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Venture Capital Investments Climb 65% in Saudi Arabia

A leap in investment growth is registered for technology startups in Saudi Arabia in H1 2021 (Asharq Al-Awsat)
A leap in investment growth is registered for technology startups in Saudi Arabia in H1 2021 (Asharq Al-Awsat)
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Venture Capital Investments Climb 65% in Saudi Arabia

A leap in investment growth is registered for technology startups in Saudi Arabia in H1 2021 (Asharq Al-Awsat)
A leap in investment growth is registered for technology startups in Saudi Arabia in H1 2021 (Asharq Al-Awsat)

Investments worth SAR 630 million ($168 million) have been channeled to Saudi startups in H1 2021, achieving a whopping 65% growth rate compared to the same period last year, a venture capital investment report revealed.

In its H1 2021 Saudi Arabia Venture Capital report, compiled in co-operation with Saudi Venture Capital Company (SVCC), the data platform “Magnitt” explained that even though 2020 was a positive year for daring investments in the Kingdom, 2021 was the year to show record-breaking investment flows into Saudi startups.

The $168 million pumped into Saudi startups in H1 2021 accounted for about 94% of the money extended to the Kingdom’s startups in 2020.

Saudi Arabia surpassed Egypt to be ranked second by share of total Middle East and North Africa (MENA) funding, while accounting for 21% of the region’s venture capital transactions.

Moreover, the Kingdom accounted for 14% of venture capital funding invested in MENA startups in H1 2021, according to Magnitt.

Fintech startups raised 1700% more capital YoY. Together, FinTech and food and beverage startups accounted for 44% of the capital invested in Saudi Arabia in the first half.

About 75% of investors that backed startups in Saudi Arabia in the first half were based within the country, the report said.

Governor of Saudi Arabia’s General Authority for Small and Medium Enterprises (Monshaat) Saleh Alrasheed confirmed the Authority’s interest in offering services, programs, and supporting initiatives to entrepreneurs.

The Authority does so to build SME market competition and boost growth. Invigorating financing for SMEs is also an objective of Monshaat’s policies.

Alrasheed added that the establishment of the SVCC in 2018 had significantly and directly contributed to developing Saudi Arabia’s venture capital investment landscape.

SVCC is a government company established by Monshaat within the Financial Sector Development Program. The company aims to develop a venture capital system by investing 2.8 billion riyals ($750 million).

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Egypt, IMF Hold New Discussions to Alleviate Citizens’ Financial Burdens

Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)
Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)
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Egypt, IMF Hold New Discussions to Alleviate Citizens’ Financial Burdens

Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)
Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)

Egypt and the International Monetary Fund (IMF) have agreed to review their joint credit facilitation program to ensure that no additional burdens are placed on citizens.

Egyptian Prime Minister Mostafa Madbouly reiterated the government’s commitment to “maintaining a flexible exchange rate in coordination with the central bank to safeguard the progress achieved in this area.” He expressed hope that the meetings with the IMF delegation in the coming days would “conclude the fourth review of the economic reform program.”

Following a meeting on Sunday between President Abdel Fattah al-Sisi and IMF Managing Director Kristalina Georgieva in Cairo, the Egyptian Presidency announced that Georgieva expressed her “full understanding of the significant challenges Egypt faces amid regional and global developments.”

In March, Egypt signed an $8 billion extended financial support package with the IMF, which requires reducing subsidies on fuel, electricity, and essential goods and allowing the Egyptian pound to float.

In late October, Sisi warned that his government might need to reassess its program with the IMF if international institutions do not account for the extraordinary regional challenges the country is facing. He cited a nearly 60% drop in Suez Canal revenue due to security tensions in the Red Sea as an example.

During the meeting with Georgieva, Sisi expressed Egypt’s commitment to continuing its cooperation with the IMF, building on progress to boost economic stability and reduce inflation. However, he stressed the need to acknowledge recent challenges Egypt has faced due to regional and international crises, which have impacted foreign currency reserves and budget revenues.

Sisi reiterated that the government’s primary focus is on alleviating pressures on citizens, particularly by controlling inflation and curbing rising prices, while also continuing efforts to attract investments and empower the private sector to drive employment and growth.

Georgieva, in turn, commended Egypt’s recent efforts and the reform program being “carefully implemented with a focus on the most vulnerable.” She highlighted the progress in macroeconomic indicators despite unprecedented current challenges, noting that this has been reflected in positive assessments from international credit rating agencies, improved credit ratings, and increased investments.

She expressed her “full understanding of the significant challenges Egypt faces amid regional and global developments” and emphasized the IMF’s commitment to working with the Egyptian government to identify optimal reform paths.