Imagine a nation where the e-commerce and retail sectors are thriving, capturing the attention of investors worldwide. Saudi Arabia stands at the forefront of this exciting landscape, continuing to lead the venture capital scene in the Middle East.
In the first quarter of 2024, Saudi Arabia attracted a remarkable $240 million in investments, making it the most funded country in the region. Despite a notable 70 percent drop compared to the previous quarter and a 42 percent decrease annually, the Kingdom’s performance aligns with broader market trends across the Middle East and North Africa.
Resilient Deal Flow Amidst Market Changes
While the total funding may have dipped, the resilience of Saudi Arabia’s deal flow is worth noting. With 35 deals recorded in the first quarter of 2024, the numbers remained consistent with the last quarter of 2023 and showed only a 13 percent annual decline. Impressively, the top 10 deals constituted a substantial 85 percent of the total capital deployed, underscoring the significant impact of key transactions. The report further indicates that smaller deal sizes became more common, as the reduction in funding outpaced the decrease in deal flow.
A standout moment in this period was Salla’s $130 million deal, representing a staggering 54 percent of the total funding in Saudi Arabia. This achievement marked the Kingdom as the sole nation in the MENA region to secure a mega-deal investment in 2024. Furthermore, Saudi Arabia’s investments accounted for 65 percent of the total capital deployed across MENA in the first quarter.
Thriving E-commerce and Retail Sector
The e-commerce and retail industry continues to shine as the leading sector within Saudi Arabia’s venture capital landscape, significantly bolstered by Salla’s impressive deal. Meanwhile, fintech has emerged as the most active industry in terms of transactions across Saudi Arabia and the broader MENA region, encompassing countries like the UAE and Egypt.
Despite the challenges of reduced funding, investor participation in Saudi Arabia saw a 5 percent increase year-on-year in the first quarter of 2024. Additionally, there has been a noticeable rise in the involvement of Saudi-based investors since 2023, pointing to growing confidence and interest within the local market.
Saudi Arabia’s investment landscape is a testament to the Kingdom’s enduring appeal and potential for growth, offering a wealth of opportunities for savvy investors looking to be part of its burgeoning success story.
