Saudi Arabia’s labor market booming as world wakes up to its potential

RIYADH: Saudi Arabia’s investment landscape continues to expand across diverse sectors, with industry leaders participating in global funding rounds, driving innovation beyond the Middle East and North Africa region. 

Aramco Ventures has led a $30 million Series A funding round for US-based climate tech startup Spiritus, joined by Khosla Ventures, Mitsubishi Heavy Industries America, and TDK Ventures. 

The investment will help Spiritus scale its direct air capture technology, designed to reduce carbon emissions from data centers and industrial construction without slowing expansion. 

“We’re seeing soaring demand for data centers and heavy industries, yet we can’t ignore the carbon that comes with it,” said Charles Cadieu, CEO and co-founder of Spiritus. 

“Our DAC technology brings large-scale decarbonization within reach. This funding advances our vision of supporting America’s explosive growth while keeping emissions in check,” he added. 

Bruce Niven, executive managing director of strategic venturing at Aramco Ventures, said that direct air capture has the potential to play an important role in decarbonizing hard-to-abate sectors of the economy, but until now, it has been too expensive to be meaningful.

“Breakthrough approaches like Spiritus are needed. We are excited to partner with Spiritus and bring this important technology to market,” Niven added.

Talabat acquires Instashop from Delivery Hero for $32m 

Kuwait-born and UAE-based q-commerce and food tech platform Talabat has completed the acquisition of 100 percent of Instashop from Delivery Hero SE for $32 million. 

The acquisition strengthens Talabat’s grocery and retail segment while expanding its partner network across the MENA region. 

Instashop, founded in 2015 by John Tsioris, will continue to operate as an independent brand under Talabat’s grocery and retail division. 

The platform connects users with vendors in the UAE, Bahrain, Egypt, Lebanon and Qatar and has an annual gross merchandise volume of $300 million. 

Talabat, founded in 2004, was acquired by Rocket Internet in 2015 for $170 million and operates in the UAE, Oman, Qatar, Bahrain, Jordan, Iraq, and Egypt.

SC Ventures and Visa partner to support SMEs in MENA 

SC Ventures, the fintech investment and innovation arm of Standard Chartered, has signed a memorandum of understanding with Visa to develop digital solutions for small and medium-sized enterprises across the MENA region. 

The partnership was formalized at a signing ceremony at the Visa Innovation Center in Dubai. 

Rola Abu Manneh, CEO of Standard Chartered Middle East, UAE, and Pakistan, and Saeeda Jaffar, Visa’s senior vice president and group country manager for the GCC, highlighted their commitment to fostering SME growth in the UAE and beyond. 

Breakthrough approaches like Spiritus are needed. We are excited to partner with Spiritus and bring this important technology to market.

Bruce Niven, executive managing director of strategic venturing at Aramco Ventures

LoftyInc. Capital Management secures $43m first close for Africa-focused fund 

LoftyInc. Capital Management has secured $43 million in the first close of its LoftyInc. Alpha Fund, a late-seed investment vehicle targeting startups in Nigeria, Egypt, Kenya, and Francophone Africa. 

The fund has attracted backing from African and international investors, including sovereign wealth funds, development finance institutions, and high-net-worth individuals. 

Key investors include Egypt’s Micro, Small, and Medium Enterprises Development Agency, Tunisia’s Anava Fund of Funds, and the Dutch Entrepreneurial Development Bank, as well as Proparco with FISEA.

The International Finance Corp., AfricaGrow, the Dutch Good Growth Fund, and US-based First Close Partners were also investors.

Capital Haus acquires 11.6 percent stake in Equity Story Group 

UAE-based financial concierge firm Capital Haus has acquired an 11.6 percent strategic stake in Equity Story Group Ltd., pushing its total assets under management beyond $1 billion. 

The investment aligns with Capital Haus’ focus on delivering alternative wealth management solutions for high-net-worth individuals and corporate investors. 

As part of the deal, Brendan Gow, founder and managing director of Capital Haus, has been appointed as an executive director on the board of Equity Story Group.

“With the UAE’s emergence as a leading global wealth hub, investors are increasingly looking for alternative asset classes, cross-border investment access, and concierge-style financial services,” the press release stated.

Egypt’s Mrkoon raises bridge funding from A Ventures 

Egypt-based waste management platform Mrkoon has secured bridge funding from A Ventures, increasing the investment firm’s stake in the startup to 28 percent. 

The funding will support Mrkoon’s regional expansion, with plans to enter the Gulf Cooperation Council market. 

Founded in 2022 by Mohamed Shalabi, Ahmed Mamdouh, and Ahmed Amir, Mrkoon operates a business-to-business platform that enables enterprises, particularly in the industrial and manufacturing sectors, to offload surplus materials and scrap. 

A Ventures, an Egypt-based investment and portfolio management firm, was established in 2024 by Sherif Ramadan and Ayman Abbas.

BILRS secures funding from Salica Spring Studios 

UAE-based fintech BILRS has raised an undisclosed funding round from Salica Spring Studios, backed by Al-Waha Fund of Funds. 

The investment will help the company expand its operations, enhance its technology, and grow its global reach. 

Founded in 2022 by Rupert Shaw, BILRS provides international bill payment solutions, mobile top-ups, and gift cards, enabling seamless cross-border transactions in the B2B space. 

The company previously secured pre-seed funding from Haatch in 2023.

Foras secures stake in crowdfunding platform Beban 

UAE-based investment firm Foras has acquired a 36 percent stake in Beban, a Bahrain-based crowdfunding platform, for an undisclosed amount. 

The investment aims to enhance access to capital for startups and entrepreneurs across the region. 

Founded in 2022, Beban is a subsidiary of Hope Ventures and is licensed by the Central Bank of Bahrain. 

The platform connects entrepreneurs with investors to drive business growth in the MENA region.

FanTV raises $3m in Series A funding 

UAE-based artificial intelligence-powered content platform FanTV has secured $3 million in a Series A funding round from Mysten Labs, Cypher Capital, CoinSwitch Ventures, and Illuminati Capital. 

The funding will support the company’s expansion efforts and the enhancement of its AI-driven tools for content creators. 

Founded in 2022 by Prashan Agarwal, FanTV operates as a Web 3.0 content platform that allows creators to upload and monetize content based on viewership. 

The company aims to scale its user base and technological capabilities globally.

MENA funding grows fivefold in Feb 

Investment in MENA startups surged nearly fivefold in February, reaching $494 million across 58 deals, according to Wamda. 

The sharp increase was driven by a shift from debt financing, which fell to 15 percent of total funding compared to 90 percent in January. Excluding debt, equity investments rose 371 percent month-on-month. 

Saudi Arabia led with $250.3 million across 25 deals, followed by the UAE with $203.5 million from 15 deals and Egypt with $27.5 million across eight transactions. Smaller investments were recorded in Oman, Morocco, and Jordan, as well as Tunisia, Bahrain, and Qatar. 

Fintech dominated with $274 million across 15 deals, followed by insurance tech with $55 million, and logistics with $28.5 million. 

Marketing tech, education tech, AI, and clean tech also saw significant funding. 

Later-stage rounds gained traction, with Tabby securing $160 million in Series E funding, Flow48 raising $69 million, and Applied AI closing $55 million. 

Despite the funding surge, gender disparity persisted, with female-founded startups receiving just $200k — 0.04 percent of total investment — while male-led ventures secured 86.7 percent of funding.

RIYADH: Saudi Arabia’s corporate venture capital arms are playing a pivotal role in driving innovation and advancing economic diversification by aligning their investment strategies with both national and corporate objectives.

Between 2020 and the third quarter of 2024, corporate investors accounted for 27 percent of the 1,361 unique investors in the Middle East and North Africa region, deploying approximately $380 million, according to a report by MAGNiTT.

Saudi Arabia saw the highest ratio, with CVC’s making up 30 percent of local unique investors.

Funds such as Aramco Ventures and stc’s tali ventures exemplify this dual-purpose approach. By leveraging their resources and expertise, these CVCs are fostering startups that align with the Kingdom’s Vision 2030 agenda while simultaneously advancing the strategic and operational goals of their parent companies.

According to Stephane Ulcakar, associate director and head of corporate and government financial services at Arthur D. Little, these funds stand out due to their scale and strategic scope.

“Aramco Ventures recently secured an additional $4 billion in funding, raising its total capital to $7 billion,” Ulcakar noted in an interview with Arab News, adding that stc has also collaborated with global players like SoftBank and the Saudi Public Investment Fund to broaden its reach.

This alignment extends to specific investment sectors. In an interview with Arab News, Arjun Singh, partner and global head of fintech at ADL, explained: “These arms — and their affiliated funds — are not just looking for the next big thing but also for startups that can integrate seamlessly into their parent companies’ operations.”

Stc’s tali ventures prioritizes fintech, artificial intelligence, and blockchain, reflecting both the nation’s and its parent company’s ambitions to champion Saudi Arabia’s digital economy.

Similarly, Aramco’s Wa’ed Ventures focuses on startups that advance the Kingdom’s digital transformation while complementing Aramco’s strategic objectives.

Beyond funding, Saudi CVCs bring a distinct set of advantages to startups by leveraging industry expertise, supply chain networks, and expansive ecosystems.

Ulcakar highlighted the role of national initiatives such as the PIF’s National Development Strategy in addressing supply chain gaps and reshaping logistics.

Startups backed by these CVCs gain access to infrastructure and pilot programs within large ecosystems, which help refine their offerings.

“Certain well-known national players have partnered with startups to integrate advanced technologies into their supply chain operations, testing solutions like automation and predictive analytics,” Ulcakar stated.

Singh emphasized how this approach accelerates innovation, particularly in regulated industries like fintech and healthcare.

“Startups backed by corporate investors show stronger performance, as these partnerships can significantly accelerate regulatory approval processes and market entry,” he said.

Saudi National Bank’s venture capital arm is an example of an organization enabling fintech startups to scale efficiently by offering regulatory navigation support and access to a large customer base, he added.

“The Saudi VC market is undoubtedly burgeoning, with abundant demand for bankable capital and distinct funding and technical advantages brought by various players on the supply side,” Ulcakar said.

The market’s maturation is evident, with funding reaching $987 million in 2022, and CVCs accounting for 32 percent of all deals — a significant rise from less than 15 percent in 2018.

This growth is not limited to Aramco and stc — banks including SNB Capital, Riyad Bank and SAB are emerging as key players, further diversifying the funding landscape.

Additionally, Saudi Venture Capital continues to act as a catalyst for the ecosystem, having deployed over SR3.4 billion ($905.7 million) through direct and indirect investments.

This has propelled Saudi Arabia to capture the highest share of total VC funding in the MENA region, reaching 54 percent in the first half of 2024, up from 38 percent during the same period in 2023.

The Kingdom’s VC ecosystem is marked by a collaborative dynamic between corporate and traditional VCs.

Singh highlighted that “87 percent of CVC-backed deals in 2022-23 included traditional VC participation.”

This high rate of co-investment reflects a complementary relationship, where both types of investors contribute to building a more sophisticated, institutionalized ecosystem.

Singh noted that this coordinated evolution spans multiple sectors and is essential to creating a sustainable innovation landscape aligned with Saudi Arabia’s Vision 2030.

Looking ahead, the key question is how this ecosystem will consolidate further, potentially positioning the Kingdom as a global private capital hub.

“The diversity of approaches — from direct CVC arms to partnerships with established VC firms — demonstrates the market’s growing maturity and suggests a sustainable growth trajectory,” Ulcakar stated.

This progress is a critical component of the Kingdom’s strategy to establish itself as a leader in technology and innovation.

In sectors such as energy and logistics, Saudi Arabia’s CVCs are playing a pivotal role in driving innovation.

Ulcakar explained that the Kingdom is leveraging its global footprint to balance present needs with future aspirations.

Investments in fossil fuel infrastructure, for example, are complemented by efforts to localize electric vehicle technologies and pioneer nuclear fusion projects. These investments often blend incremental improvements with disruptive technologies, creating a dual pathway for transformation.

CVC arms are distinctive in their dual mandate to achieve financial returns while pursuing strategic objectives for their parent companies.

This dual focus shapes their investment and risk management philosophies, setting them apart from independent venture capital firms.

Singh said: “Unlike traditional VCs, which prioritize financial exits and short-term gains, Saudi CVCs often adopt a longer-term, patient capital strategy.”

This approach allows them to align their investments with their parent companies’ strategic goals, even if such opportunities involve higher initial risks or extended timelines.

For instance, Aramco Ventures invests in clean energy and carbon capture technologies, aligning with the parent company’s energy transition and sustainability goals.

These investments represent long-term bets with strategic implications, demonstrating a willingness to prioritize alignment with corporate objectives over immediate financial returns.

Similarly, tali ventures focuses on digital innovation while reinforcing stc’s leadership in telecommunications and digital services.

By investing in startups, tali ventures not only targets financial returns but also strengthens stc’s digital payments ecosystem, creating synergies that benefit the parent company’s broader ambitions.

Singh highlighted this dual approach as a key differentiator, noting that these capabilities enable Saudi Arabia CVCs to pursue opportunities that might otherwise be deemed too risky by independent VCs.

Ulcakar emphasized the nuanced nature of this approach. “The ability to generate both financial and strategic returns represents a unique advantage and a complex challenge in this growth market. There is no one-size-fits-all answer,” he said.

Ulcakar also noted that Saudi Arabia is one of the few growth markets that has successfully financed its own development, with investor preferences gradually evolving.

“We observe a gradual shift toward prioritizing financial returns over strategic ones, aligning with the Kingdom’s evolving investment goals,” he added.