Bahrain’s Investcorp leads Salla’s $130m pre-IPO funding round

Image credit: MAZEN MAHDI/ Getty Images

Bahrain-based alternative asset manager Investcorp said on Monday that it has led Salla’s pre-IPO fundraising with a $130m investment ahead of the Saudi Arabian software startup listing on the local exchange.

The fundraising had the participation of Sanabil Investment, a unit of Saudi sovereign wealth fund Public Investment Fund, venture capital firm STV, and Salla’s existing shareholders.

The asset manager, in a statement, said that the deal was made through its Investcorp Saudi Pre-IPO Growth Fund LP – a $500m fund that’s focused on pre-IPO companies in Saudi Arabia.

“We see great interest in the potential of Saudi companies to IPO, especially as scale-ups and unicorns demonstrate local and regional success. Salla has managed to grow exponentially and deliver best-in-class margins,” said Walid Majdalani, Investcorp head of Emerging Markets Private Equity.

سعداء بإغلاق جولة ما قبل الاكتتاب العام (Pre-IPO) بقيمة 487,5 مليون ريال سعودي، بقيادة شركائنا @Investcorp, سنابل للاستثمار، @STVcapital.#سلة #مستقبل_التجارة pic.twitter.com/fgdYFykvWC

— سلة (@SallaApp) March 4, 2024

Founded by Nawaf Hariri and Salman Butt in 2026, Salla enables merchants to tap into the kingdom’s $20bn e-commerce market, which is expected to grow by more than 25 per cent year-on-year in the coming years.

The platform has enabled $7bn in e-commerce sales since 2020 and currently serves more than 80,000 active merchants. Beyond being integrated with online payment solutions and logistics companies, Salla has over 400 applications on its platform that support its merchants.

Salla joins Saudi IPO frenzy

Meanwhile, Salla is part of the growing number of startups in Saudi Arabia that are working toward a public market debut as investors look to capitalise on the country’s rapid growth, according to a Bloomberg report.

Floward, an online company which delivers flowers and gifts, is reportedly working with banks on a potential listing this year while buy-now, pay-later platform, Tabby, is also planning a stock market listing.

Tabby hit a $1.5bn valuation in pre-IPO fundraising last November.

Investment in Saudi startups surged by 33 per cent year-on-year (YoY) to $1.4bn in 2023, according to Dubai-based data platform MAGNiTT, constituting just over half of all venture capital funding raised in the Middle East and North Africa.

The growth in the kingdom’s venture capital market is being driven by the government’s focus on innovation, a dedicated unicorn project, and investments from sovereign funds such as SVC, Jada, and Sanabil.

Read: Saudi Arabia secures $1.4bn in 2023, leads MENA VC fundraising