Saudi Arabia’s venture capital market: successes and prospects
Saudi Technology Ventures, a reputable foundation, presented a report on Saudi Arabia’s development and made a forecast for various segments. According to experts, in the next 6 years the market of venture investments in the country will grow by 10 times. Now investments in this direction are considered to be promising and are actively developing. As experts expect, by 2025 venture financing with $50 million will reach $500 million.
But according to representatives of the STV venture fund, in the future total investments in Saudi Arabia will amount to $2 billion, of which $350 million will be invested in the company at an early stage, and the rest of the finances will be directed to enterprises at various stages of their development. Saudi Technology Ventures is a major institution that operates in the Middle East and North America market. The fund has a capitalization of $500 million and is investing $100 million each in six separate projects.
Such prospects for Saudi Arabia’s venture capital market are primarily due to its stable economic position. The country is interested in the world market with its technological products. In addition, the number of incubators and powerful companies of IT-segment is increasing every year.
The Saudi Misk Foundation fully supports startups. Together with the Silicon Valley venture capital company, it has provided funding for 20 start-ups from the Middle East and North America region. Each of them invests about 50 thousand dollars, for which the startups will give 7% of their shares.
The selected companies operate in various fields, including e-commerce, artificial intelligence development, financial products and robotics.
The Misk Foundation is a charity foundation owned by the Crown Prince of the Kingdom. Its main purpose is to support innovative projects, train young people and help promising startups. Thanks to support from the government, Saudi Arabia’s venture capital market is growing rapidly. A favorable business climate has been formed here, as evidenced by the huge number of new companies.
At the same time, the volume of venture capital investments in GDP is still insignificant, which means that there is room for development. However, this has not prevented Saudi Arabia from earning the status of the fastest growing market for venture capital investment in its region. The amount of financing for the year has increased by 82% compared to the previous period. A total of about $40 million was invested in start-ups that are registered in the kingdom, which is the third highest after the amount of funding in the UAE and Egypt. The government hopes that the adopted policy of encouraging business and venture investments will yield good results and strengthen the economy.