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Saudi Arabia Tops MENA Venture Capital Rankings for 2023

King Abdullah Financial Center in the capital, Riyadh (SPA)
King Abdullah Financial Center in the capital, Riyadh (SPA)
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Saudi Arabia Tops MENA Venture Capital Rankings for 2023

King Abdullah Financial Center in the capital, Riyadh (SPA)
King Abdullah Financial Center in the capital, Riyadh (SPA)

Saudi Arabia achieved first rank across MENA for the first time regarding the amount of Venture Capital (VC) funding in 2023, according to MAGNiTT, the MENA-based venture data platform.
The data confirmed that the Kingdom captured the highest share of total VC funding in the MENA region in 2023, accounting for 52% of the total capital deployed, up from 31% in 2022.
The funding deployed to Saudi Arabian startups grew by 33% in 2023 compared to 2022, confirming the attractiveness of the Saudi market, enhancing its competitive environment, and consolidating the strength of its economy as the largest in the MENA region.
CEO and Board Member at Saudi Venture Capital (SVC) Nabeel Koshak stated that the Kingdom's ascent in the regional VC landscape directly results from various government initiatives aimed at energizing the VC and startup ecosystem, part of Vision 2030 programs.
Koshak explained that the rise is further supported by enhancing the legislative and regulatory environment for the ecosystem, coupled with the emergence of dynamic investors from the private sector and innovative entrepreneurs.
He added that SVC plays a strategic role in advancing the VC ecosystem in the Kingdom, which has risen from being ranked fourth in the region for VC funding in 2018 to the top position in 2023.
The investment in Saudi startups has grown 21-fold in 2023 compared to 2018, the year SVC was established.
At SVC, "we remain committed to spearheading the evolution of the VC ecosystem in Saudi Arabia by encouraging private investors to support startups and SMEs, facilitating rapid and substantial growth," said Koshak.
He noted that the approach is integral to diversifying the national economy and realizing the objectives of Saudi Vision 2030.
SVC, established in 2018, is an investment company and an SME Bank subsidiary affiliated with the National Development Fund.
SVC's mission is to foster and sustain financing for startups and SMEs, from pre-seed to pre-IPO stages, through investments in funds and co-investment in startups and SMEs.

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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.