Startup Wrap – Saudi based startups continue to raise significant funding

Saudi Arabia’s Lendo, a Shariah-compliant debt crowdfunding marketplace, has raised SR105 million ($28 million) in a series B funding round led by Sanabil Investments, a company owned by the Public Investment Fund. (SPA)
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Updated 16 December 2023
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Startup Wrap – Saudi based startups continue to raise significant funding

  • Naeem recently closed an undisclosed pre-seed funding round led by Lunment and a group of angel investors

CAIRO: The startup ecosystem in Saudi Arabia remains at the forefront of regional funding trends, attracting substantial investments.

Naeem, a Saudi Arabia-based software as a service platform targeting the salon and beauty sector, has recently closed an undisclosed pre-seed funding round led by Lunment and a group of angel investors.

Founded in 2022 by Abdullah Al-Mansour and Saleh Al-Butti, Naeem’s services, which cater to both customers and business owners, include point of sale systems, reservations, financial, and operational management.  




UAE-based agritech Pure Harvest Smart Farms announced the acquisition of Red Sea’s production facility in Saudi Arabia to expand its farm footprint. (Supplied)

“We are pleased to close this financing round, which will help us expand and enhance our presence. This financing round reflects the great optimism and growing support for Naeem and represents an important turning point in our journey towards achieving success and innovation in this sector,” Al-Mansour said.

The company aims to utilize this funding to bolster its presence within the Saudi market.

“We are committed to providing the best digital solutions for the personal care sector. We can see that our solutions have helped salons and beauty centers improve their businesses and provide a better experience for their customers,” Al-Butti added.




Founded in 2022 by Abdullah Al-Mansour and Saleh Al-Butti, Naeem’s services include point of sale systems, financial, and operational management. (Supplied)

Lendo raises $28m for Shariah-compliant crowdfunding

Saudi Arabia’s Lendo, a Shariah-compliant debt crowdfunding marketplace, has raised SR105 million ($28 million) in a series B funding round led by Sanabil Investments, a company owned by the Public Investment Fund.  

The round also saw contributions from Shorooq Partners, AB Ventures, and others.  




Mohammad Jawabri, Lendo co-founder and COO

Founded in 2019 by Osama Al-Raee and Mohammad Jawabri, Lendo assists small and medium enterprises with digital pre-financing of invoices and offers quick, short-term cash borrowing options.

The fresh capital will aid Lendo’s expansion into new markets and the development of new Shariah-compliant products.

“The growing demand for alternative, agile, and accessible lending solutions presents a significant opportunity. At Lendo, we are well-positioned to lead the charge in promoting financial inclusion not only in Saudi Arabia but also beyond. By fueling SME growth, we aim to contribute to the realization of Saudi Arabia's Vision 2030 economic goals and to create a ripple effect of opportunity throughout the MENA (Middle East and North Africa) region,” said Jawabri.

The growing demand for alternative, agile, and accessible lending solutions presents a significant opportunity. At Lendo, we are well-positioned to lead the charge in promoting financial inclusion not only in Saudi Arabia but also beyond.

Mohammad Jawabri, Lendo co-founder and COO

Pure Harvest Smart Farms acquires RedSea’s CEA facility in Saudi Arabia

UAE-based agritech company Pure Harvest Smart Farms has announced its acquisition of RedSea’s controlled-environment agriculture production facility in Saudi Arabia.  

Set to take over operations in January 2024, this move enables Pure Harvest to expand its farm footprint and benefit from RedSea’s SecondSky technology.  

This technology, a heat-blocking roofing solution, boosts energy efficiency in greenhouses.  

Founded in 2016 by Sky Kurtz, Mahmoud Adi, and Robert Kupstas, Pure Harvest specializes in hydroponic technology for growing fruits and vegetables in desert climates. The acquisition also includes a 40-hectare land bank co-located with the facility.

“This transaction allows us to double our footprint in the Kingdom and serves as a foundational deployment of our novel ‘franchise farming’ business model, a solution that has been under development for over two years,” Kurtz said.

Founded in 2018 by Mark Tester and Ryan Lefers, RedSea utilizes salt water to grow local produce more sustainably to reduce carbon emission and resource scarcity.

“We always planned a transition from farm operator to a pure-play technology company. In Pure Harvest, we have found a custodian for what we have built in the Kingdom to-date, including our fruitful partnership with Alajaweed Farm,” Lefers stated.

Pala De 7 raises $1m to create padel community platform

Saudi-based startup Pala De 7 raised SR3.75 million led by sports technology startup Grintafy Technology with participation from AlTahan and Shaghaf Investments.

The company aims to create a new community platform for Padel tennis players in the Kingdom.

Founded by Tarek Ashoor, Pala De 7 is set to launch its platform in early 2024 which will offer field registration, court booking, and matchmaking.

HyveGeo secures pre-seed funding led by SystemaNova.vc

HyveGeo, a UAE-based climate technology startup, has recently closed a pre-seed funding round, the amount of which remains undisclosed, led by SystemaNova.vc.  

Co-founded in 2023 by Abdulaziz bin Redha, Samsurin Welch, Eva Morales, and Harjit Singh, the company focuses on using microalgae technology for soil regeneration and carbon removal.  

HyveGeo plans to pilot its program in the UAE with this new funding.

Fundbot secures $1.5m for MENA expansion

UAE-based fintech Fundbot has raised a $1.5 million seed round led by Hambro Perks Oryx Fund, supported by Aditum Investment Management Limited, Flat6Labs, Middle East Venture Partners, and PlusVC.  

Founded in 2020 by Karl Abou Zeid, Fundbot simplifies corporate lending and payments between banks, buyers, and sellers.  

The investment is set to fuel the company’s expansion plans in the MENA region, starting with the UAE and Saudi Arabia and later extending to Oman, Bahrain, and Egypt.

Midori Network raises $200k for mobile recycling modules

Midori Network, a UAE-based climate tech startup, has secured $200,000 in pre-seed funding from Kirill Veselov, a former investment director at Mint Capital.  

Founded in 2023 by Fedor Smirnov, the startup operates a network of container-based mobile recycling modules addressing the plastic waste problem in rural areas.  

Part of the TECOM Group PJSC business incubator in5, Midori Network aims to expand its eco-conscious solutions globally with this funding.

Mubadala Capital joins $48m series A in Andalusia Labs

Abu Dhabi’s Mubadala Capital, a $280 billion global sovereign fund, has participated in a $48 million series A funding round for US-based blockchain startup Andalusia Labs.  

The round also included Lightspeed Venture Partners, Pantera Capital, Framework Ventures, Bain Capital Ventures, and Digital Currency Group.  

The new funding round puts Andalusia Labs at $1 billion valuation, marking it as a unicorn.  

Co-founded in 2021 by Drew Patel and Raouf Ben-Har, the company specializes in risk management infrastructure for digital assets and plans to establish its global headquarters in Abu Dhabi Global Markets.  

The funding will accelerate product development, enhance institutional partnerships, and support global expansion.

Terra raises $2m for electric mobility solutions

Terra, a UAE-based electric mobility company, has raised a $2 million seed round from a group of angel investors.  

Founded in 2010 by Husam Zammar, Terra provides a battery swapping and recharging platform, alongside a fleet of electric vehicles.  

This funding will be used to enhance its mobile application for riders and cloud-fleet management dashboard for operators in the last-mile sector.  

Terra’s recent launch of its first fleet of electric motorbikes follows the successful completion of a pre-seed round earlier this year.

 


Saudi Arabia and Switzerland strengthen economic ties at 4th Financial Dialogue in Zurich

Updated 20 June 2024
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Saudi Arabia and Switzerland strengthen economic ties at 4th Financial Dialogue in Zurich

RIYADH: Saudi Arabia and Switzerland are poised to deepen cooperation in finance and economics as top officials convened for the 4th Saudi-Swiss Financial Dialogue in Zurich.    

The event, inaugurated by Saudi Arabia’s Finance Minister Mohammed Al-Jadaan, focused on enhancing macroeconomic outlooks, fostering international multilateral cooperation, and advancing specific bilateral economic initiatives.    

It comes against the backdrop of a robust trade relationship between the countries. In 2023, Saudi Arabia exported $810.67 million worth of goods to Switzerland, while Swiss exports to the Kingdom totaled $6.77 billion, according to the UN’s international trade database.   

“The Saudi-Swiss relations have been growing for more than six decades, and our meeting ... for the 4th Saud-Swiss Financial Dialogue in Zurich embodies the two nations’ keenness to deepen cooperation between Saudi Arabia and Switzerland in various fields, most notably in finance and economics,” Al-Jadaan said in a post on X a day before the event.   

“Today, I was pleased to inaugurate the 4th Saudi-Swiss Financial Dialogue with the participation of the Head of the Federal Department of Finance & Vice President of the Swiss Federal Council, Ms. Karin Keller-Sutter. I emphasized on the Kingdom’s aspiration to explore new areas and markets that would deepen the existing cooperation between the two nations,” the minister added in another post.

In February, a high-profile delegation of Swiss business leaders visited Saudi Arabia to explore burgeoning trade and investment prospects in the Kingdom.   

Guy Parmelin, a Swiss Federal Councillor and head of the Department of Economic Affairs, Education and Research, led the delegation at the time.  

In an interview with Arab News during his visit, Parmelin highlighted the robust growth in trade between Switzerland and Saudi Arabia in recent years. “Swiss companies are very interested in investing in the Kingdom,” he added.   

He emphasized the eagerness of the accompanying business delegation to capitalize on Saudi Arabia’s rapidly transforming economic landscape.   

In November 2022, during an official visit to Riyadh, Swiss Finance Minister Ueli Maurer met with his Saudi counterpart, Al-Jadaan, and they signed a cooperation agreement to inaugurate the third Saudi-Swiss Financial Dialogue.   

Lauding the strength of the Saudi economy, Maurer stressed the importance of bilateral dialogues in developing economic activities in both countries and strengthening Switzerland’s role as a strategic partner for the Kingdom in achieving the goals of Vision 2030. 


Pakistan stocks hit record high on budget, IMF optimism

Updated 20 June 2024
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Pakistan stocks hit record high on budget, IMF optimism

  • Pakistan released tax-heavy budget last week which investors believe will strengthen case for new IMF bailout
  • Market breached 78,000 level for first time during intraday trade as it reopened after five-day break on Thursday

KARACHI: Pakistan’s benchmark share index rose 2.8 percent to a new record high on Thursday, driven by expectations last week’s budget will strengthen the case for a new bailout from the International Monetary Fund.

The government’s budget was welcomed by investors as it avoided an anticipated increase in capital gains tax, despite an ambitious tax revenue target.

The market extended its post-budget rally on Thursday when it reopened after a five-day break, which included a public holiday, and breached the key 78,000 level for the first time during intraday trade.

Foreign portfolio investment in the market is at the highest in almost ten years, with inflows of $83 million as of June 14, data compiled by Topline Securities and JS Global Capital showed.

Sohail Mohammed, CEO of Topline Securities, said that a statement from credit rating agency Fitch that the budget would strengthen the prospects for an IMF deal would help to bring more foreign inflows.

The benchmark share index is up 26.2 percent year to date and has almost doubled since Pakistan signed a nine-month standby arrangement with the IMF last summer.

“Pakistani equity investors are driving the PSX higher, continuing to unlock valuations on better sentiment, which is a trend that began when Pakistan signed its last IMF deal last summer,” said Amreen Soorani, head of research at JS Global Capital.

“The trend paused briefly on anticipation of stricter capital gains taxes, which did not materialize,” she said, adding that the index is trading at a four times price to earnings ratio despite the recent rally and offers attractive dividend yields.

The financial sector was up 4.4 percent, with banks like UBL, HBL, MCB, Bank Alfalah, Habib Metropolitan Bank, Allied Bank, up more than 4 percent.

Adnaan Sheikh, assistant vice president of research at Pak Kuwait Investment Company, said that foreign investor interest and the central bank’s decision to cut its key rate by 150 basis points last week — its first rate cut in nearly four years — had pushed the market up.

Apart from the capital gains tax, analysts said the budget and other revenue measures were in line with expectations and key to sealing a new IMF program. This will include a challenging tax target of a near-40 percent jump from the current year and a sharp drop in the fiscal deficit to 5.9 percent of GDP from 7.4 percent for the current year.

Sheikh said the strict budgetary measures to secure new IMF funding will be likely to attract more foreign investors to the market, in addition to the current inflows.

Pakistan’s lower house of parliament is set to meet later on Thursday to debate the budget that the government presented last week. 


Giga-projects propel Saudi Arabia’s construction boom amid global interest, study says

Updated 20 June 2024
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Giga-projects propel Saudi Arabia’s construction boom amid global interest, study says

RIYADH: Saudi Arabia’s state-backed initiatives, including NEOM and Vision 2030, are driving growth in the construction sector, attracting substantial domestic and international investments, an analysis showed.    

In its latest report, global consultancy firm Turner & Townsend highlighted that the construction activities are also driven by the Kingdom’s preparations for EXPO 2030 and the 2034 FIFA World Cup.   

This comes as Saudi Arabia emerged as the leader in global construction activity for the first quarter, with the Kingdom having $1.5 trillion of projects in the pipeline, according to a report released earlier this month by real estate services firm JLL. 

The JLL analysis further highlighted that the Kingdom accounted for a 39 percent share of the total construction projects in the Middle East and North Africa region, valued at $3.9 trillion. 

“The stand-out story is the accelerated development of Saudi Arabia, where vast ambitions are being realized via projects like The Line, King Salman Park and Diriyah Gate,” said Mark Hamill, director and head of Middle East real estate and major programs, at Turner & Townsend.   

The Line is a linear smart city currently under construction in Saudi Arabia’s $500-billion megacity NEOM, while King Salman Park is a 4102-acre large-scale public park and urban district which is being developed in Riyadh.   

The report highlighted that despite political uncertainties, substantial investments are driving growth in the Gulf region as countries seek to diversify beyond traditional energy sources.  

This occurs against the backdrop of Turner & Townsend ranking the Kingdom as the 19th most expensive country for construction globally, contrasting sharply with the US, which dominated the top 10 list. 

The report further noted that construction cost inflation in Riyadh is easing from the highs of 7.0 percent seen in 2023, but is forecasted to remain high at 5.0 percent through 2024.   

The analysis also highlighted Saudi Arabia’s efforts to attract global corporate occupiers through its Regional Headquarters Program.  

It added: “This scheme encourages companies to launch offices in Saudi Arabia and there are cost advantages to office investment with an average high-rise central business district office in Riyadh costing a relatively low $2,266 per sq. m.”   

The UK-based company also pointed out that Saudi Arabia is also facing a shortage of skilled labor which is crucial to materialize and fulfill construction activities as planned.   

“Skilled labor shortages are also keeping costs elevated as Saudi Arabia suffers from a distinct shortage of skilled labor that is vital to deliver its most ambitious programs. The talent and resources needed for giga-projects in the country are also stretching overall supply chain capacity across the Middle East,” said the report.     

Regional insight  

According to the report, Qatar’s capital city Doha is the second most expensive market in the region at $2,096 per sq. m.   

However, following the high output in the lead-up to the 2022 FIFA World Cup, construction cost inflation is projected to fall from 3.5 percent in 2023 to 2.5 percent in 2024, the study said.   

On the other hand, Dubai has an average cost to build of $1,874 per sq. m., supported by high tourism activity and residential sector development.  

“The UAE has been a hotspot for tourism in the region in recent years and its relatively low cost of construction, when compared with Western markets, still makes it an attractive place to build the hubs and amenities for international visitors,” said the report.     

It added: “In Dubai, residential development is buoying the local market as the city aims to support its growing population. Its attractiveness as a market is bolstered by its comparably low cost of construction.”   

On the other hand, Abu Dhabi is the fourth most expensive market in the Middle East at $1,844.2 per sq. m.   

Hamill noted that there are considerable real estate opportunities in the UAE and Qatar as inflation cools.   

He added: “Nevertheless, with labor capacity being stretched across the region, clients will need to review their procurement and contracting models to help mitigate supply chain disruption and maximize the potential opportunities on offer.”   

Global outlook  

The report revealed that construction pipelines globally are set to grow this year, but skill shortage could remain a major concern.   

“The global real estate market is emerging from a challenging period of inflationary pressures, volatility and disruption. Our sector has proved resilient, and a focus on building new approaches to procurement and supply chain development to drive efficiency and productivity is opening new opportunities across many markets,” said Neil Bullen, managing director, global real estate at Turner & Townsend.   

He added: “Clients need to understand where labor bottlenecks may constrain their capital investment programs and work collaboratively with the supply chain to understand how best to mitigate the risk to delivery.”   

The US dominated the rankings of the most expensive places to build, with six cities from the country grabbing their spots in the top 10 list.   

New York retained its position as the most expensive market to build in for the second year running at an average cost of $5,723 per sq. m., closely followed by San Francisco at $5,489.   

Zurich came in the third spot as it surpassed Geneva in the ranking with an average cost of $5,035 per sq. m. Geneva, which came in the fourth spot, averaged $5,022 per sq. m.   

US cities Los Angeles, Boston, Seattle and Chicago came in the fifth, sixth, seventh and eighth spots respectively in the list.   

From Asia, Hong Kong came in the ninth spot with an average cost of $4,500, followed by London at $4,473.   

The report also highlighted that implementing technology in the construction sector could help overcome various challenges faced by the industry.   

“Accelerating digitalization also presents a huge opportunity, but this requires us to keep up with the demand for skilled labor, and persistent shortages risk constraining potential growth,” said Bullen.   

He added: “As interest rate cuts become an increasing possibility for many markets, and pent-up investor appetite can be unlocked, capacity could be tested still further.” 


Credit facilities for UAE’s business and industrial sectors exceed $206.2bn

Updated 20 June 2024
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Credit facilities for UAE’s business and industrial sectors exceed $206.2bn

RIYADH: The cumulative credit balance in the UAE’s business and industrial sectors rose to 757.4 billion dirhams ($206.2 billion) in the first quarter of the year, up from 741.8 billion dirhams at the end of 2023.

A release from the Central Bank of the UAE showed that credit facilities extended just by the country’s national banks to these sectors reached 15.6 billion dirhams in the three months of the year.

Comparing month-on-month figures, the credit balance saw a rise of 9.3 billion dirhams in March compared to the previous month, reflecting a steady upward trend in lending activities, the Emirates News Agency said.

Year-on-year, the sectors experienced a substantial 3.02 percent increase in credit availability, amounting to 22.2 billion dirhams from 735.2 billion dirhams in March 2023, showcasing sustained financial support over the past year.

National banks emerged as the primary financiers, contributing 841.7 billion dirhams or 90 percent of the combined credit balance for these sectors by the end of the first quarter of 2024, according to WAM.

In contrast, foreign banks held a smaller share, providing 84.3 billion dirhams, highlighting the dominant role of domestic financial institutions in driving economic growth.

Geographically, Abu Dhabi-based banks played a significant role by extending credit amounting to 374.1 billion dirhams, while Dubai-based banks provided 363.3 billion dirhams. 

Additional Emirates banks collectively contributed 104.3 billion dirhams to support business and industrial activities during the same period, underscoring the balanced regional distribution of financial resources.

In terms of banking preferences, conventional financial institutes continued to be the preferred choice for credit financing, accounting for approximately 694 billion dirhams or 82.5 percent of the total credit extended to the trade and industry sectors by March 2024. 

Islamic banks, reflecting their growing influence in the financial sector, contributed approximately 147.7 billion dirhams, constituting 17.5 percent of the financing provided, reflecting their expanding role in catering to diverse financial needs.

In 2023, the UAE’s industrial sector alone contributed $54 billion to the country’s gross domestic product, up 9 percent compared to 2022 figures.     

The boost was attributed to four main pillars, including providing a business-friendly environment that supports the growth and attractiveness of UAE firms, the Emirates News Agency reported.


Saudi Arabia leads emerging markets in bond issuance, surpassing China

Updated 20 June 2024
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Saudi Arabia leads emerging markets in bond issuance, surpassing China

RIYADH: Saudi Arabia has emerged as the top issuer of international bonds among emerging markets, surpassing China with $33.2 billion in bond sales to date, according to a new report.  

This marks the first time in 12 years that China has been displaced from the top spot, thanks to an 8 percent growth in Saudi Arabia’s bond sales this year, Bloomberg reported.  

The Kingdom’s record pace of borrowing is driven by increasing support from global debt investors for the nation’s Vision 2030 plan which aims to diversify the Saudi economy away from oil dependence and transform the country into a global business hub by the end of the decade.  

In contrast, Chinese borrowers are experiencing a significant shift in their financing strategies. A surge in demand for local-currency bonds has slowed China’s international bond issuance to one of its lowest levels in recent years.   

“Sentiment for Saudi bonds is very healthy,” Apostolos Bantis, managing director of fixed-income advisory at Union Bancaire Privee, told Bloomberg.  

“It’s not a surprise that the Kingdom has become the largest EM bond issuer given its large funding needs for large infrastructure projects,” he added.  

Saudi Arabia’s ascent is particularly notable given its relatively smaller economy compared to China.   

With a gross domestic product only 1/16th the size of China’s, the Kingdom’s ability to attract substantial international investment is a testament to the growing confidence in its economic reforms and strategic vision.  

The surge in bond issuance across emerging markets reflects a broader trend of falling borrowing costs and a robust appetite for higher yields among global investors.   

This favorable environment is enabling countries like Saudi Arabia to secure funding for ambitious projects aimed at economic diversification and enhanced global connectivity.  

In addition to boosting its bond issuance, Saudi Arabia is actively seeking alternative sources of funding to address an anticipated fiscal shortfall of approximately $21 billion this year, the report stated.  

The Kingdom expects its total funding activities for the year to reach around $37 billion to help accelerate the Vision 2030 initiatives.

The substantial turn to the bond market is partly a response to shortfalls in foreign direct investment and constrained oil revenues due to supply cuts.