The fourth panel at the Investment Conference 2024 hosted by Kamco Invest and @BurganBankChannel. The panel was moderated by Dalal Al-Shaya, Senior Vice President, Alternative Investments at Kamco Invest, and panelists included Mohammed Jaffar, Managing Partner of Faith Capital, Omar Almajdouie, Founding Partner of Raed Ventures, and Nora Alsarhan, Chief Investment Officer of Saudi Venture Capital Company (SVC).

Dalal Al Shaye shared the extensive knowledge the Company has built and the trend of the sector by tracking the startup ecosystem in the MENA region since 2017. Great ideas were backed by great founders and investors in the early stages. The challenges back then were mainly the lack of capital at the growth and late stages to help the companies scale and grow, while having multiple exit opportunities for venture capital investors.

Government support, regulatory changes, and the presence of many regional and global venture capital funds have fostered a favorable environment for the growth of startups during the last decade. In 2015, the number of VC deals was 204, with ventures raising USD 291 million out of these deals, while during the year 2023, the MENA startups raised over USD 2.67 billion through 477 deals, according to venture data research firm MAGNiTT.

Nora Alsarhan said, “Witnessing the rise of both visionary founders and astute venture capital investors in the MENA region has been truly remarkable. Their collective ambition and innovation highlight the depth of talent we have in our ecosystem. At SVC, we are dedicated to supporting these trailblazers, the founders who dream big and the fund managers who back those dreams, as they lay the groundwork for a venture capital landscape in the region.”

The panelists agreed that governments have been at the forefront of this transformation, implementing proactive policies and initiatives to foster entrepreneurship and attract capital. The UAE and, more recently, Saudi Arabia have established themselves as regional powerhouses with world-class infrastructure, regulatory frameworks, and incentives for startups and investors alike.

During the last five years, global players have increasingly penetrated the region. We have seen an increasing interest from international investors participating directly in the funding rounds of regional startups, recognizing the potential of the businesses and their expansion in the region.

Mohammed Jaffar said, “Building a startup company or project requires focusing on solving a valuable, yet unsolved problem, while looking at the entire GCC market instead of being limited to the local market only.”

Panelists highlighted the evolution of exit opportunities across the MENA region during the last decade, which have witnessed a shift from the international M&A transactions dominating the exit market. Over the years, we started seeing local acquisitions and consolidations happen as some of the local companies needed to scale and expand. Recently, the local IPO market witnessed successful exits for local businesses both in ADX and Tadawul. Adding to that, several late-stage companies are preparing for listing in the next two to three years with the majority of them focusing on eCommerce, FinTech and Logistics.

Omar Almajdouie said, “Saudi Arabia and the GCC region in general stands at the threshold of a technological revolution, offering a fertile ground for digital transformation across industries. With its strategic investments in innovation and a rapidly evolving startup ecosystem, the region presents unprecedented opportunities for tech entrepreneurs and investors alike. As Saudi Arabia and the GCC countries diversify away from oil, technology and innovation become pivotal in shaping a sustainable, knowledge-based economy.”

@TheEconomistIntelligenceUnit