Saudi Arabia attracts record $152m in startup funding in 2020

Saudi-based startups attracted a record $152m in total funding, a new report by startup research platform Magnitt says.

Against the backdrop of Covid-19, the Saudi startup ecosystem was the fastest growing of the top three leading hubs in MENA, the report adds.

In the first half of 2020, $111m was raised with notable funding rounds including the $36.5m and $18m raised by food and grocery delivery startups Jahez and Nana, respectively.

In a reverse of a decline in deals across MENA, Saudi deal flow was 35 per cent up, compared to 2019. The year 2020 saw 88 investments take place in the kingdom, with 67 per cent of deals closed in the first half of 2020. Among the most active investors were OQAL Angel Investors, SVC, as well as 500 Startups, Impact46, KAUST and Saudi Aramco.

More international investors were active in Saudi Arabia in 2020 than in 2019, with 17 per cent of investors based outside of the Kingdom, an 11 per cent increase from 2019. However, the number of venture capital institutions remained the same in 2020 at 47.

E-commerce and fintech witnessing an unprecedented spike in demand in 2020 due to Covid-imposed restrictions. These two segments represented 20 per cent and 10 per cent of all deals in Saudi Arabia, respectively.

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Moreover, e-commerce startups raised 45 per cent of total funding in 2020, followed by transport (10 per cent) and Education (9 per cent).

Covid-19 also forced accelerator programmes online, which translated into a drop of accelerated deals by 16 per cent in Saudi Arabia to only 7 per cent of total deals in 2020.

Read: Over $1bn piled into MENA-based startups in 2020