The Timeline of Saudi Arabia’s Startup Investment Ecosystem Development
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 start-ups 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 SVC injecting capital into first-time funds and co-investing in start-ups to de-risk and incentivize investments. Since 2017, the number of local VCs have ballooned, predominantly investing in seed-stage and early-stage start-ups.
Today, there are over 65 VC 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 5 years, since 2017-2018. Those established prior to this, and prior to Vision 2030’s launch in 2016, are considered the trail-blazers, and include players like 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.