Start-ups in Saudi Arabia recorded a 72 per cent annual increase in venture capital funding to $987 million across 144 deals in 2022, a report has indicated.
The kingdom was the second-most funded geography after the UAE in the Middle East and North Africa for last year. It also accounted for 31 per cent of total capital invested in the region, according to start-up data platform Magnitt’s Venture Capital Report compiled in collaboration with Saudi Venture Capital.
Start-ups in the UAE raised $1.19 billion in 2022, while those in third-placed Egypt attracted $517 million in funding.
The Arab world’s biggest economy ranked third in terms of total VC transactions in Mena and accounted for 23 per cent of total deals in the region, the Magnitt report said.
“This is not to say that the VC ecosystem did not see the impact of the economic slowdown like its peer Mena markets,” said Philip Bahoshy, founder and chief executive of Magnitt.
“If we look at the quarterly breakdown, a similar trend as the other emerging markets was seen over the year, with funding and deals seeing a gradual retreat. Despite this, the Middle Eastern region has been making vigorous efforts to drive investment in the region with Saudi Vision 2030 being one of them.”
Saudi Arabia is seeking to grow its start-ups and small and medium enterprise sector as part of its push to diversify its economy from oil, create jobs and attract high-skilled talent into the kingdom.
Technology is a strong pillar of Saudi Vision 2030, the national strategy aimed at diversifying the country's economy and steering away from dependence on oil. Riyadh is encouraging entrepreneurship and seeking investment from both local and foreign entities to develop the sector.
FinTech was the industry of choice for investors in terms of the number of deals as well as total funding in Saudi Arabia last year, accounting for 24 per cent of funding with $239 million raised across 28 deals, according to Magnitt.
F&B was the second-most funded industry in the kingdom after start-ups raised $187 million, followed by transport and logistics, which raised $180 million.
The world’s top oil exporter recorded three mega deals (more than $100 million) last year closed by food and beverage start-up Foodics, FinTech Tamara and transport and logistics start-up TruKKer. These three mega deals accounted for 37 per cent of total capital deployed, the report added.
A record 104 investors backed Saudi Arabia-based start-ups in 2022, up by 30 per cent annually, with 79 per cent of investors hailing from the kingdom itself.
500 Global, Sanabil 500 and Impact 46 were among the kingdom’s most active backers, the Magnitt report said.
“Saudi Arabia’s venture capital market has been evolving at a very fast pace, especially on the regulatory and legal fronts,” Haifa Bahaian, chief legal officer at SVC, said.
“The issuance of the new Companies Law by the Ministry of Commerce and the Investment Funds Regulations by the Capital Market Authority is a very important step in developing the ecosystem and helping entrepreneurs and local fund managers.”
The kingdom also recorded the highest number of mergers and acquisition activity, with 10 exits last year. This accounted for 14 per cent of all Mena exits, according to Magnitt.
Early stage deals secured the lion’s share of transactions in Saudi Arabia at 84 per cent, the research found.
Saudi Arabia mega projects in 2023 — in pictures
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
PROFILE
Name: Enhance Fitness
Year started: 2018
Based: UAE
Employees: 200
Amount raised: $3m
Investors: Global Ventures and angel investors
The Prison Letters of Nelson Mandela
Edited by Sahm Venter
Published by Liveright
Landfill in numbers
• Landfill gas is composed of 50 per cent methane
• Methane is 28 times more harmful than Co2 in terms of global warming
• 11 million total tonnes of waste are being generated annually in Abu Dhabi
• 18,000 tonnes per year of hazardous and medical waste is produced in Abu Dhabi emirate per year
• 20,000 litres of cooking oil produced in Abu Dhabi’s cafeterias and restaurants every day is thrown away
• 50 per cent of Abu Dhabi’s waste is from construction and demolition
Results
Ashraf Ghani 50.64 per cent
Abdullah Abdullah 39.52 per cent
Gulbuddin Hekmatyar 3.85 per cent
Rahmatullah Nabil 1.8 per cent
What drives subscription retailing?
Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.
The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.
The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.
The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.
UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.
That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.
Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.
What is graphene?
Graphene is a single layer of carbon atoms arranged like honeycomb.
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.
At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.
It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.
But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
