Saudi Arabia has reported a 42 percent leap in investment with venture capital in emerging projects during Q1 2020, experts in sector revealed.
They attributed this activity to investors taking advantage of the unstable conditions caused by the coronavirus to close more deals.
Chairman of Nama Al Baraka Holding Rayan Qutub said the Kingdom’s market ranks third after the United Arab Emirates and Egypt.
She made her remarks at a virtual meeting, attended by Asharq Al-Awsat, on “The Future of Investing in Technology.”
Qutub said Saudi Arabia has closed deals worth SAR251 million ($67 million), representing 92 percent growth in 2019, while it recorded a 35 percent increase in 2018.
It reported 41 investors in 2019, who invested in various sectors, mainly e-commerce, delivery, transportation and education, according to Qutub.
He pointed out that there is a prominent contribution to business accelerators, foremost of which was Misk500, Seedstars, Vision Ventures and Startups 500. While the most prominent investors were Oqal Group, Saudi Venture Capital Company (SVC), Derayah Financial Company and Saudi Aramco.
CEO of SVC Nabeel Koshak highlighted three factors that have led to the steady growth in the Kingdom’s venture capital market over the past three years.
The first is the Kingdom's Vision 2030, which encourages startups, small and medium-sized enterprises and entrepreneurship.
“There is an acceleration in support and motivation activities and the development of government systems such as the e-commerce system, bankruptcy system and others, as well as incentive programs, such as the Venture Capital Fund and the Public Investment Fund initiative,” he noted.
According to Koshak, the pandemic has accelerated the use of technology, including e-government.
He pointed out that the Saudi Arabian Monetary Authority (SAMA) has licensed eight emerging financial technology companies during the current crisis to find loan and investment solutions and debt instruments to contribute to finding solutions for companies.
One of the advantages of the pandemic, he stressed, is helping correct the venture capital sector in regards to corporate assessment, inflation and exaggeration in financial estimates.
