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Venture Capital - Saudi Arabia

Saudi Arabia

The country in Saudi Arabia is expected to see Total Capital Raised in the Venture Capital market market reaching US$668.60m in 2024.
Early Stage leads the market with a projected market volume of US$331.40m in 2024.
When compared globally, the United States is forecasted to generate the most Capital Raised, amounting to US$136,600.0m in 2024.
Saudi Arabia's Venture Capital market is flourishing, with a surge in tech startups attracting increasing investor interest and driving innovation.

Key regions: Europe, United States, United Kingdom, Australia, Brazil

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Analyst Opinion

The Venture Capital market in Saudi Arabia is experiencing significant growth and development, driven by various factors including customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: In recent years, there has been a shift in customer preferences towards investing in innovative and high-growth potential startups. Saudi Arabian investors are increasingly recognizing the potential for high returns on investment in the technology and innovation sectors. They are actively seeking opportunities to invest in startups that are disrupting traditional industries and offering innovative solutions to market challenges.

Trends in the market: One of the key trends in the Venture Capital market in Saudi Arabia is the increasing number of startups and entrepreneurial activities. This trend is fueled by the government's efforts to promote entrepreneurship and innovation as part of its Vision 2030 initiative. The government has implemented various programs and initiatives to support startups, including the establishment of incubators and accelerators, as well as providing funding and mentorship opportunities. Another trend in the market is the growing interest from international investors in Saudi Arabian startups. The country's strategic location, strong economy, and supportive government policies have made it an attractive destination for foreign investment. International venture capital firms are actively seeking investment opportunities in Saudi Arabia, particularly in sectors such as e-commerce, fintech, and healthcare.

Local special circumstances: Saudi Arabia has a young and tech-savvy population, which is driving the demand for innovative products and services. The country has a high smartphone penetration rate and a growing internet user base, creating a favorable environment for startups to thrive. Additionally, the government's focus on diversifying the economy away from oil has created opportunities for startups in sectors such as renewable energy, tourism, and entertainment.

Underlying macroeconomic factors: The Venture Capital market in Saudi Arabia is also influenced by underlying macroeconomic factors. The country has a strong and stable economy, with a high GDP per capita and low inflation rate. This provides a solid foundation for investment and growth in the Venture Capital market. Furthermore, the government's commitment to economic reforms and liberalization has improved the business environment and attracted both domestic and foreign investors. In conclusion, the Venture Capital market in Saudi Arabia is experiencing significant growth and development, driven by customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. The government's focus on promoting entrepreneurship and innovation, along with the country's strong economy and supportive business environment, has created a conducive environment for startups and venture capital investment. As a result, the Venture Capital market in Saudi Arabia is expected to continue its upward trajectory in the coming years.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.