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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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Saudi PIF Buys Istidamah Holding’s Stake in MBC for $2 Billion

Photo taken during MBC Group's opening of its new headquarters in Riyadh (SPA)
Photo taken during MBC Group's opening of its new headquarters in Riyadh (SPA)
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Saudi PIF Buys Istidamah Holding’s Stake in MBC for $2 Billion

Photo taken during MBC Group's opening of its new headquarters in Riyadh (SPA)
Photo taken during MBC Group's opening of its new headquarters in Riyadh (SPA)

The Saudi media group MBC has announced that Istidamah Holding, one of its shareholders, signed an agreement to sell its 54% stake to the Public Investment Fund (PIF) for around $1 billion (SAR 7.5 billion). This has pushed MBC’s share price up by the maximum limit of 10% in Sunday’s trading.
According to the terms of the sale and purchase agreement, disclosed by MBC to the Saudi Stock Exchange (Tadawul) on Sunday, Istidamah Holding, owned by the Ministry of Finance, will transfer its entire stake in MBC to PIF, positioning PIF as the controlling shareholder of the company.
MBC reported that the private transaction values each share at SAR 41.6 ($11.1), involving the sale of 179.55 million shares. The deal is expected to close following regulatory approvals.
MBC shares rose to the maximum limit of 10%, reaching SAR 45.75 after the announcement.
In his comments on the deal, the Senior Head of Asset Management at Arbah Capital, Mohammad Farraj, told Asharq Al-Awsat that the acquisition of a significant stake in MBC by the Saudi Public Investment Fund marks a milestone in the history of media and entertainment in the region.
He explained that this strategic move reflects increased confidence in the sector’s ability to achieve sustainable growth and underscores the government’s commitment to supporting and developing this vital economic engine.
In the long term, Farraj said he expects MBC’s stock to achieve sustainable growth for several reasons, including government support, as MBC will benefit from substantial government backing through PIF, enabling it to pursue ambitious projects and expand its operations.
In addition, MBC plans to focus on producing high-quality content to meet diverse audience needs, which will enhance its popularity and attract more advertisers, he remarked.
Farraj pointed out that the company aims to broaden its reach into new markets outside Saudi Arabia, increasing revenues and reinforcing its position as a global brand.
The analyst also suggested that PIF’s acquisition of MBC could attract further local and foreign investments into the sector, bolstering its competitiveness and innovation.
“A new generation of innovative products and services, such as digital platforms and specialized apps, will enhance user experiences and open new growth avenues,” he said.
MBC was the first new listing on the Tadawul index in 2024, following its initial public offering (IPO) of 10% of its shares at the end of the previous year, raising $222 million. The group offered 33.25 million common shares, representing 10% of its capital, at an IPO price of SAR 25 per share.
MBC Group’s profits rose by 66.5% year-on-year in the second quarter of the current year, reaching $31 million (SAR 116.4 million) in net income, despite an 11.6% drop in revenue, which fell to $256.8 million (SAR 963.9 million).