Riyadh property rental start-up Mabaat raises $2.4m to fuel expansion

Company plans increase spending on marketing to target regional travellers seeking short-term rentals in the kingdom

Talal Al Sorayai, founder and chief executive of Mabaat, says the company aims to disrupt the alternative accommodations market throughout the kingdom. Courtesy Mabaat

Mabaat, a Riyadh-based marketplace for short-term rentals, has raised 9 million Saudi riyals ($2.4m) to expand operations, hire new talent and broaden its reach across the region.

The funding round was led by Riyadh-based venture capital fund Derayah Ventures. Early-stage investment specialist Seedra Ventures was also part of the financing deal.

The latest financing will help the company achieve its vision of "disrupting the alternative accommodation market” across the kingdom, Talal Al Sorayai, founder and chief executive of Mabaat, said.

“Mabaat’s innovative platform is unique as it offers property partners higher occupancy levels at attractive rates,” Mr Al Sorayai said.

Start-ups in the Middle East and North Africa secured $659m in funding in the first half of the year, an annual increase of 35 per cent, according to data platform Magnitt. In Saudi Arabia, the Arab world’s biggest economy, start-ups raised $168m in venture capital funding from 54 transactions in the first half of 2021, about 94 per cent of the amount extended to them in 2020, according to Magnitt.

Mabaat said it will use part of the new funds on marketing and boosting its brand awareness to property owners and guests. The campaign will target regional travellers seeking short-term rental solutions as it looks to build its platform to better connect guests with the suitable properties.

Founded in October 2019, Mabaat on boards properties and manages them on behalf of owners. Its offerings include mid-to-high-end private homes and compounds spread throughout the key regions in the kingdom.

The company is hiring new talent as its expands its operations over the coming months, the company said.

The tourism sector in Saudi Arabia is growing rapidly as the government and the kingdom's sovereign wealth fund spend billions of dollars on entertainment and hospitality. The sector is among the key planks of the Saudi Vision 2030 initiative that seeks to diversify the kingdom's economy and reduce its reliance on oil. The kingdom wants to grow tourism revenue to about 11.5 per cent of its gross domestic product by 2029.

“In order to realise this [goal], one of the new models considered is short-term rentals that capitalise on existing and hardly-utilised capacities,” Faris Al Rashed, head of Derayah Ventures, said.

Mabaat said its platform provides an increased level of transparency and efficiency to both property owners and guests through real-time information on booking, payment, sterilisation and property maintenance updates.