Saudi fintech investment jumps as regulators set 2021 landscape: Year in Review

Saudi fintech investment jumps as regulators set 2021 landscape: Year in Review
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Updated 09 January 2022

Saudi fintech investment jumps as regulators set 2021 landscape: Year in Review

Saudi fintech investment jumps as regulators set 2021 landscape: Year in Review
  • Kingdom witnesses 37 percent rise in fintech companies as compared to 2020

RIYADH: Saudi Arabia saw a significant jump in venture capital investments in the financial technology sector, hitting 16 deals in the first eight months of 2021 totaling $157.2 million.

This compares with 2020, when seven venture capital deals were signed worth $7.8 million as pandemic restrictions curtailed activity, according to the annual Saudi Fintech annual report.

This year has also seen backing spread across a range of early-stage projects, with 46 percent at series A and B stages, 38 percent at the seed stage, and 15 percent at pre-seed levels.

Pre-seed funding is the earliest stage of investment, often from founders, family and close supporters. This is followed by more formal seed and series stages, where equity in the business is traded.

This spread of investment demonstrates that backing is available to support fintech companies at key stages of their development.

HIGHLIGHTS

This year has seen backing spread across a range of early- stage projects, with 46 percent at series A and B stages, 38 percent at the seed stage, and 15 percent at pre-seed levels.

Pre-seed funding is the earliest stage of investment, often from founders, family and close supporters.

This is followed by more formal seed and series stages, where equity in the business is traded.

This spread of investment demonstrates that backing is available to support fintech companies at key stages of their development.

There has been an increase in the level of early seed-stage and pre seed stage investment, in particular.

There has been an increase in the level of early seed-stage and pre-seed stage investment, in particular.

So far in 2021, investors have signed deals worth $12.9 million at seed and pre-seed stage investment, a 108 percent jump from $6.2 million invested in 2020.

The payments sector remains the most attractive fintech area in the Kingdom, so far accounting for around 93% of total venture capital investments this year.

Highlights include series A investments in mobile payments platform Hala $6.5 million and buy-now-pay-later business Tamara $110 million. While restaurant point-of-sale provider Foodics attracted $20 million of series B funding.

Despite growing levels of fintech investment in the Kingdom, the median deal size in Saudi Arabia is $2.7 million compared to a global median deal size of $7.3 million.




The number of financial technology companies in Saudi Arabia continues to grow, as the number of companies increased this year to 82. (Shutterstock)

The launch of Open Banking in Saudi Arabia in 2022, which allows firms to share consumer current account data once permission has been given, is also expected to speed up the pace of fintech development.

Experts expect this move will provide existing fintech investors with more opportunities, and will attract funds to the sector.

The number of financial technology companies in Saudi Arabia continues to grow, as the number of companies increased this year to 82, a 37 percent rise on the previous year.

 

Commitment to Vision 2030

The move by the Kingdom’s central bank, SAMA, to Open Banking is set to support the further development of the sector, in line with Saudi Vision 2030 and the Financial Sector Development Program, launched in 2017.

The plan includes developing the digital economy, and allowing financial intermediaries to support private sector growth by opening up the financial services industry to new players. It also encourages the building of an advanced capital market in the Kingdom.


Global business leaders gather as the Top CEO forum kicks off in Dubai 

Global business leaders gather as the Top CEO forum kicks off in Dubai 
Updated 14 sec ago

Global business leaders gather as the Top CEO forum kicks off in Dubai 

Global business leaders gather as the Top CEO forum kicks off in Dubai 

DUBAI: Business leaders from across the world gather as the Top CEO forum kicks off in Dubai, after a successful day one that saw leading Arab businesswomen and industry stalwarts discuss business and challenges and the role of women in driving the global economy.   

Today’s event is set to be dominated by a wide-ranging topic, right from how the businesses should go about beating inflation post-pandemic, deal with their initial public offering plans, and raising capital to how the special purpose acquisition companies operate in this changing environment. The other topics to lead the discussion today include digitization, blockchain and metaverse. 


Bank of England official warns of tough times for crypto

Bank of England official warns of tough times for crypto
Updated 17 May 2022

Bank of England official warns of tough times for crypto

Bank of England official warns of tough times for crypto
  • G7 to discuss crypto-asset regulation, says French central banker

RIYADH: Investors in crypto currencies should expect more difficult times ahead as tightening financial conditions around the world stoke appetite for safer assets, Bank of England Deputy Gov. Jon Cunliffe said on Tuesday.

Asked at a Wall Street Journal conference if rising interest rates would ramp up pressure on crypto currencies, Cunliffe said: “Yes, I think as this process continues, as (quantitative tightening) starts in the US ... I think we’ll see a move out of risky assets.” Cunliffe added that the conflict in Ukraine also had the potential to cause a renewed flight to safer assets.

Bitcoin, the world’s largest cryptocurrency, fell as low as $25,401 on Thursday, its lowest since Dec. 2020. It hit a record high of $69,000 in November. 

However, it traded higher on Tuesday, up 0.2 percent to $30,418 as of 08:52 a.m. Riyadh time.

Ether, the second most traded cryptocurrency, was priced at $2,077, up 0.32 percent, according to data from CoinDesk.

G7 meeting

The regulation of crypto-assets is likely to be discussed at a meeting of Group of Seven finance chiefs this week in Germany, French central bank head Francois Villeroy de Galhau said on Tuesday.

“What happened in the recent past is a wake-up call for the urgent need for global regulation,” Villeroy told an emerging markets conference in Paris, referring to recent turbulence in crypto-asset markets.

“Europe paved the way with MICA (regulatory framework for crypto-assets), we will probably ... discuss these issues among many others at the G7 meeting in Germany this week,” he added.

Grayscale to launch digital assets

Grayscale will list an exchange-traded fund in Europe made up of companies representing the “Future of Finance,” the world’s largest cryptocurrency asset manager said in a statement on Monday. 

The ETF, tracking the “Bloomberg Grayscale Future of Finance Index,” will be listed on the London Stock Exchange, Italy’s Borsa Italiana and Germany’s Deutsche Börse Xetra and begin trading on May 17. It is the first time that US-based Grayscale has listed a fund in Europe.

The index contains a mixture of companies involved in digital currencies including asset managers, exchanges, brokers, technology firms, as well as firms directly involved in cryptocurrency mining. “For us, the digital economy is primarily being driven through the proliferation of digital assets,” said Grayscale CEO Michael Sonnenshein.


Digital transformation, women participation are the need of the hour, says VP Visa CEMEA

Digital transformation, women participation are the need of the hour, says VP Visa CEMEA
Updated 18 May 2022

Digital transformation, women participation are the need of the hour, says VP Visa CEMEA

Digital transformation, women participation are the need of the hour, says VP Visa CEMEA

RIYADH: In a post-pandemic world, digital transformation has been one of the main changes for companies and economies as a whole.

In an exclusive interview with Arab News on the sidelines of the Arab Women Forum in Dubai, Visa CEMEA Vice President of Marketing Christine Harb emphasized the need for digital transformation and women’s representation.

“I believe that digital transformation is done in multiple phases. There are pretty traditional organizations in the way they operate and are trying to move into a more agile space,” she said.

Harb added: “When you look at how digital is transforming the world and the metaverse impacting on organizations, there is a need to rethink how people collaborate and engage. So it’s not just about making sure that you have the right tools or enabling employees and people to connect.”

She explained that the shift is not only in digitizing the economy but also in how women’s representation has been a focus for organizations and educational spheres.

“Now, we are already equipped. So maybe we are on the right track. But, still, a lot needs to be done, mainly around policies and regulations that would protect women and open new doors to them, when it comes to, you know, bigger roles, but also allowing them to be their authentic selves,” she concluded.


Commercial Bank of Kuwait plans to digitize, says CEO

Commercial Bank of Kuwait plans to digitize, says CEO
Updated 18 May 2022

Commercial Bank of Kuwait plans to digitize, says CEO

Commercial Bank of Kuwait plans to digitize, says CEO

DUBAI: Elham Mahfouz, the chief executive officer of the Commercial Bank of Kuwait, said that robots will play a major role in the future, with 85 million jobs expected to be taken over in the next two to three years.

Speaking to Arab News at the Arab Women Forum, Mahfouz said that the bank’s next plan is digitization and that, in the next two to three years, the look of banks will be different.

CBK is the only bank to have SwatchPAY, which is a smart-watch payment service, she informed.

Beginning her journey in banking around 35 years ago, Mahfouz climbed up the ladder after starting as a credit analyst. She has been the CEO of the bank for the last eight years, she informed.

“Being in a high position can favor the institution if you want to implement certain kinds of dreams that you have to get the institution in a certain way and pave the way with the team,” she added.

Mahfouz told Arab News that one of the things that stood out to her as a woman working in the banking sector was getting more support from males than females.

Self-development, focus, and patience are factors that have influenced her journey to reaching the top post, Mahfouz said.

She added that the following generations are tech-savvy and are very smart when it comes to technological advances. However, Mahfouz said they have to have patience and read more.


Women should not relinquish their rights in business, says Suzy Kanoo

Women should not relinquish their rights in business, says Suzy Kanoo
Updated 18 May 2022

Women should not relinquish their rights in business, says Suzy Kanoo

Women should not relinquish their rights in business, says Suzy Kanoo

DUBAI: When it comes to taking a huge step like running a family business, most entrepreneurs would flinch, especially in a male-dominated industry. Female successors would instead pass their rights to a male than take the path of leadership.

In an exclusive interview with Arab News, the CEO and president of Khalil bin Ebrahim Kanoo Co. and International Motor Trading Agency, Suzy Kanoo, shared her advice on what women should do when put in that position, and it’s not relinquishing their rights.

Speaking on the sidelines of the Arab Women Forum event in Dubai, Kanoo, who has also authored “Hear Us Speak: Letters from Arab Women,” expressed that one of the main obstacles women face in the business world is not believing in themselves.

“The Japanese call it Ikigai. Find a purpose and passion, do it well, and make sure it benefits society. Whatever it is, anything that you think is insignificant isn’t insignificant for that individual. So, find that purpose and do it well,” she added.

Kanoo has been the voice of the Arab world, and her book discusses real-life stories about Arab women that have experienced physical or emotional abuse but outlived their circumstances.

“My book emphasizes that never let a male, whether a cousin or a brother, force you or coerce you into signing documents asking you to relinquish your rights of the family business,” she said.

Her book brought to light the circumstances of the marginalized women who succumbed to male domination and gave away what was rightfully theirs.

However, Kanoo feels those were different times. She finds Gen Z is the most empowered generation. They believe that nothing should stop them from achieving their goals. In addition, they understand technology better than the previous generations.

But the struggle is not over. Even emancipated women have to fight on multiple fronts. An accomplished writer and businesswoman, Kanoo is currently facing problems with the automotive business. Her production declined by 50-60 percent.

Does that mean she is letting off the reins? No chance. The feisty lady is expanding into different sectors, opening a restaurant from personal investments and launching an advisory company for blockchain technology.