energy as a potential driver of stronger financial states for nations. 

“This isn’t just about saving your economies and people,” he said. “Bolder climate action can drive economic opportunity. Cheap, clean energy can be the bedrock of your economies. It means more jobs, growth, less pollution choking cities, healthier citizens, and stronger businesses.” 

Stiell called on governments to leave COP29 with a clear global climate finance plan and urged international cooperation as the key to combating global warming and ensuring humanity’s survival. 

“We need your direct engagement on new national climate targets and plans — NDCs — so that all of you can benefit from the boom in clean energy and climate resilience,” said Stiell. 

He added: “These are not easy times, but despair is not a strategy, nor is it warranted. Our process is strong, and it will endure. After all, international cooperation is the only way humanity can survive global warming.” 


OPEC revises down global oil demand growth forecasts for 2024, 2025

Updated 12 November 2024
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OPEC revises down global oil demand growth forecasts for 2024, 2025

  • OPEC revised its 2024 global oil demand growth estimate to 1.82 million barrels per day, down from 1.93 million bpd forecast last month

LONDON: The Organization of the Petroleum Exporting Countries has again downgraded its global oil demand growth projections for both 2024 and 2025, marking the fourth consecutive reduction.

The revision, announced on Tuesday, underscores weaker demand expectations for key regions such as China, India, and other parts of the world.

The updated forecast highlights the ongoing challenges faced by OPEC+, the broader alliance that includes OPEC members and partners like Russia. Earlier this month, OPEC+ delayed plans to increase oil output starting in December, citing concerns over falling oil prices.

In its latest monthly report, OPEC revised its 2024 global oil demand growth estimate to 1.82 million barrels per day, down from 1.93 million bpd forecast last month. This marks the first revision to the outlook since it was initially set in July 2023.

China was the primary driver of the downward revision. OPEC reduced its forecast for Chinese oil demand growth to 450,000 bpd, down from 580,000 bpd, noting that diesel consumption in September dropped year on year for the seventh consecutive month. OPEC attributed this decline to a slowdown in construction and weak manufacturing activity, as well as the rising use of LNG-fueled trucks in China.

The weaker outlook weighed on oil prices, with Brent crude trading below $73 per barrel following the release of the report.

The demand outlook for 2024 remains uncertain, with significant differences among forecasters regarding the strength of global demand growth, particularly concerning China’s recovery and the pace at which the world transitions to cleaner fuels.

In addition to the 2024 revision, OPEC also lowered its forecast for global oil demand growth in 2025 to 1.54 million bpd, down from the previous estimate of 1.64 million bpd.