Nothing was the same after June 2017, when Mohammed bin Salman (MBS) was appointed crown prince of the Kingdom of Saudi Arabia. Especially after pumping $3.5 billion in Uber and turning heads in Silicon Valley. The ecosystem in Saudi Arabia, be it startups or investors, has never been faced with this much recognition. Is that what happens when you put youth in leadership positions? But it would be unfair to attribute the success rate of the entire peninsula of Saudi Arabia to just one very privileged man.
With many developments in the pipeline, Saudi Arabia has been a very attractive playground for emerging startups. Similarly, Saudi startups have been poised as very interesting assets to investors hawking over the region. We’ve seen this on several occasions in just one month– and this is just the tip of the iceberg.
Is It Greener on the Saudi Side?
On February 17th, Estonia-based foodtech startup Natufia Labs raised $3.5 million in a Series A funding round, from KAUST through their venture capital investment arm — the KAUST Innovation Fund (KIF). Butterfly Ventures also participated in the round. The startup will be relocating to Saudi Arabia, basing itself at the KAUST Research and Technology Park (KRTP) to help grow its R&D.
On February 11th, UAE-based cloud kitchen Kitopi has also expanded its operations to Saudi Arabia, starting with more than 40 restaurant partners in Riyadh. So far, Kitopi has seven kitchens in Riyadh and will look to open more than five kitchens in Jeddah before the end of Q3.
A Hungry Ecosystem
It isn’t the population that drives companies in the food-tech industry, like Natufia Labs and Kitopi, to a country like Saudi Arabia, but rather the median age of the population. Chaitanya GRK, regional director at Farrelly & Mitchell argues that the median age of Saudi Arabians is in its late twenties, that means they have a high purchasing power and a large appetite to try out different products.
On February 1st, Saudi Arabia’s FOODICS announced a $20 million Series B funding round, led by Sanabil Investments (a firm wholly owned by Saudi Arabia’s Public Investments Fund) and co-led by STV. Other investors in the round include Endeavor Catalyst, Elm, and Derayah.
FOODICS is a F&B tech startup that offers an all-in-one retail management platform helping retail and restaurant owners run their business. Since its inception in 20XX, FOODICS has processed over 5 billion orders through the platform, and over 50,000+ terminals while catering to over 10,000 F&B brands, the startup has shared. This latest investment round brings the total funds raised so far to $28 million.
What About Financial Inclusion?
On February 14th, FlexxPay, a fintech operating in the UAE and KSA, raised a $3 million Pre-Series A funding round, led by JIMCO and Target Global. Several other investors participated in the round including Wamda, DIFC FinTech Fund, March Holding, Arzan VC, Sukna Ventures, Nuwa Capital, and VentureSouq.
FlexxPay is an HR solution enabling access to already-earned income (salaries, commissions, pensions, and end of service benefits) via its platform.
On February 15th, Raqamyah, the KSA-based fintech Peer-to-Peer (P2P) lending platform, secured a $2.3 million Pre-Series A funding round. The investment was led by Impact46 with participation from Vision Ventures, Mad’a Investment, Alyusur Company, Fadeed Investment, and strategic angel investors.
During the COVID-19 lockdown, the platform expanded from lending to micro-enterprises only to SMEs. It also launched a POS lending service is in partnership with Skyband, allowing SMEs to acquire loans from Raqamyah and pay their monthly installments through sales recorded on the point-of-sale machine. The first POS loan posted in January 2021 was oversubscribed by SAR 2 million, the startup states, and was fully funded by the automatic lending tool.
In early 2018, a tech company came to the light to provide and develop technologies and electronics such as phones and other devices at affordable prices. Azom is the brainchild of some young members of Daleni App, an on-demand services platform founded in 2017 in Riyadh.
On February 7th, Azom scored $9.5 million in a Series A funding round, from Assr AlJawal and an individual investor who prefers not to be named.
“Technology should not be expensive, and we will strive to reach a society that we can build together,” says Mohamad Almunajem, CEO of Azom. “We will continue to invest in research and development until our work is clearly reflected on the Saudi society and economy.”
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