Saudi crown prince launches ‘King Salman Automotive Cluster’ at KAEC

RIYADH: Crowdfunding has emerged as one of the fastest-growing financial channels in Saudi Arabia, with platforms doubling in size annually and surpassing SR3 billion ($800 million) in capital last year, according to a top official. 

During a panel discussion at the Kingdom’s premier tech conference, LEAP 2025, Mohammed El-Kuwaiz, chairman of the Capital Market Authority, stated the financing landscape has also expanded significantly, moving beyond traditional bank loans and initial public offerings. 

“Whether we look at debt crowdfunding or equity crowdfunding, these platforms have actually been doubling in size every year for the past three years,” he said, highlighting their growing role in the country’s evolving financial ecosystem. 

Alongside crowdfunding, Saudi Arabia has introduced a range of new financing options to support businesses at different stages of growth. 

“We used to think of financing as one of two routes, either bank financing or IPOs. Today, that menu includes a plethora of investment and financing options,” El-Kuwaiz said. He highlighted that the country now has eight distinct investment and financing stages, with half of these introduced in recent years. 

The rapid rise of crowdfunding is part of a broader transformation in the Kingdom’s capital markets, which have expanded significantly since the Vision 2030 economic diversification plan was unveiled in 2016.

“The story of capital markets and how they serve entrepreneurs is very much running in parallel with the growth that we’ve been seeing in LEAP. We have moved from being the 25th or 26th largest market in the world to now being one of the top 10 largest markets in the world,” he said. 

The regulatory environment has also evolved to support business formation, with changes to the country’s corporations law allowing for multiple classes of shares and various investor rights. 

“Most startups and most founders require a degree of flexibility that our former corporations’ law did not allow them to serve,” El-Kuwaiz said, citing features such as drag-along and tag-along rights that were previously unavailable. 

Exit strategies for startups have expanded as well, with IPO activity accelerating and mergers and acquisition regulations being streamlined. 

“We moved from doing something like 10 listings a year to, in the last couple of years, doing in excess of 40 IPOs a year, and more than 50 percent of these listings are actually small and medium businesses. Many of them are actually venture-backed,” El-Kuwaiz said. 

However, mergers and acquisitions remain the most common exit strategy, with regulatory updates in 2017 and 2018 fueling a surge in M&A transactions. 

“As a result of that first rewrite, we have actually seen in the last five or six years more M&A activity than since we established the CMA 15 years ago,” he added. 

Saudi Arabia’s capital market transformation has also made it an increasingly attractive destination for international entrepreneurs. 

“We have seen more and more from outside of the region seriously considering relocating to Saudi Arabia because of the market, because of these regulatory developments, and this potential to exit,” the CMA said.

Debt markets have also played a crucial role in financing businesses, surpassing equity markets in capital raised since 2021. 

El-Kuwaiz added that since then, “our debt capital market has been raising more capital for businesses and governments than the equity capital market, both in primary and secondary.” 

He also underlined that Saudi Arabia is developing its private credit sector alongside its debt market, with expectations that the latter will grow faster in the near term due to its liquidity and traceability advantages. 

El-Kuwaiz emphasized that the Kingdom’s efforts to enhance business formation, financing, and exit opportunities are creating a model that extends beyond national borders. 

“When we first started, we thought that solving the entrepreneurial problem was a Saudi-specific problem,” he said, adding: “But as we have evolved, we recognize that if we solve this problem, we can actually solve this problem for all entrepreneurs — whether in Saudi, the Gulf region, or the broader Middle East.”

RIYADH: Investments totaling $1.78 billion marked the third day of the LEAP 2025 Tech Conference in Riyadh, aimed at accelerating artificial intelligence and digital talent development.

Industry leaders, investors, and policymakers have launched several initiatives to drive digital transformation in Saudi Arabia, aligning with Vision 2030 to position the Kingdom at the forefront of the digital age.

Among these, Equinix, a global leader in digital infrastructure, announced a $1 billion investment in data centers nationwide, starting with a 100-megawatt facility to serve hyperscale and retail customers in the region.

“Equinix has been at the center of technological advancements for 26 years. Our global interconnection hubs allow data to move seamlessly worldwide, and now, we are expanding further into Saudi Arabia,” said Judith Gardner, vice president of growth and emerging markets at Equinix.

Saudi Arabia’s Communications, Space, and Technology Commission has launched Cohort 3 of its innovative regulatory sandbox program, aimed at empowering innovators and startups to test new technologies. 

Abdulaziz Al-Batli, general manager of technology enablement at CST, emphasized the commission’s approach, which balances ample space for innovation with necessary regulatory oversight.

To further solidify Saudi Arabia’s position as a regional technology and innovation hub, DAMAC’s EDGNEX unveiled plans to expand its investments in data centers for cloud computing and AI across the Kingdom. 

The company aims to develop a 500-megawatt capacity by 2030, aligning with the country’s broader digital transformation goals. 

This initiative complements the wave of investments announced at LEAP 2025, reinforcing Saudi Arabia’s commitment to enhancing its digital infrastructure and fostering an AI-driven economy.

Strengthening AI, startups, and emerging technologies

Several investment funds have pledged a total of $695 million to support startups specializing in AI, gaming, and innovative tech solutions, including:

• JOA Capital and Buidlnow: $80 million AI-powered infrastructure fund.
• Ula Capital: $75 million data-driven fund for AI and deep tech startups.
• Sanabil Accelerator by Orbit: $60 million fund for over 200 early-stage tech startups.
• Sharaka Financial: $30 million fund for startups in the MENA region.
• MERIT and BRKZ: Secured funding rounds totaling $28 million and $22 million, respectively.
• Torod: The largest Series A funding round for logistics tech in MENA, led by WAED.

These investments bring the Kingdom’s total venture capital commitments announced at LEAP to nearly $700 million, with close to $100 million dedicated to startup investments.

AI innovations and talent development

WhiteHelmet introduced ASIF, the first AI-powered construction agent designed to revolutionize the building industry by optimizing speed and efficiency.

Additionally, Microsoft announced the establishment of the Kingdom’s first Data Center Academy in partnership with the National IT Academy.

“This initiative aligns with Microsoft’s mission to provide cutting-edge digital skills and training, ensuring Saudi Arabia’s workforce is ready for the AI-driven future,” said Zainab Al-Amein, vice president of national digital transformation at Microsoft.

Similarly, Huawei, in collaboration with the Ministry of Communications and Information Technology, unveiled plans for a Future Skills Center to enhance AI expertise in the region. 

Accenture and Atomcamp also launched the first AI Academy in Saudi Arabia, aiming to train 20,000 Saudi professionals by 2030.

Expanding space and digital economy

CST Gov.  Mohammed Al-Tamimi, highlighted key themes shaping LEAP 2025, including AI, cloud computing, quantum technologies, and the intersection of space and the digital economy.

“We are witnessing the second phase of our space track, with over 20 events dedicated to discussions on space competition and the connection between space and the digital economy,” said Al-Tamimi.

Gaming industry

The gaming industry also saw significant investments, with HGM announcing a $300 million commitment to bring top gaming titles to Riyadh. The Kingdom’s first major military shooter game is set to launch in October, developed by a team with experience in franchises like Call of Duty.

With these major announcements, LEAP 2025 continues to reinforce Saudi Arabia’s position as a global technology and innovation hub. The ongoing event is underscoring the country’s efforts to drive digital transformation, AI advancements, and economic diversification in line with Vision 2030.