Magnitt – Saudi Arabia Venture Report, FY 2023

The Kingdom of Saudi Arabia has seen a significant increase in venture capital activity, with capital deployed reaching a record-breaking aggregate of M$1,383 in 2022. This represents a 33% increase compared to the previous year and is expected to continue growing by 52% in 2023. Despite a 20% reduction in the number of deals, Saudi Arabia has ranked second in the MENA region in terms of the total number of transactions, surpassing other countries. The size of average deals in 2023 has also increased by 22% compared to the previous year, accounting for 26% of the total deals in MENA. Notably, mega-deals of over M$100 have captured 77% of all mega-deals in MENA, with startups like Floward, Tabby, and Tamara in the retail/commerce and BNPL sectors leading the way. The Kingdom of Saudi Arabia has emerged as the top industry choice for investors, particularly in the Fintech sector, amassing M$704 in deployed capital and 30 deals in 2023. The retail/commerce sector also saw rising interest and secured the second spot in terms of funding and deals. However, the gap in funding between Saudi Arabia and its peers in MENA has been growing. In terms of investor activity, there has been a decrease in the number of investors from the Kingdom of Saudi Arabia, with a 30% YoY decrease in comparison to the MENA region. Around 56% of investors in the region are from Saudi Arabia. However, the Kingdom of Saudi Arabia remains relatively stable in terms of exit activity, with 10 transactions in 2023. The UAE leads the region in exit activity. Overall, the Kingdom of Saudi Arabia is experiencing significant growth in the venture capital ecosystem, with increased capital deployment and investment in various sectors.