In recent years, Saudi Arabia, and the MENA region more generally, have seen a significant increase in the amount of funding. In H1 2020, Saudi Arabia saw an increase of 102% in total VC funding compared to H1 2019, making it the fastest growing ecosystem by total funding in the MENA region. As highlighted in a previous report by STV, this growth trend is expected to continue, with Saudi Arabia predicted to reach $500 million in VC funding by 2025.
Given this predicted growth and with Vision 2030’s emphasis on technology, STV has sought to unlock the potential of this region by backing its digital champions. Since its inception in 2018 until H1 2020, STV has led 30% of all VC fundraising in Saudi Arabia. It has led and participated in regional funding rounds totaling $333 million, accounting for a sizable 16% of all VC fundraising in MENA.
With this contribution, the fund has quickly become one of the largest contributors to VC funding and technology enablement in the region.
“At this crucial turning point in the region’s trajectory, we are driven to accelerate its transformation through supporting world-class founders and engines disrupting big markets. While the impact is already evident, we believe that we are only just at the beginning and there are strong tailwinds that will contribute to significant value creation and disruption.” Abdulrahman Tarabzouni, CEO, STV
Through STV’s investments in 11 startups, 2.4 million gig jobs have been created, earning individuals more than $1.9 billion in supplemental income. Regional players such as Careem, Mrsool, and Nana allow people in MENA to earn additional income on their own time. As a co-lead investor in Careem’s investment round, STV played a strong supporting role in the subsequent $3.1 billion acquisition by Uber, marking the first unicorn exit in the region and a successful exit for a Saudi fund in less than two years.
STV has continued to invest in digital plays that support people in their everyday lives, even during COVID-19, including a follow-on investment in social learning startup Noon Academy and an investment in grocery delivery startup Nana. In this time of need, existing portfolio companies such as health tech startup Vezeeta and cloud communications platform Unifonic have also supported the local community by lending their services and support to those who need it.
Striving to promote technological empowerment and increase diversity and inclusion in the region, STV’s portfolio companies directly employ over 3,100 people from 75 countries. These include 517 technology and 115 product employees, 28% of whom are women.
“At STV, we believe in a digital-first MENA. We have already seen the laser focus of MENA’s startups towards building digital infrastructure in areas such as logistics, fintech, and e-commerce. Looking forward, we expect a new wave of companies to reap the rewards of those seeds that were planted in the last few years. We are really on the cusp of something big.”Abdulrahman Tarabzouni, CEO, STV
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