Saudi Arabia dominates startup investment sector during May

Saudi Arabia dominates startup investment sector during May
Around $110 million was raised across 35 deals over the month, according to data from entrepreneurship platform Wamda. (Shutterstock)
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Updated 09 June 2021

Saudi Arabia dominates startup investment sector during May

Saudi Arabia dominates startup investment sector during May
  • Deal making in Saudi Arabia picks up as impact of COVID-19 pandemic subsides

RIYADH: Saudi Arabia dominated the startup investment market in the Middle East and North Africa (MENA) region during May, figures have revealed.

Around $110 million was raised across 35 deals over the month, according to data from entrepreneurship platform Wamda.

And the majority came from Saudi Arabia where nine startups raised $46.6 million, most through the $30.5 million Series B funding by Sary, a business-to-business (B2B) marketplace that connects small firms and wholesalers.

Wassim Basrawi, the managing director of Wa’ed, the entrepreneurship arm of Saudi Aramco, told Arab News: “It is not surprising that venture capital deal making is picking up in the Saudi market. We’ve been observing that now for months as the Kingdom emerges from (the coronavirus disease) COVID-19 pandemic.”

So far, during the second quarter of this year, Wa’ed has announced venture capital investments in Saudi firms such as blockchain artificial intelligence company IR4LAB, drone maker FalconViz, and hydroponic technology business Red Sea Farms. 

“Public sector support for Saudi entrepreneurs has actually increased during the pandemic, and many Saudi startups, like Red Sea Farms, are starting to also attract international investors,” Basrawi added.

The B2B e-commerce sector generated the most interest, raising $37.6 million throughout the MENA region. Second-most popular among investors was financial technology (fintech) with $18.5 million, while logistics raised $10 million, education technology $6.9 million, and tourism $6 million.

Hussain Al-Alawi, international partner and member of the global advisory board at Zurich-headquartered mergers and acquisitions firm Millenium Associates, told Arab News: “Saudi Arabia’s dominance in raising capital for startups comes as no surprise.

“What we’re seeing in the region and globally is that investment – especially from VCs (venture capitalists) – is being led by technology companies, with fintech, med-tech and agri-tech being particularly in-demand.”

He said the technology sector had been the driving force for around 70 percent of the company’s deals this year across all markets, with this also being true in Saudi Arabia.

“Saudi Arabia’s commitment to technology is clear and being led from the very top which is helping to drive both tech startup culture, and investment in the sector.

It is not surprising that venture capital deal making is picking up in the Saudi market. We’ve been observing that now for months as the Kingdom emerges from (the coronavirus disease) COVID-19 pandemic.

Wassim Basrawi, Managing director of Wa’ed

“Projects like NEOM and the great work being done by the Public Investment Fund to help realize Vision 2030, act as a spur to startups looking to disrupt and innovate, with backing from progressive funds supporting local entrepreneurs as well as individuals and institutions.

“The Kingdom’s young and highly connected population, as well as the evolution of the sector driven by the COVID-19 pandemic, are also driving both opportunity and investment,” Al-Alawi added.

Saudi Arabia was also the source of the month’s only investment in a female-led startup, the $6 million backing for Gathern, a Saudi platform similar to Airbnb. This compared to more than $100 million invested in male-led startups throughout the MENA region.

“This is not just a regional issue – it’s global. Women-led startups received just 2.6 percent of VC funding in 2019, according to Crunchbase, despite typically outperforming their male counterparts.

“But I do believe that this is changing. We’re already seeing a significant increase in women-led businesses including startups. In successful family businesses, and especially in e-commerce, we’re seeing females establishing their own companies, but many of these are self-funded or family-funded rather than seeking VC investment,” Al-Alawi said.

He added that a number of his clients in Saudi Arabia were female entrepreneurs from family offices who were starting to look beyond their own businesses and at potential investment opportunities in female-led startups.


Easing restrictions drive Middle East’s post-pandemic rebound, says ICAEW

Easing restrictions drive Middle East’s post-pandemic rebound, says ICAEW
Updated 17 min 28 sec ago

Easing restrictions drive Middle East’s post-pandemic rebound, says ICAEW

Easing restrictions drive Middle East’s post-pandemic rebound, says ICAEW
  • The report reveals that business confidence in the region has strengthened in recent months

DUBAI: The Middle East’s regional GDP will grow by 2.4 percent this year according to a report commissioned by the Institute of Chartered Accountants in England and Wales (ICEAW).
It represents a similar rate to the region’s average growth trajectory in the last decade, as countries double down on their pandemic exit strategies.
The report reveals that business confidence in the region has strengthened in recent months on the back of eased COVID-19-related restrictions and an energetic vaccine campaign.
Strong Purchasing Managers’ Index (PMI) readings indicate a positive outlook throughout the year, the report said.
This shows a marked improvement from the 4.4 percent economic contraction felt across the region last year.
The region can particularly benefit from the expected surge of travel demand once the rest of the world opens up, the report noted, with major global events set to happen in Dubai and Qatar.
“The outlook for most Middle Eastern economies looks positive this quarter, but keeping coronavirus levels low will be essential to ensure economies can return to growth,” the company’s regional director, Michael Armstrong, said.
He highlighted the need to continue diversification strategies to reduce reliance in the oil industry, which has seen gradual recovery from its performance in 2020.
“The rise in the oil price has boosted revenue prospects for GCC producers,” ICAEW Economic Adviser Scott Livermore, said.
“Higher oil revenue gives governments more scope to support post-pandemic recoveries without undermining efforts aimed at improving medium-term fiscal sustainability,” he added.


Quebec-based Robotel to add Arabic curriculum in its offering

Quebec-based Robotel to add Arabic curriculum in its offering
Updated 13 June 2021

Quebec-based Robotel to add Arabic curriculum in its offering

Quebec-based Robotel to add Arabic curriculum in its offering
  • The Quebec-based company said it would partner with Nexus Learn Arabic to develop the course
  • The pair want to finish the curriculum by 2022

DUBAI: Canadian education technology company Robotel is teaming up with a UK-based startup to develop an extensive Arabic language digital curriculum.
The Quebec-based company said it would partner with Nexus Learn Arabic to develop the course, as it expands its offerings to its client schools.
“We feel it is important to help bridge the cultural gap between North America, Europe and the Arabic culture, of which the language is a rich testimonial,” Yanick Demers, the company’s CEO said in a statement.
He added Robotel’s client schools have been asking for an Arabic curriculum. The company currently offers curricula in English, German, and Spanish.
The aim is to create a curriculum that will be the “go to” for schools in Europe, Middle East, Asia, and North America, Nexus Learn Arabic CEO Jamal Al-Tamimi said.
“We are currently entertaining opportunities for financing and strategic partnerships to help us achieve the goal of bringing best-in-class Arabic curriculum to schools,” he added.
The pair want to finish the curriculum by 2022.


Dammam smart parking to generate cash for Batic in second half as $320 project takes off

Dammam smart parking to generate cash for Batic in second half as $320 project takes off
Updated 13 June 2021

Dammam smart parking to generate cash for Batic in second half as $320 project takes off

Dammam smart parking to generate cash for Batic in second half as $320 project takes off
  • It follows a deal struck in 2019 and worth SR1.2 billion ($320 million) to develop and operate smart car parks in Dammam, Dhahran and Al Khobar

RIYADH: Batic Investment and Logistics Company said that its smart parking project in Dammam would start generating revenue from July 1.
It follows a deal struck in 2019 and worth SR1.2 billion ($320 million) to develop and operate smart car parks in Dammam, Dhahran and Al Khobar for 25 years.
It is part of a broader push to develop so-called smart cities in the Kingdom with major investments being channeled into technology aimed at improving the efficiency of municipal services.

 


Dur Hospitality and Taiba Investments mull merger

Dur Hospitality and Taiba Investments mull merger
Updated 13 June 2021

Dur Hospitality and Taiba Investments mull merger

Dur Hospitality and Taiba Investments mull merger
  • It comes amid a wave of merger and acquisition activity in the Kingdom and wider Gulf region as corporations reposition themselves in the post-pandemic world

RIYADH: Dur Hospitality and Taiba Investments said they would start preliminary discussions about a possible merger.

The pair made the disclosure in separate statements to the Saudi stock exchange on Sunday.
It comes amid a wave of merger and acquisition activity in the Kingdom and wider Gulf region as corporations reposition themselves in the post-pandemic world.
Dur develops, owns and manages hotels, restaurants, recreational centers and travel agencies. It also provides services to Umrah pilgrims, in addition to developing residential, hotel and commercial buildings, Argaam reported.
Its major shareholders include Assila Investments Co. with 27.14 percent, the Public Investment Fund (PIF) with 16.62 percent, and Mohamed Ibrahim Mohamed Al Issa with 12 percent, the financial website said.
Meanwhile Taiba is active in real estate, architectural and electrical contracting, maintenance and operation, agricultural, industrial and mining activities.
Its major shareholders include Asilah Investment Co. with 16.73 percent, Mohamed Saleh Hamza Serafy (15.55 percent), and Mohamed Ibrahim Mohamed Al Issa (7.41 percent), Argaam said.


SRMG unit inks 3-year media services contract worth $53.3m

SRMG unit inks 3-year media services contract worth $53.3m
Updated 13 June 2021

SRMG unit inks 3-year media services contract worth $53.3m

SRMG unit inks 3-year media services contract worth $53.3m
  • Under the contract, Taoq will provide media services, produce multilingual content, and provide consulting services

DUBAI: Taoq International Public Relations, a unit of the Saudi Research and Media Group (SRMG), has signed a three-year contract with an annual value of SR200 million ($53.3 million).
Under the contract, Taoq will provide media services, produce multilingual content, and provide consulting services, SRMG announced in a bourse filing.
The financial impact of the deal, signed with an unnamed commercial company in the media industry, is expected to appear in Q2 statements this year.