Startup Wrap: Saudi leads the way in flurry of regional activity in startups ecosystem

Startup Wrap: Saudi leads the way in flurry of regional activity in startups ecosystem
From left: Tamara co-founder & CEO Abdul Majeed Alsukhan ,co-founder & CEO Turki bin Zarah, and co-founder & CpO Abdul Mohsen Al-Babtain. (Reuters)
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Updated 26 March 2023

Startup Wrap: Saudi leads the way in flurry of regional activity in startups ecosystem

Startup Wrap: Saudi leads the way in flurry of regional activity in startups ecosystem
  • Saudi Arabian startups managed to secure large bulks of funding

CAIRO: The Middle East and North Africa region witnessed staggering activity in the startup and venture capital space last week spearheaded by Saudi Arabia. 

The region’s startup ecosystem experienced debt and equity financing with one mega round as well as cross-border investments. 

For its part, Saudi Arabian startups managed to secure a large bulk of funding while UAE-based startups also participated with a fair share.

Tamara secures $150m in debt financing 

Saudi-based fintech giant Tamara raised $150 million in debt financing from global investment banking company Goldman Sachs. 

Founded in 2020, Tamara is one of the region’s leading buy now, pay later providers with over 15,000 partner merchants using their services. 

“Providing excellent products and services to our customers across shopping, payments and banking is at the core of Tamara,” Abdulmajeed Alsukhan, co-founder and CEO of Tamara, said. 




Abdulmajeed Alsukhan, co-founder and CEO of Tamara. (Supplied)

The funding will provide the company with support to finance the demand for its BNPL product and continue its growth across new verticals. 

“The team has shown the ability to scale a complex B2B (business-to-business) and B2C (business-to-consumer) business model, and BNPL is just an initial offering. We see a much deeper demand that we can fulfill with the same technology and customer-first approach,” Alsukhan added. 

Aumet raises $7m to expand AI capabilities 

Saudi Arabia’s healthtech startup Aumet raised $7 million in a pre-series A funding round from Tokyo-based venture capital firm AAIC and Swiss private equity firm AIJ Holdings alongside other investors. 

Established in 2016, Aumet is an artificial intelligence-enabled B2B platform that provides software solutions like an enterprise resource planning system and a marketplace for pharmacies. 

The company also facilitates the exchange of data between healthcare providers, manufacturers and distributors to enable them to make the right decision. 

The platform uses predictive analytics to forecast the procurement of products for pharmacies, resulting in cost savings and other efficiencies in the supply chain of pharmacies. 

The company plans to utilize its funding to further expand its artificial intelligence capabilities, reach more pharmacies, and provide better access to affordable healthcare products. 
Aumet serves more than 10,000 pharmacies across Saudi Arabia, Jordan and Egypt.




Aumet plans to utilize its funding to further expand its AI capabilities. (Supplied)

Saudi Venture Capital launches $80m fintech fund 

The Kingdom’s booming fintech sector is set to get a boost, thanks to an $80 million investment fund launched by Saudi Venture Capital Co. 

The ‘Investment in Fintech VC Fund’ was launched in partnership with Saudi Arabia’s Capital Market Authority and the Financial Sector Development Program to preserve the Kingdom’s fintech industry growth that attracted almost 25 percent of all Saudi venture capital funding last year.  

SVC aims to stimulate and sustain financing for startups and small and medium enterprises from the early stage to initial public offering by backing venture capital and private equity firms all around the region.  

The firm, which has always been keen to empower the startup landscape in the Kingdom, also signed a memorandum of understanding last month with the Saudi stock exchange Tadawul to support small and medium enterprises going public.  

The company will strategically place the new fund to support Saudi Arabia’s fintech ecosystem which raised $239 million in funding in 2022, according to venture data firm MAGNiTT.  

Saudi Arabia’s venture capital market has been one of the most attractive markets globally, capturing $987 million in funding last year, a 72 percent increase from the year before.  

The Kingdom’s 2022 funding boom came as investment across the world decreased by 35 percent year-on-year, while the US venture market experienced a 37 percent drop, according to Crunchbase.  

The UAE and Egypt, which are the region’s leading venture markets, also witnessed a decline in funding activity last year.  

Founded in 2018, SVC is a government investment company under the SME Bank and has invested in 35 funds which financed 525 companies through 904 deals. 

Spate of regional funding rounds 

UAE-based fintech Credable raised $2.5 million in a seed funding round led by Ventures Platform and Egypt-based Acasia Ventures to roll out new products across Tanzania, Uganda and Kenya. 
On the other hand, UAE-based payment solution Qlub raised $25 million in funding co-led by Cherry Ventures and Point Nine with participation from STV, Raed Ventures, Heartcore, Shorooq Partners, FinTech Collective and Al Dhabi Capital.  

In addition, UAE-based edtech almentor raised $10 million in a pre-series C funding round led by e& Capital alongside other Egyptian investors to accelerate the company’s growth and expand into the Kingdom. 

Furthermore, Saudi-based NFT marketplace Nuqtah raised an undisclosed seed funding round led by Animoca Brands with participation from Polygon to scale the business over the next 12 months. 

Also, Bahrain-based proptech Estater raised $5 million in a series A funding round led by undisclosed investors from Saudi Arabia and Bahrain to accelerate product development and boost technology infrastructure. 

Iraq Islamic Bank partnered with MSA Novo to launch a new fund targeting Iraqi startups and lead the digital transformation in the country. 

Abu Dhabi investment firm Group 42 went on to acquire a $100 million stake in TikTok’s owner company ByteDance. 


74% of online shoppers prefer local e-commerce over cross-border platforms

Waleed Al-Saud, CEO of Mukatafa
Waleed Al-Saud, CEO of Mukatafa
Updated 03 June 2023

74% of online shoppers prefer local e-commerce over cross-border platforms

Waleed Al-Saud, CEO of Mukatafa

RIYADH: Saudi Arabia’s retail sector is eyeing significant growth on the back of its e-commerce market, as 74 percent of online shoppers in the Kingdom are expected to shift from global to local platforms.
In its recent report, leading global management consulting firm Kearney and Saudi consulting company Mukatafa noted that local and hybrid players are making strong headway against their international counterparts from China, the Gulf Cooperation Council, Europe and the US.
Valued at SR19.3 billion ($5.14 billion), the Kingdom’s e-commerce market is 6 percent of the overall SR347.2 billion retail market. It is expected to further grow to SR34.7 billion to reach 7.5 percent of the overall retail market by 2026, according to the report.
An expanding e-commerce ecosystem will pave the way for innovation, job creation and private-sector growth in line with the Kingdom’s Vision 2030 objectives.

It is a strong sign that local e-commerce businesses are gaining more traction in the market. We must make sure that these businesses are supported to thrive as well as cross-border accounts.

Waleed Al-Saud, CEO of Mukatafa

“This flourishing e-commerce ecosystem empowers citizens to use innovative digital payment options, in line with government initiatives under Vision 2030 to guide private sector investments to provide critical pillars for the sector’s growth, such as increasing cashless transactions and expanding the geographical coverage of e-commerce delivery beyond the Kingdom’s major cities,” said Mohammed Dhedhi, partner at Kearney Middle East.
He added: “The growth of the local and hybrid e-commerce players will contribute to protecting consumer interest and promoting local investments with strong potential for job creation.” The report revealed that cross-border online shopping is expected to generate less income as local and hybrid companies gain traction.

FASTFACTS

• The report noted that local and hybrid players are making strong headway against their international counterparts from China, the GCC, Europe and the US.

• Valued at SR19.3 billion, the Kingdom’s e-commerce market is 6 percent of the overall SR347.2 billion retail market.

Cross-border online shopping is likely to decrease from 59 percent of all e-commerce revenue in 2021 to 49 percent by 2026.
The report noted that more assistance should be provided to create a level playing field for all e-commerce participants, safeguarding consumer interests and encouraging domestic investment.
“It is a strong sign that local e-commerce businesses are gaining more traction in the market. We must make sure that these businesses are supported to thrive as well as cross-border accounts,” Waleed Al-Saud, CEO of Mukatafa, said. He added: “Thresholds on import quantities could be introduced, and local quality standards could be mandated for cross-border players. It is these types of initiatives that will need to be addressed if we are to create a level playing field for all e-commerce players. As it stands, current regulations in the market favor cross-border players, and until that changes, cross-border sales will continue to hold a major share of the e-commerce market compared to local players.”

 

 


‘Women in Tech’ competition brings Saudi female entrepreneurs to the fore

Doaa Aref, CEO of Chefaa
Doaa Aref, CEO of Chefaa
Updated 03 June 2023

‘Women in Tech’ competition brings Saudi female entrepreneurs to the fore

Doaa Aref, CEO of Chefaa
  • Sahm app claims first place and received $25k, Nqoodlet bags second position with a prize of $15k

CAIRO: Going by the success of the “Women in Tech” competition, it is evident that female-led startups are set to revolutionize Saudi Arabia’s technology sector.  

The competition that was recently held in Riyadh saw entrepreneurs undergo an eight-week incubator program, showcasing innovative ideas in various sectors, including fintech, health tech, property tech and edutainment.
In collaboration between global banking group Standard Chartered and Saudi-based investment firm Falak Investment Hub, the program hosted eight startups with the top three being awarded a total of $50,000 in equity-free grants.   

The most significant shift in our landscape in KSA will be the change in sentiment, investment appetite and innovation, says Adwa Al-Dakheel
CEO of Falak Investment Hub

Sahm, a stock trading app, claimed first place and received $25,000. Nqoodlet, a fintech company, bagged second position with a prize of $15,000, and Chefaa, a health-tech platform, secured third place and received $10,000.  
Speaking with Arab News, Jawaher Al-Yahya, the CEO of Sahm, said that the company will continue to optimize and refine its product to achieve the right market fit.  

HIGHLIGHTS

• The competition that was recently held in Riyadh saw entrepreneurs undergo an eight-week incubator program, showcasing innovative ideas in various sectors, including fintech, health tech, property tech and edutainment.

• In collaboration between global banking group Standard Chartered and Saudi-based investment firm Falak Investment Hub, the program hosted eight startups with the top three being awarded a total of $50,000 in equity-free grants.

She further added that women faced difficulty in gaining experience in leadership positions in addition to a lack of funding and resources.  
Sahm will utilize its funding to invest in marketing initiatives to increase brand awareness as well as enhance product capabilities, Al-Yahya reiterated.  
Replying to a question regarding hurdles women in the technology sector are faced with, CEO of Falak Investment Hub Adwa Al-Dakheel attributed the pursuit of perfection as the major barrier for women entering the tech scene.
“Seeking perfection in innovation and startups means not launching in the right market timing and waiting for extreme validation instead of building upon continuous yet smaller validations,” Al-Dakheel told Arab News.  
Doaa Aref, CEO of Chefaa, and Mai Abdulwahab, founder of Nqoodlet, both said that lack of funding is the main barrier for women in tech globally.
Awards were distributed during a special event, under the patronage of the Small and Medium Enterprises General Authority, known as Monsha’at, in the presence of its Deputy Gov. Saud Al-Sabhan.  
Al-Sabhan delivered a speech during the event about the importance of women entrepreneurs stating that Monsha’at contributed to increasing the number of female-led enterprises to more than 467,000.  
“The most significant shift in our landscape in the Kingdom will be the change in sentiment, investment appetite and innovation. Top founders will move to Saudi Arabia to grow and start their businesses here, and the world’s biggest investors will follow,” Al-Dakheel said. 

 


Respite for oil market amid rate hike worries

Respite for oil market amid rate hike worries
Updated 01 June 2023

Respite for oil market amid rate hike worries

Respite for oil market amid rate hike worries
  • Oil markets may have been oversold in the last two trading days, says analyst

RIYADH: Oil steadied on Thursday as a potential pause in US interest rate hikes and the passing of a crucial vote on the US debt ceiling bill were offset by a report of rising inventories in the world’s biggest oil consumer.

US Federal Reserve officials on Wednesday suggested interest rates could be kept on hold this month and the US House of Representatives passed a bill suspending the government’s debt ceiling, improving the chance of averting a disastrous default.

Brent crude futures fell 10 cents, or 0.14 percent, to $72.50 a barrel by 1339 GMT while US West Texas Intermediate crude rose 7 cents, or 0.1 percent, to $68.16. Both benchmarks fell on Tuesday and Wednesday.

“Oil markets may have been oversold in the last two trading days,” said CMC Markets analyst Tina Teng. “Sentiment rebounded amid the debt bill’s passage in the House and (the) Fed’s rate hike pause signal.”

HIGHLIGHTS

Market sources citing American Petroleum Institute figures on Wednesday said that US crude inventories rose by about 5.2 million barrels last week.

• Brent crude futures fell 10 cents, or 0.14 percent, to $72.50 a barrel by 1339 GMT while US West Texas Intermediate crude rose 7 cents, or 0.1 percent, to $68.16.

Mixed demand indications from China, the world’s biggest oil importer, have nonetheless weighed on the market, as has industry data showing a rise in US crude inventories.

Market sources citing American Petroleum Institute figures on Wednesday said that US crude inventories rose by about 5.2 million barrels last week.

“The current mood is one of pessimism,” said Tamas Varga of oil broker PVM. “Investors have been pragmatic and risk averse of late.”

Also in focus is the June 4 meeting of the OPEC+ producer group, in which the Organization of the Petroleum Exporting Countries and allies including Russia will discuss whether or not to cut oil production further.

Barclays forecast

British multinational bank Barclays has slashed the average price of its Brent crude forecast for this year from $92 to $87 a barrel. The bank also slashed its price forecast of Brent for 2024 as it cut the average projected price to $87 a barrel from $97. 

Chinese company in Brazil 

China’s CNOOC Ltd. has begun production at the Buzios5 well off the coast of Brazil, the company said in a statement on Thursday. 

The well is the fifth phase of the Buzios oil field off Brazil’s southeast coast. At an average water depth of 1,900 meters to 2,200 meters, the field is the world’s largest deep-water pre-salt oil field, with daily production of 600,000 barrels, the company said. 

CNOOC’s Brazilian subsidiary owns 7.34 percent of the Buzios shared reservoir, which is 88.99 percent owned by Brazilian state-owned oil and gas company Petrobras.  CNOOC paid $1.9 billion to Petrobras last year to secure a 5 percent stake in a production sharing agreement at the field. 


UAE’s in-country value projects driving billions to local firms

UAE’s in-country value projects driving billions to local firms
Updated 02 June 2023

UAE’s in-country value projects driving billions to local firms

UAE’s in-country value projects driving billions to local firms

ABU DHABI: More than $27.23 billion has been redirected to the local economy since the UAE Ministry of Industry and Advanced Technology (MoIAT) and ADNOC launched major in-country value programs to support domestic industries.

Speaking at the Make in the Emirates Forum, Abdulla Al-Shamsi, Assistant Undersecretary of MoIAT, said more than $14.43 billion of investment was redirected to the local economy last year alone, an increase of 25 percent year-on-year.

“The National In-Country Value Program is a nationwide program that speaks one language across many different sectors,” Al-Shamsi said. “It’s one methodology and this is something we’re very proud of because it benefits the private sector and when the private sector sees this it helps them prepare, invest, and spend.”

The forum heard how the National ICV Program is “functionating well and accelerating.”

The forum also heard how industrial zones are playing a critical role in the in the country’s sustainable industrial development and broader economic prospects. Local industrial leaders described how they are utilizing alternative energy resources such as solar and hydrogen to reduce their carbon footprint.

The second edition of the Make it in the Emirates Forum concluded on Thursday with the UAE showcasing its unique value proposition to international investors.

Investors were invited to explore opportunities and competitive advantages, with panel discussions focusing on the National In-Country Value (ICV) Program, the role of industrial zones, competitive financing as a key enabler and local talent in the private sector.

The UAE’s industrial exports reached $47.6 billion in 2022, growing 49 on 2021. The industrial sector's contribution to GDP rose to $49.5 billion in 2022, a 38 percent increase on 2020.

The Make it in the Emirates Forum is organized by the Ministry of Industry and Advanced Technology in partnership the Abu Dhabi Department of Economic Development (ADDED) and ADNOC.

On the first day of the forum, the UAE government announced $2.7 billion in industrial offtake agreements, building on the $29.9 billion of offtake agreements announced at the 2022 edition of the forum.


Saudi fintech firm secures $3.2m in seed funding

Saudi fintech firm secures $3.2m in seed funding
Updated 01 June 2023

Saudi fintech firm secures $3.2m in seed funding

Saudi fintech firm secures $3.2m in seed funding

RIYADH: EdfaPay, a Saudi-based fintech startup that helps companies use their smartphones for payment, has raised $3.2 million in a seed funding round.

The funding round was led by Sanabil 500 MENA, Nufud Wealth International, Atmiid Investment, Basmah Commercial Investment, and a group of local and international angel investors.

EdfaPay aims to utilize the capital to strengthen its operations in the Kingdom and expand to Pakistan and South American countries.

Founded in 2022 by Ghormallah Alghamdi and Nedal Sabbah, it uses NFC technology to allow companies to collect payments through smartphones.

In February 2022, the firm secured $1.6 million in a pre-seed funding round led by Nuwa Capital, InspireUs VC, and Wallan Investment Group.

The fintech channeled its acquired funds into launching its financial services across the Kingdom and supported its market-entry efforts.

The Kingdom’s fintech investments reached $400 million in 2022, recording a 79 percent increase compared to 2021.

The Saudi Central Bank, also known as SAMA, is one of the country’s key players in enabling fintech across all subsectors.

Earlier this week, SAMA granted licenses to Spotii and Madfu, two fintech companies that aim to offer consumer financing options.