Saudi startup boom creates ‘entrepreneurial bridge’ with Egypt

Saudi startup boom creates ‘entrepreneurial bridge’ with Egypt
The Saudi market, characterized by its large size and high consumer purchasing power, presents lucrative opportunities for tech startups. Shutterstock
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Updated 19 December 2024
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Saudi startup boom creates ‘entrepreneurial bridge’ with Egypt

Saudi startup boom creates ‘entrepreneurial bridge’ with Egypt

RIYADH: Saudi Arabia’s thriving startup ecosystem has created an entrepreneurial bridge with neighboring countries, attracting a growing number of founders to the nation.

This trend is particularly pronounced among Egyptian tech entrepreneurs, drawn by market potential, government initiatives, and abundant funding opportunities.

The Saudi market, characterized by its large size and high consumer purchasing power, presents lucrative opportunities for tech startups.

Additionally, Vision 2030 and various entrepreneurship support programs have fostered a stimulating environment for innovation.

“Saudi Arabia’s government initiatives and funding opportunities are major attractors for Egyptian tech entrepreneurs,” Motaz Abuonq, CEO and founder of Value Makers Studio, told Arab News.

VMS is a Saudi-based venture studio that supports Egyptian and regional startups with funding opportunities and consulting to boost their entry into the Kingdom.

The entrepreneurial bridge

Abuonq explained that Egyptian entrepreneurs benefit from Saudi Arabia’s advanced infrastructure, simplified regulations, and substantial financial backing from entities such as Saudi Venture Capital Co. These resources provide a robust foundation for startup growth.

“The regulatory environment is being streamlined to attract foreign investment, making it easier for businesses to establish and operate,” Abuonq added.




Motaz Abuonq, CEO and founder of Value Makers Studio. (Supplied)

Extensive funding opportunities are available from both private and public sectors, with many investors leaning toward innovative tech solutions, he added.

Saudi entrepreneurs find Egypt appealing due to its skilled workforce, cost efficiency, and strategic location, Abuonq explained.

Egypt’s position as a gateway to African and Middle Eastern markets and its thriving entrepreneurial community in Cairo enhances its attractiveness.

“Egypt offers a large pool of educated tech professionals and relatively lower operating costs, which are significant advantages for Saudi startups,” noted Abuonq.

Mohammed Al-Zubi, founder and managing partner of Saudi-based VC Nama Ventures, echoed Abuonq’s sentiment about Egypt’s large talent.

In an interview with Arab News, Al-Zubi explains that Nama is interested in investing in Egyptian startups due to the size of the market and the vast talent pool.




Mohammed Al-Zubi, founder and managing partner of Saudi-based VC Nama Ventures. (Supplied)

“Egypt is the biggest country in the Arab world in terms of population, and Egyptians are leaders in terms of tech talent and their price per value factor,” he said.

Abuonq further explained that the advanced entrepreneurial community in Cairo, with numerous incubators and accelerators, supports startups and fosters a collaborative environment.

“Cultural and historical ties, including a shared language and similar customs, further ease business operations and collaboration between the two countries,” he added.

Abuonq explained that despite many similarities, the two nations also share differences.

“Saudi Arabia’s decision-making process tends to be more conservative and time-consuming due to multiple approval layers, while Egypt’s regulatory environment, although stable, includes bureaucratic challenges,” Abuonq stated.

“Saudi Arabia is reforming its business laws to attract foreign investment, but navigating these changes can be complex,” he added.

Conversely, Egypt’s regulatory environment may be more stable, but it will also face bureaucratic hurdles.

Intellectual property protection is another differentiator, with Saudi Arabia enhancing its laws under Vision 2030, providing better safeguards for technological innovations compared to Egypt, Abuonq explained.

Nama Ventures has successfully navigated the cultural and regulatory differences between the two countries, facilitating seamless investments in Egyptian startups.

“In terms of Nama, we have been able to seamlessly invest in Egyptian startups just as we do with Saudi startups, in terms of investing using standard investment instruments at the holding level and then having these holding companies own the operating companies in Egypt almost 100 percent,” Al-Zubi said.

Glowing case studies

Success stories exemplify the potential for cross-border entrepreneurship.

“Egyptian startup EYouth has become a notable educational partner for Saudi institutions, while Saudi companies like Mrsool and Foodics have successfully penetrated the Egyptian market, capturing significant market shares and becoming well-known brands,” Abuonq said.

These examples highlight the unique opportunities each market offers. In Saudi Arabia, large projects such as NEOM and Red Sea Global create avenues for AI, renewable energy, and smart city solutions, he added.

Egypt, with its youthful population and numerous innovation hubs, is a fertile ground for new technologies.

“A large segment of young people in Egypt are ready to adopt new technologies, and numerous innovation centers and business incubators support startup growth,” Abuonq said.

Success stories, such as Egyptian last-mile company ShipBlu, demonstrate the potential for cross-border entrepreneurship. Al-Zubi highlighted ShipBlu as an example of a great bet by Nama Ventures, attributing its success to the complementary nature of its leadership team.

Several startups have announced plans to expand to the Saudi market this year with the latest being Egypt’s e-commerce marketplace Kemitt.

In February, Egyptian fintech Khazna also announced its plans to enter the Saudi market through a partnership with Khwarizmi Ventures.

Two months later, Egyptian group-buying startup Waffarha secured a seven-figure seed round from VMS, enabling it to initiate its plans to expand to the Saudi market.

Egypt’s artificial intelligence firm Intella has also seen significant growth in the Kingdom, enough to relocate its headquarters to Saudi Arabia.

In an interview with Arab News last year, Nour Taher, CEO of Intella, said that the Kingdom is becoming a hub for tech companies.

“Saudi Arabia is currently our largest market with 70 percent of our business coming from there. We have just taken the decision to relocate our HQ there to better serve our existing clients and further expand our business. We are also inspired and aligned with Saudi Arabia’s Vision 2030,” she said.

Crossing the bridge

To address expansion challenges, thorough market research, regulatory compliance, and cultural adaptation are essential.

Abuonq emphasized the importance of building partnerships and hiring local consultants to navigate regulations.

“Understanding local consumer behavior and adapting business strategies to align with cultural differences are crucial for success,” he advised.

Building partnerships with local companies can facilitate market entry while hiring local legal and business consultants can help navigate regulations and ensure compliance with the law, he explained.

Enhancing partnerships between the Saudi and Egyptian tech ecosystems requires strategic initiatives such as bilateral trade agreements, transnational incubators, and joint ventures, as well as cultural exchange programs and joint innovation platforms.

“Governments and organizations should facilitate cross-border operations and create platforms for startups to collaborate and share technological advancements,” Abuonq suggested.

He added that joint ventures and partnerships between companies from both countries can leverage strengths and market insights, and cultural exchange programs can promote understanding and collaboration among entrepreneurs and tech professionals.

In his experience assisting Egyptian tech entrepreneurs in Saudi Arabia, Abuonq identified regulatory navigation, market adaptation, and cultural sensitivity as primary challenges.

Helping startups understand and comply with complex and evolving regulations in Saudi Arabia is crucial, as is assisting them in adapting their products and services to meet local market needs and consumer behavior.

“Ensuring startups are culturally sensitive and adaptable in their business practices is another significant challenge,” he noted.

For Al-Zubi, fostering stronger partnerships between the Saudi and Egyptian tech sector involves enhancing exposure to each country’s entrepreneurial landscape.

“Any effort that strengthens exposure to each ecosystem’s startups is a positive effort in our opinion,” he stated, aligning with the strategic initiatives suggested by Abuonq.

Addressing the challenges and opportunities in assisting Egyptian startups expanding into Saudi Arabia, Al-Zubi emphasized the importance of a strong foundation.

“I would highly encourage Egyptian startups to scale to Saudi from a position of strength, not weakness,” he advised.

He further stressed the need for these startups to demonstrate success in their native market and ensure that their business models are functioning in a healthy fashion before considering expansion into Saudi Arabia. “It should be a market expansion strategy and not a migration play,” Al-Zubi added.


Saudi Arabian Military Industries appoints new CEO

Saudi Arabian Military Industries appoints new CEO
Updated 30 January 2025
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Saudi Arabian Military Industries appoints new CEO

Saudi Arabian Military Industries appoints new CEO

RIYADH: The Saudi Arabian Military Industries has announced the appointment of Thamer M. Al-Muhid as its new chief executive officer, effective Feb. 1, according to a statement released on Thursday.

The decision was confirmed during a meeting of SAMI’s board of directors, chaired by Saudi Defense Minister Prince Khalid bin Salman.

With over 30 years of global leadership experience, Al-Muhid brings extensive expertise in driving organizational transformation, operational excellence, and international expansion.

The newly appointed CEO of SAMI, Thamer M. Al-Muhid. Supplied

His diverse background encompasses strategic initiatives, mergers and acquisitions, research and development, and forging key international partnerships—all of which equip him to lead SAMI into a new phase of growth and innovation.

Before his appointment, Al-Muhid served as group CEO and managing director of Saudi Chemical Co. Holding, and has held senior leadership roles at prominent organizations such as SABIC, Almarai, and the Ministry of Commerce and Industry.

Replacing Walid Abu Khaled, Al-Muhid will oversee the company’s efforts to advance cutting-edge technologies, produce world-class defense products, and strengthen strategic partnerships.

His leadership is expected to expedite Public Investment Fund-owned SAMI’s progress toward achieving its ambitious objectives, including localizing 50 percent of the Kingdom’s defense spending and fostering national talent in the defense sector.

This appointment underscores SAMI’s ongoing commitment to positioning Saudi Arabia as a global leader in defense manufacturing and innovation.


Saudi crowdfunding platform Lendo secures $690m warehouse facility led by J.P. Morgan

Saudi crowdfunding platform Lendo secures $690m warehouse facility led by J.P. Morgan
Updated 30 January 2025
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Saudi crowdfunding platform Lendo secures $690m warehouse facility led by J.P. Morgan

Saudi crowdfunding platform Lendo secures $690m warehouse facility led by J.P. Morgan

RIYADH: Lendo, a debt crowdfunding platform in Saudi Arabia, has secured a SR2.6 billion ($690 million) warehouse facility, with J.P. Morgan serving as the lead arranger.

According to an official statement, the facility will support increased job creation within the Kingdom, underscoring Lendo’s commitment to fostering domestic economic growth and employment opportunities.

Endorsed by Fintech Saudi, this achievement highlights the rapid expansion of Saudi Arabia’s fintech sector and signals the substantial potential for small and medium-sized enterprise financing within the economy, it added.

The initiative also aligns with Saudi Vision 2030, which aims to raise SME lending from 4 percent in 2018 to 20 percent by 2030.

“This landmark facility represents a transformative moment for Lendo and the Saudi fintech ecosystem,” said Osama Alraee, CEO and co-founder of Lendo.

“The strong backing from global financial institutions such as J.P. Morgan validates our innovative approach to SME financing and positions us to significantly expand our impact in the Saudi market. This facility will accelerate our mission of driving SME growth while contributing to the Kingdom’s Vision 2030 goals.”

The statement said the facility will be strategically allocated to enhance Lendo’s lending capacity, introduce innovative financial products, and broaden the company’s coverage of SMEs across the Kingdom.

George Deves, co-head of Northern European Asset-Backed Securities at J.P. Morgan, remarked: “We are pleased to collaborate with Lendo on this landmark transaction. A robust and rapidly expanding SME sector is crucial to the local economy, and this financing will contribute to the strategic goal of boosting SME lending in Saudi Arabia.”

Moreover, the deal underscores the growing confidence of international investors in the Kingdom’s fintech sector, particularly in the strength of its regulatory framework.

Lendo has successfully completed two rounds of investment to date, with its most recent Series B funding round, raising $28 million, led by Sanabil Investments, a wholly owned subsidiary of Saudi Arabia’s Public Investment Fund.


Saudi Arabia’s flyadeal joins IATA, boosting Kingdom’s aviation growth

Saudi Arabia’s flyadeal joins IATA, boosting Kingdom’s aviation growth
Updated 30 January 2025
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Saudi Arabia’s flyadeal joins IATA, boosting Kingdom’s aviation growth

Saudi Arabia’s flyadeal joins IATA, boosting Kingdom’s aviation growth

JEDDAH: Saudi Arabia’s low-cost carrier, flyadeal, has joined the International Air Transport Association, marking a significant step in its regional and global expansion while supporting the Kingdom’s growing aviation sector.

On Jan. 29, flyadeal’s management welcomed an IATA delegation, led by Kamil Al-Awadhi, the regional vice president for Africa and the Middle East, to celebrate the milestone at the airline’s headquarters in Jeddah.

In November, flyadeal earned IATA’s Operational Safety Audit certification, the highest safety accreditation in the airline industry.

This thorough evaluation examines an airline’s operational safety, ensuring it adheres to the most rigorous standards, covering areas like aircraft engineering, maintenance, flight operations, cabin services, ground handling, cargo, and security.

Saudi Arabia is investing heavily in its aviation sector as part of the Vision 2030 initiative, which seeks to diversify the economy beyond fossil fuels, boost the private sector, and enhance global connectivity.

The country aims to accommodate 330 million passengers by 2030, serve over 250 destinations, and transport 4.5 million tonnes of air cargo.

Steven Greenway, CEO of flyadeal, expressed his pride in joining IATA, an association that has long represented the airline industry with a unified voice.

“Since our founding in 2017, our growth has been rapid, with operational safety as a top priority. Becoming an IATA member was a natural next step for us,” he said.

Greenway also highlighted flyadeal’s new position alongside Saudia, the full-service airline that has been a longstanding IATA member.

“As Saudia and IATA celebrate their 80th anniversaries this year, we are proud to be part of this milestone,” he added.

Al-Awadhi also celebrated the addition of flyadeal to IATA, noting that their membership reflects the airline’s significant role in Saudi Arabia’s aviation expansion.

“Saudi Arabia has made remarkable strides in developing a world-class aviation sector,” he said. “flyadeal’s inclusion further demonstrates the Kingdom’s commitment to enhancing connectivity and fostering sustainable industry growth.”

He also praised the government’s ambitious vision for aviation and reaffirmed IATA’s commitment to supporting Saudi Arabia’s strategy to grow a thriving aviation industry that benefits travelers, businesses, and the economy.

flyadeal, which plans to carry more than 75,000 pilgrims on dedicated international charters during this year’s Hajj season, operates from key hubs in Riyadh, Jeddah, and Dammam.

It offers nearly 30 year-round and seasonal destinations within Saudi Arabia, as well as select cities in the Middle East, Europe, and North Africa.

The airline’s fleet includes 36 Airbus A320 aircraft, and it plans to significantly expand its network over the next 12 months as part of a major international growth initiative.


Closing Bell: Saudi main index ends the week in red at 12,415 

Closing Bell: Saudi main index ends the week in red at 12,415 
Updated 30 January 2025
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Closing Bell: Saudi main index ends the week in red at 12,415 

Closing Bell: Saudi main index ends the week in red at 12,415 
  • MSCI Tadawul Index increased by 4.12 points, or 0.27%, to close at 1,544.02
  • Parallel market Nomu gained 201.99 points, or 0.65%, to close at 31,250.65

RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Thursday, losing 23.99 points, or 0.19 percent, to close at 12,415.49. 

The total trading turnover of the benchmark index was SR6.49 billion ($1.73 billion), as 139 stocks advanced, while 89 retreated.    

The MSCI Tadawul Index increased by 4.12 points, or 0.27 percent, to close at 1,544.02. 

The Kingdom’s parallel market, Nomu, rose, gaining 201.99 points, or 0.65 percent, to close at 31,250.65. This comes as 45 of the listed stocks advanced, while 36 retreated. 

The best-performing stock was United Cooperative Assurance Co., with its share price surging by 7.94 percent to SR10.20. 

Other top performers included the Saudi Steel Pipe Co., which saw its share price rise by 7.33 percent to SR73.20, and Gulf General Cooperative Insurance Co., which saw a 5.91 percent increase to SR12.18. 

Bupa Arabia for Cooperative Insurance Co. saw the largest decline of the day, with its share price dropping 4.12 percent to SR186. 

CHUBB Arabia Cooperative Insurance Co. saw its shares drop by 3.59 percent to SR56.40, while The Mediterranean and Gulf Insurance and Reinsurance Co. declined 3.17 percent to SR25.95. 

On the announcements front, Jarir Marketing Co. profits slightly increased to SR974 million by the end of 2024, compared to SR973 million in the same period of 2023. 

According to a Tadawul statement, operating profit totaled SR1.05 billion in 2024, up from SR1.04 billion in the corresponding period of 2023, reflecting a 0.74 percent growth. The increase in profits was attributed to a 2.2 percent rise in total sales, driven by higher sales in the smartphone, computer, and tablet sectors. 

The company’s total profit also rose by 3.8 percent, which is higher than the sales growth due to a relative improvement in profit margins in certain departments, particularly smartphones, as a result of discounts granted by suppliers, the statement added. 

Jarir Marketing also reported that shareholders’ equity reached SR1.74 billion by the end of the period, compared to SR1.77 billion at the end of the same period last year. 

Shares of Jarir traded 1.38 percent lower in today’s trading session on the main market to close at SR12.82. 

Moreover, SNB Capital Co. serving as the lead manager of the Arabian Co. for Agricultural and Industrial Investment, announced that Entaj will proceed with an initial public offering of 9 million ordinary shares, representing 30 percent of its total share capital.  


UAE real estate market ends 2024 with record growth, led by Dubai, Abu Dhabi

UAE real estate market ends 2024 with record growth, led by Dubai, Abu Dhabi
Updated 30 January 2025
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UAE real estate market ends 2024 with record growth, led by Dubai, Abu Dhabi

UAE real estate market ends 2024 with record growth, led by Dubai, Abu Dhabi
  • Residential transactions in Abu Dhabi rose by 19%
  • Office occupancy rates in Dubai and the capital hit 945, pushing rents up by 15-20% annually

JEDDAH: The UAE’s real estate market ended 2024 on a strong note, with Dubai’s residential sales soaring 30 percent year on year to 119 billion dirhams ($32.4 billion) in the fourth quarter. 

According to CBRE Middle East’s latest market review, property transactions surged and rental prices climbed across key sectors — commercial, residential, retail, and industrial — driven by strong economic expansion and investor demand. 

The UAE real estate market saw strong growth in 2024, driven by rising demand, limited supply, and increasing prices across residential, commercial, retail, and industrial sectors, supported by new regulations. 

This trend is part of a broader regional shift, with property markets in Saudi Arabia, Qatar, and the UAE implementing reforms to better meet global investor demand.

For example, Saudi Arabia recently allowed foreigners to invest in Saudi-listed companies that own real estate in Makkah and Madinah, following a key decision by the Kingdom’s Capital Market Authority. 

“The UAE’s real estate market continue to attract rising foreign investor interest, supporting record residential transactional volumes across Dubai and Abu Dhabi during 2024. Commercial sectors also remain buoyant, with demand largely outstripping supply, as reflected in the rising occupancy and rental rates across the office, retail and industrial markets,” said Matthew Green, head of research MENA at CBRE.  

In the fourth quarter, residential transactions in Abu Dhabi rose by 19 percent, while office occupancy rates in both Dubai and the capital city hit 94 percent, pushing rents up by 15-20 percent annually due to supply constraints. 

“Amid these highly positive market dynamics, the UAE government has moved to ensure the long-term sustainability of the real estate market, by implementing several new regulations in recent weeks,” said Green.  

He said that these changes were aimed at improving transparency through the Dubai Smart Rental Index, expanding the addressable market via recent changes to Dubai’s designated Freehold areas, and cooling the off-plan market through the UAE Central Bank’s amendment to lending regulations on transactional set-up fees. 

The UAE’s economic growth further fueled the commercial market, with Abu Dhabi’s real gross domestic product expanding by 4.5 percent in the third quarter of 2024, driven by a 6.6 percent increase in non-oil sectors. The rise in new business licenses and corporate expansions drove strong tenant demand, particularly for premium office spaces, the report added. 

Residential sector  

Dubai’s residential sector saw an 18 percent rise in apartment prices and a 20 percent increase in villa prices, pushing average values to 1,647 dirhams and 2,024 dirhams per sq. foot, respectively. Transaction volumes soared, with total residential sales in 2024 reaching 434 billion dirhams, up 33 percent from 2023, the report noted. 

Abu Dhabi’s residential market followed suit, with apartment prices rising 11 percent and villa prices climbing 12 percent. The capital’s sales activity was led by a 59 percent surge in ready property transactions, while off-plan sales grew 5 percent but still accounted for 66 percent of total volume. 

Rental contract registrations in Dubai rose 7 percent year on year, with renewal contracts up 9 percent and new registrations increasing 5 percent. Despite rising costs, CBRE noted that tenants continued to prefer lease renewals to avoid steep rent hikes.