Infographic: Saudi Arabia's Startup Investment Ecosystem Development Timeline
Since 2017, the number of local venture capitalists have ballooned, predominantly investing in seed-stage and early-stage startups.
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In its early years, venture capital in Saudi Arabia was just a few prominent family offices that filled funding gaps where institutional banks couldn't provide assistance. However, they mainly invested in traditional sectors such as manufacturing and trading, and tech or software startups had to rely on bootstrapping or funds from friends and family. This is where venture capital comes in, and it's an investment vehicle that has been ballooning in the Kingdom in recent years.
Prior to 2018, there were only a few venture capital firms, but the ecosystem had started to gain momentum with fund of funds like Jada and Saudi Venture Capital (SVC) injecting capital into first-time funds and co-investing in startups to de-risk and incentivize investments. Since 2017, the number of local venture capitalists have ballooned, predominantly investing in seed-stage and early-stage startups.
Image courtesy Lucidity Insights.
Today, there are over 65 venture capital firms, fund of funds, angel groups, incubators and accelerators that are headquartered in Saudi Arabia and who have invested in one startup or another. The vast majority of them, over 90% have been established in the past five years, since 2017-2018. Those established prior to this, and prior to Vision 2030's launch in 2016, are considered the trailblazers, and include BADIR's accelerators, KAUST's Entrepreneurship Centre, Saudi Aramco's Entrepreneurship Centre, OQAL Angel Investor Network, Wa'ed Ventures, Women Spark Angel Investor Network, Vision Ventures, and Ra'ed Ventures.
In the report, The Evolution of Saudi Arabia's Startup Ecosystem 2010-2022, we look at who has supported the most Saudi-based startups, which are in turn, nurturing the larger ecosystem. Wa'ed Ventures ranks the highest with 43 Saudi startups in its portfolio as of October 28, 2022. 500 Global follows with 38 investments, and Impact46 and KAUST Innovations Ventures are tied for third place with 27 Saudi startups in each of their portfolios. All data have been obtained and verified from the venture capitalists themselves, and are up to the end of October 2022.
Learn more about the most prominent venture capitalists in Saudi's startup ecosystem by checking out the report, The Evolution of Saudi Arabia's Startup Ecosystem 2010-2022.
This article was originally published on Lucidity Insights, a partner of Entrepreneur Middle East in developing special reports on the Middle East and Africa's tech and entrepreneurial ecosystems.