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Saudi startup ecosystem takes a giant LEAP

Several new venture capital funds were set to launch, it was announced during LEAP 2024, Kingdom’s highly attended startup and technology event. (Supplied)
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Updated 09 March 2024
Nour El-Shaeri
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Saudi startup ecosystem takes a giant LEAP

  • Investcorp’s $500m fund will support growth-stage ventures in Kingdom
Updated 09 March 2024
Nour El-Shaeri

RIYADH: Saudi Arabia’s entrepreneurship scene witnessed a transformative surge in investment activity at LEAP 2024 – the Kingdom’s highly-attended startup and technology event.

Several new venture capital funds are set to launch, it was announced at the Riyadh-based gathering, aiming to energize various sectors within Saudi Arabia and the broader Middle East and North Africa region.  

Investcorp is spearheading this initiative with a $500 million fund dedicated to supporting growth-stage ventures in Saudi Arabia, bolstered by a $35 million investment from Saudi Venture Capital.  

Concurrently, Oasis Capital is preparing to introduce a $100 million fund focusing on early-stage international ventures. 

In the gaming and esports sector, the Saudi Esports Federation, in collaboration with the Social Development Bank and the National Technology Development Program, will unveil two funds under its Gaming and Esports Sector Financing Program.  

Furthermore, Saudi venture capital firms Merak Capital and Impact46 announced $80 million and $40 million funds, respectively. 

Plug and Play Tech Center is also entering the scene with a pioneering $50 million fund aimed at nurturing software and tech ventures in Saudi Arabia and the MENA region.  

Meanwhile, Takamol Ventures announced a $53 million venture capital fund at LEAP, targeting early-stage tech companies to fuel innovation. 

Fahad Al-Hussain, partner at US-based Seedford Partners, announced during a panel session that the firm is planning to launch a $100 million to $150 million space fund targeting international and local ventures in the sector. 

Moreover, Bahrain-based investment management firm Arcapita Capital closed its $500 million Saudi Logistics Fund III. 

Lastly, Unifonic is set to launch a $15 million fund focusing on software as a service and business-to-business startups in MENA, Pakistan, and Turkiye, signifying a broadening of investment horizons across the region.

Saudi Arabia’s Salla raises $130m pre-IPO round

Saudi Arabia’s SaaS sector is receiving a significant boost as Salla secured a $130 million pre-initial public offering investment by Investcorp and saw participation from Sanabil Investment and STV. 

Established in 2016 by Nawaf Hariri and Salman Butt, Salla has been at the forefront of empowering merchants by enabling them to establish their e-commerce online shops swiftly, often within hours.  

The funding was channeled through the Investcorp Saudi Pre-IPO Growth Fund LP, a strategic initiative designed to infuse equity growth capital into a diverse portfolio of companies primarily located in Saudi Arabia.  

“This investment propels us forward in our ongoing mission to open opportunities and empower individuals, SMEs, and enterprises to start and expand their businesses both within and beyond Saudi Arabia. We are committed to delivering innovative, customer-centric solutions that simplify and enhance the e-commerce experience for our merchants,” Hariri said.

UAE’s HRtech RemotePass closes $5.5m in a series A round

UAE-based HRtech startup RemotePass has successfully closed a $5.5 million series A funding round, with 212 VC leading the investment.  

The round also saw contributions from an array of prominent investors including Endeavor Catalyst, Khwarizmi Ventures, and Oraseya Capital, as well as Flyer One Ventures, Access Bridge Ventures, A15, and the Swiss Founders Fund. 

Founded in 2020 by Kamal Reggad and Karim Nadi, RemotePass specializes in offering businesses the ability to seamlessly onboard, manage, and compensate their workforce, particularly in regions where they may not have a local legal entity.  

Following its undisclosed pre-series A round in 2021, led by BECO Capital and supported by Wamda, Khawarizmi VC, and Flat6Labs, as well as Wealth Well, and a syndicate of Saudi investors, RemotePass is setting its sights on the Kingdom’s market.  

Saudi-based proptech Buildnow closes $9.4m seed funding

Saudi Arabia’s Buildnow secured $9.4 million in seed funding, comprising both equity, amounting to $6.5 million, and debt, totaling $2.9 million.  

Raed Ventures and Khwarizmi Ventures took the lead in this funding round, which also saw significant participation from international venture capitalists and influential local angel investors, including Abdulla Elyas, the co-founder of Careem. 

SPEEDREAD

• Oasis Capital is preparing to introduce a $100 million fund focusing on early-stage international ventures.

• In the gaming and esports sector, the Saudi Esports Federation will unveil two funds under its Gaming and Esports Sector Financing Program.

• Saudi venture capital firms Merak Capital and Impact46 announced $80 million and $40 million funds, respectively.

• Plug and Play Tech Center is also entering the scene with a pioneering $50 million fund aimed at nurturing software and tech ventures in the region.

• Takamol Ventures announced a $53 million venture capital fund at LEAP, targeting early-stage tech companies to fuel innovation.

Launched in 2022 by Hisham Al Saleh, Rahat Dewan, and Abdulla Sheikh, Buildnow introduces a build-now-pay-later model that significantly benefits the construction industry.  

The platform facilitates material procurement on credit for buyers, simultaneously ensuring upfront cash payments to SME suppliers, thus streamlining the supply chain and financial operations in the construction sector. 

The fresh influx of capital is set to catalyze Buildnow’s growth trajectory. The funds are earmarked for attracting and hiring top-tier global talent to bolster the Buildnow team, positioning the startup for expansion.

Saudi-based BRKZ secures $8m series A round

Saudi Arabia’s BRKZ has secured an $8 million series A co-led by 9900 and BECO Capital, with participation from Aramco’s Wa’ed Ventures, Knollwood Investment Advisory, RZM Investment, and MISY Ventures.  

Founded in 2022 by Ibrahim Manna, BRKZ is a B2B contech that provides a large selection of suppliers and materials through its platform, as well as multiple delivery and payment options. 

BRKZ will use the new funding to expand its footprint across Saudi Arabia and beyond.

Saudi fintech startup Rabeh Financial closed $800k seed round 

Saudi fintech Rabeh Financial closed a $800,000 seed investment round in collaboration with Mjalis Investment Co. and several angel investors, bringing the company’s valuation to $8 million. 

Founded in 2022 by Mohammed Al-Salmi and a group of advisors, Rabeh Financial aims to improve the experience of trading ownership and knowledge by allowing investors and entrepreneurs to discuss and assess investment ideas using AI and data analysis technology. 

With the new funds, Rabeh plans to increase its presence both inside and outside of the Kingdom.

KSA’s RasMal acquires Pentugram 

Saudi Arabia’s equity management platform RasMal has acquired UAE’s Pentugram to expand its offering into private capital investment management solutions, for an undisclosed value. 

Through the acquisition, Pentugram’s clientele will gain access to RasMal’s services, while RasMal will leverage the platform to provide investors and fund managers with solutions.

KSA’s Zetta Technologies raises $1.5m  

Saudi Arabia’s Zetta Technologies closed a $1.5 million pre-seed funding round from CoreVision. 

The company offers tech services as a subscription with a flexible payment plan, enabling large organizations and companies to benefit from their devices.

Topics: Startup ecosystem saudi startups LEAP 2024

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Red Sea Global offers more than 50 leisure activities: top official

Updated 30 April 2024
Reina Takla
Nirmal Narayanan
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Red Sea Global offers more than 50 leisure activities: top official

Updated 30 April 2024
Reina Takla Nirmal Narayanan

RIYADH: Contrary to popular conception, sporting activities provided in the Red Sea and AMAALA are not just confined to water, but these destinations offer exciting leisure choices on land as well, said a top official. 

Speaking to Arab News at the Future Hospitality Summit, Oliver Wood, senior director of Destination Development at Red Sea Global, said the destination currently offers more than 50 activities for visitors. 

Wood said that RSG created three business entities last year — Galaxea, WAMA, and Akun. 

Galaxea provides diving experiences to visitors, while WAMA and Akun offer water activities and adventure sports respectively. 

“Galaxea is a coral that’s endemic to the Red Sea. It looks like, a kind of submarine galaxy that sits below a constellation and is beautiful. Then we created WAMA which is a way for water. And then we created Akun, which to us, is obviously ‘to be’ in the moment, start when you stand, breathe, leave everything behind,” said Wood. 

He added: “So, all three of these businesses work together to do something that will reduce the misconceived fact that we are just water. We are land as well. In fact, similar to our surroundings, our land was created by water. Fifty million years ago, the sea was 120 km inland and 200 m higher. So we’re finding dinosaur bones. We’ve got petroglyphs, we’ve got ancient trade routes.” 

According to Wood, some of the land activities offered in the Red Sea and AMAALA destinations include biking and hiking, with RSG recently delivering electric fat bikes for visitors. 

“So for us, it’s about taking you out hiking. It’s taking you biking, supercool Akun electric fat bikes that we just got delivered. So, you can go sand, and gravel wherever you want. It’s about climbing to the top of our mountains,” he added. 

The RSG executive also lauded the efforts of the Saudi Sailing Federation and the Saudi Water Sports and Diving Federation in promoting water sports in the Kingdom. 

“The Saudi Sailing Federation, Saudi Water Sports and Diving Federation, they’re bringing this sport to the forefront. So, together we’ve created this blueprint so that you have more Saudis in the water, more tourists that are going in the water,” he noted. 

Wood said that the availability of e-foils is one of the major attractions in the destination. 

“E-foils is a surfboard that’s electrified, has this fin in the middle that pushes you above the water, so you glide through it without any friction. That is one of the most popular things we do. It is really good fun,” said Wood. 

He added: “You can kayak through mangroves. And, then below the water is incredible. It’s one of the most well-preserved reefs in the world, and we’re very lucky to be working with KAUST on the scientific side.” 

According to Wood, Galaxea is not just a diving brand, but it will allow visitors to understand the beauty and value of nature. 

“There are lots of rare and endangered species beneath the water and it’s just incredible. It is a beautiful experience that allows you to reset your mind and just have a beautiful time in the Red Sea,” said the RSG official. 

He revealed that RSG brand Corallium, which is a marine life institute, will help travelers understand more about protecting, preserving, and supporting water ecosystems. 

Wood added that Corallium would also help divers communicate with experts in real-time, as they enjoy the beauty of the marine world. 

According to the RSG website, Corallium can host 650 people at one time, and guests will be able to walk underwater, snorkel with rare species, participate in lab tours as well as dive into the depths of the Red Sea in a submarine. 

“So as a diver, so you go snorkeling, you’re kind of shut off from it and experiencing it. Then you can speak to somebody afterward and understand.

 “We try and extend that a bit further. you actually get to go out in these experiences and dive with a full face mask, communicating in real-time, under the water with our team,” he noted. 

Wood also revealed that RSG has plans to create a scuba spa, where people can enjoy the silence in water. 

Talking about the multiple options available for travelers in the Red Sea, he said: “You can be in the middle of desert dunes, you can be out in granite mountains. You can even go down to volcanoes. We have incredible volcanic lava fields that sit close to us. And then you can be in the water. You can be in front of 600-year-old pillars of coral reef. You can go through caves into the water.” 

Wood also hinted that RSG is working toward offering Red Sea and AMAALA destinations to people who fall both in the luxury class and the middle range. 

“We’re trying to show generosity in the value that we offer everybody there. We’ve tried to not only benchmark globally but try and push it right down so it is accessible to everybody and so that everybody can come and really enjoy it,” said Wood. 

He added: “For me, it’s about building things around that enable people to come and get involved with it. So there are all sorts of things that we’re working on right now that will be revealed and are coming up.” 

Topics: FHS24

BlackRock, PIF launch multi-asset investment management platform in Riyadh

Updated 30 April 2024
Arab News
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BlackRock, PIF launch multi-asset investment management platform in Riyadh

  • First-of-its kind partnership aligns with PIF’s initiatives to drive further growth of the Saudi capital markets ecosystem, sector
  • It will be anchored by an initial investment mandate of up to $5bn from PIF
Updated 30 April 2024
Arab News

RIYADH: BlackRock Saudi Arabia and the Public Investment Fund signed a memorandum of understanding on Tuesday which entitles the former to establish a Riyadh-based multi-asset investment platform.
It will be anchored by an initial investment mandate of up to $5 billion from PIF, subject to the achievement of agreed milestones between the parties, said a media statement.
Both parties have expressed the intention to establish BlackRock Riyadh Investment Management, which will encompass investment strategies across a range of asset classes. It is expected to be managed by a Riyadh-based portfolio management team and supported by BlackRock’s global asset management platform.
Larry Fink, BlackRock’s CEO, said: “We are excited to build on the deep partnership we have developed with PIF over many years to launch this first-of-its-kind international investment management platform in Saudi Arabia.
“The continued growth of the Kingdom’s capital markets, and diversification of its financial sector, will contribute to future prosperity for its citizens, the competitiveness of its companies and the resilience of its economy.”
Saudi Arabia has become an increasingly attractive destination for international investment as Vision 2030 comes to life, according to Fink.
He added: “We are pleased to offer investors from around the world the opportunity to take part in this exciting, long-term opportunity.”
Yazeed Al-Humied, PIF’s deputy governor and head of MENA (Middle East and North Africa) Investments, said: “PIF’s relationship with BlackRock is well established and growing. This new landmark agreement represents a step forward in PIF’s work in making the Saudi investment and asset management market more internationally diverse and more dynamic.”
As Saudi Arabia continues to transform its economy, BRIM will seek to support foreign institutional investment into the Kingdom and further enhance the Saudi asset management industry, broadening local capital markets while driving investor diversification across asset classes, facilitating knowledge sharing and the development of Saudi-based asset management talent.
BRIM will be fully integrated with BlackRock’s investment capabilities and operating platform, benefiting from global market expertise.
The non-binding memorandum is subject to satisfying certain necessary conditions, regulatory approvals, and fulfilling specified milestones.

Topics: PIF BlackRock SaudiVision2030 diversification

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Hospitality brands sign deals to expand in Saudi market

Updated 30 April 2024
Nadin Hassan
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Hospitality brands sign deals to expand in Saudi market

Updated 30 April 2024
Nadin Hassan

RIYADH: Top hospitality brands signed deals at the Future Hospitality Summit in Riyadh to capitalize on the opportunities available in the Kingdom.

France-based Accor Group said it will strengthen its position in the Kingdom with the addition of more than 25,000 rooms and the launch of a wide variety of brands.

The global hospitality group also recently launched Accor One Living, an initiative offering specialized knowledge in mixed-use and branded residential development.

Ladun Investment Co. signed an agreement with Cheval Collection. The partnership encompasses multiple contracts for the construction and operation of Cheval Ladun Living, which is a hotel apartment tower located on King Fahd Road, near the King Abdullah Financial Center in Riyadh.

The deal represents Cheval Collection’s inaugural project in Saudi Arabia, featuring 130 residential units of varying sizes, from one to three rooms, alongside amenities like a gym, a swimming pool, and a sauna.

The project’s construction is scheduled to begin this year and will be completed in 2027.

Marriott International, Inc. and Al Qimmah Hospitality, a subsidiary of BinDawood Trading, signed an agreement to bring the JW Marriott brand to Jeddah.

Located on the Jeddah Corniche, the hotel is expected to become a prime destination for luxury-seeking travelers who desire a waterfront escape.

“The signing of JW Marriott Hotel Jeddah continues to reflect the strong growth opportunities for our luxury brands across the Kingdom. As part of the country’s Vision 2030 framework, Jeddah continues to build itself as a leisure and business destination,” Chadi Hauch, regional vice president of Marriott International, development of the Middle East, said in a press statement.

On behalf of Al Qimmah Hospitality, Abdul Razzaq BinDawood commented: “We will leverage our expertise and experience in the retail and hospitality sectors to make JW Marriott Hotel Jeddah a successful addition to the city’s landscape.” 

Baheej Tourism Development Co., a joint venture between ASFAR, the Saudi tourism investment company owned by the Public Investment Fund, and the Tamimi-AWN Alliance, signed a deal with Kerten Hospitality.

The agreement grants Kerten Hospitality management of Baheej’s hotel in Yanbu under the premium Cloud 7 brand.

Cloud 7 is an innovative hotel and residential lifestyle brand, recognized for its designs, check-in lobbies, healthy food options, and retail boutiques.

“Baheej’s collaboration with Kerten Hospitality underlines our core principle: empowering partners and subsidiaries through our expansive network,” Fahad bin Mushayt, CEO of ASFAR said.

The PIF-owned company also signed agreements with Mantis and KMC to manage the operations of Al Baha Mountain Lodge & Adventure Park.

Topics: FHS24

Cashless payments in Saudi Arabia to rise by 7.6% in 2024

Updated 30 April 2024
Arab News
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Cashless payments in Saudi Arabia to rise by 7.6% in 2024

Updated 30 April 2024
Arab News

RIYADH: Cashless payments in Saudi Arabia are expected to surge by 7.6 percent in 2024 to SR550 billion ($146.8 billion) as compared to SR511.5 billion the previous year, a report said.

The report issued by GlobalData, a London-based data analytics and consulting company, projected the Saudi card payments market to grow at an annual rate of 6.4 percent between 2024 and 2028 to reach SR705.2 billion. 

The uptick comes amid the Saudi government’s push for a cashless society by encouraging consumers to switch to cards for financial transactions.

“While cash has traditionally been a preferred method of payment in Saudi Arabia, its usage is on the decline in line with the rising consumer preference for electronic payments,” said Ravi Sharma, a lead banking and payments analyst at GlobalData. 

He added: “The country has a robust digital payment infrastructure, supported by a developing card market and a well-established card acceptance infrastructure.” 

Sharma further noted that Saudi Arabia’s government is taking effective steps to enhance the infrastructure in the country by encouraging merchants to adopt at least one electronic payment option apart from cash. 

The report, however, added that cash remains an integral part of the Saudi consumer payments landscape, particularly for lower-value transactions, but the usage of hard currency is showing signs of decline. 

Promoting digital payments is crucial for Saudi Arabia, as the Kingdom’s Vision 2030 aims to reduce cash transactions and increase the share of electronic payments to 70 percent of all transactions by 2025.

“The (COVID-19) pandemic changed the way Saudi consumers make payments, with an increasing number of consumers preferring contactless payments,” said Sharma. 

He added: “Contactless cards have been on the rise in the country with the Saudi Arabian central bank reporting 363.4 million transactions using NFC-enabled mada cards in February 2024 compared to 331.7 million in February 2023.” 

In terms of card preference, debit cards dominate the overall card payment space, accounting for 85 percent of the overall card payment value in 2023. 

GlobalData pointed out that the government’s financial inclusion initiatives, consumers’ preference for debt-free payments, and prudent consumer spending have resulted in the domination of debit cards in the Kingdom. 

“Saudi consumers are gradually embracing electronic payments, moving away from cash, supported by government push, improvements in payment infrastructure, growing consumer awareness, and rising adoption of newer technology like contactless,” added Sharma. 

In April, data released by the Saudi Central Bank revealed that payments made through point-of-sale terminals in the Kingdom experienced a significant 20 percent annual increase in February, totaling SR53.72 billion. 

The largest portion of POS spending in February was allocated to beverages and food, comprising 15.7 percent or SR8.43 billion. 

This was followed by spending on restaurants and cafes, accounting for 15 percent of the total, reaching SR8.02 billion. 

Topics: SaudiVision2030 cashless payments cashless society Mada PoS

Saudi Arabia, China discuss collaboration in urban development during Beijing meeting

Updated 30 April 2024
ARAB NEWS 
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Saudi Arabia, China discuss collaboration in urban development during Beijing meeting

Updated 30 April 2024
ARAB NEWS 

RIYADH: Saudi Arabia and China stand to gain by sharing expertise in city planning, sustainable urban development, and construction technology as officials from both sides met in Beijing.   

Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail and Chinese Minister of Housing and Urban-Rural Development Ni Hong held discussions to explore cooperation opportunities in developing housing policies and programs for residential communities. 

This move extends from the Chinese President’s visit to the Kingdom in December 2022 and the agreements signed between the two nations during that time. 

Following the meeting in Beijing, Al-Hogail stated in a post on X: “Our leaders have completed an agreement on the importance of strengthening the partnership and aligning Saudi Vision 2030 with the Belt and Road Initiative, which will reflect positively on the aspirations and economic standing of Saudi Arabia and China globally.”  

He added: “We are working to enhance fruitful cooperation between the two countries in various fields including developing urban areas and attracting the best Chinese construction companies to benefit from their expertise in enhancing housing units in various regions of the Kingdom, with the aim of achieving the goals of the housing program — one of the programs of the Kingdom’s Vision 2030 — by providing various housing and financing options for citizens.”  

Furthermore, the two countries reviewed successful experiences in providing housing solutions and options, along with enhancing opportunities for citizens to own homes. They also discussed ways to facilitate the exchange of experiences in urban management and the application of best practices in this regard. 

The meeting was part of an official visit by Al-Hogail to the Chinese capital. During his visit, he is scheduled to meet with senior officials in the Chinese government, heads of construction companies, and banks to strengthen the partnership in the construction sector. The trip also aims to attract top international companies in real estate development. 

Topics: saudi - china Majid Al-Hogail

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