Saudi Investors Launch $200M Fund to Boost Gulf Startups

Photo : Reuters

A new investment initiative has been launched by a consortium of Saudi family offices and investors, establishing a significant fund dedicated to supporting startups in the Gulf region. Named Waad, this new venture capital fund has been allocated SAR750 million (approximately $200 million). The fund is spearheaded by Yaser AlGhamdi, who will serve as CEO, alongside prominent family offices including the AlMajed family office, known for its ownership of the Al Majdiah Group, and the AlMisfer family office, which controls the Saudi Real Estate Infrastructure Company (Binyah).

According to a statement released by Waad, the fund is positioned as the largest private investment firm in Saudi Arabia dedicated to nurturing growth-stage startups. The focus of Waad is not only on providing financial support but also on offering mentorship to emerging businesses. While the fund has attracted interest from various Gulf region investors, some families have chosen to remain anonymous.

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Saudi Arabia’s state oil giant, Aramco, continues to be a leading force in venture capital within the country. Earlier this year, Aramco announced a substantial increase in the capital allocated to its venture arms, Aramco Ventures and Wa’ed Ventures, bringing the total to $7.5 billion. This expansion reflects a broader commitment to investing in and fostering local startups.

Waad is specifically designed to assist startups across the GCC (Gulf Cooperation Council) region. The fund’s portfolio currently includes 23 companies involved in diverse sectors such as food and beverages, financial technology (fintech), and artificial intelligence (AI). One notable investment is in CanGo, a company that manufactures a high-tech “smart cane” equipped with features like phone connectivity, GPS tracking, an LED torch, and an activity tracker.

Recent data from the Mena region highlights a surge in investment activity, with $355 million allocated across 38 startups in July alone, marking a significant increase from previous months and years. The fintech sector has attracted the majority of this investment, receiving $181 million across 16 startups. However, investment in Saudi Arabia saw a decline in the most recent month, with $31 million invested in seven deals.

Despite this fluctuation, Saudi Arabia remains a central hub for venture capital in the region. Funding for Saudi startups has seen a remarkable 159 percent increase, reaching $2.36 billion in 2023. The Sovereign Wealth Fund Institute, which tracks global family offices, notes that there are 84 such offices in the Mena region, predominantly based in Saudi Arabia and the UAE. 

This robust support for startups underscores a dynamic and expanding venture capital ecosystem in the Gulf, driven by both private investors and state-backed initiatives.