Venture capital firm 500 Startups said it partnered with Sanabil Investments, a subsidiary of Saudi Arabia’s Public Investment Fund, to launch a new accelerator and an investment fund to support start-ups in the Middle East.
The initiative, called Sanabil 500 MENA Seed Accelerator Programme, consists of six initiatives and will be run by the California-based 500 Startups over a period of three years for a select group of pre-seed and seed stage companies from across the Mena region.
Selected start-ups will also receive a $100,000 investment from the Sanabil 500 MENA Seed Accelerator Fund. Besides the participating companies, the fund will also invest in other pre-seed and seed stage start-ups throughout the Mena region.
Applications for the first batch of the programme started today.
Selected start-ups will participate in a 12-week programme that begins with a two-week session on foundations of growth. It will be followed by seven weeks of guided coaching and an additional three weeks of classes on fundraising and pitch preparation.
“The region’s ecosystem has evolved significantly since 500 [Startups] first started investing in the region nearly 10 years ago,” Bedy Yang, managing partner at 500 Startups and general partner of the fund, said.
The fund is expected to invest in approximately 100 start-ups.
Start-ups in Mena region secured record funding of more than $1 billion last year, according to data platform Magnitt.
Start-ups in Saudi Arabia, the Arab world's biggest economy, received funding of more than $152 million in 2020 from investors, up 55 per cent compared to the prior year period despite a pandemic-driven economic downturn, Magnitt found.
Since its inception in 2010, 500 Startups has run more than 50 accelerator programmes worldwide. It has invested in more than 2,500 companies globally, including over 180 companies in the Mena region. Based on its internal valuations, which is not verified, its global investment portfolio had more than 23 unicorns at the end of last year.
A Sanabil Investments' representative said the fund will "support founders in Saudi Arabia and regionally to accelerate their growth and create the champions of tomorrow".
Gulf countries are pumping in millions of dollars into regional start-ups, which are at the heart of their plans to diversify their oil-reliant economies.
In the UAE, Abu Dhabi formulated the Dh535m Ventures Fund– launched as part of the Dh50bn Ghadan 21 initiative to stimulate the emirate's economy. It has committed approximately Dh200m since its inception in May 2019 to more than 15 companies and funds in its portfolio.