According to data from MAGNiTT, Saudi Arabia remained the leading recipient of venture capital funding in the MENA region for the second consecutive year. In the first half of 2024, the kingdom attracted $412 million, showing a marginal 7% decline compared to the previous year’s corresponding period.
A substantial $130 million transaction involving Salla significantly contributed to the total, representing the sole “mega-round” investment in the MENA region for 2024. Despite a slight 3% decrease in deal flow activity overall, this reinforces Saudi Arabia’s position as the second-most active country in transactions.
Nevertheless, Saudi Arabia’s dominance in the region is indisputable. Its share of total MENA VC funding has surged from 38% in the first half of 2023 to 54% in the current year. This increase has occurred even amid a more substantial 34% decline in overall funding across the MENA region.
Fintech continued to lead in terms of deal volume among investors, while e-commerce attracted the highest funding amounts. Two of the top five deals in Saudi Arabia came from this thriving sector. Investor engagement also showed encouraging trends, with the number of entities supporting Saudi startups reaching 72, up from 62 in the corresponding period last year.
This enthusiasm is not limited to local interests. The proportion of international investors increased by 17 percentage points, claiming 28% of the total VC investments in Saudi Arabia. The report underscores a rising emphasis on early-stage startups. A substantial 84% of all transactions were in early-stage investments, up from 82% the previous year. Series A funding also saw growth, climbing from 10% to 14%.
Mergers and acquisitions (M&A) activity in Saudi Arabia remained subdued in 2024, with only two transactions recorded compared to four in the corresponding period last year.
All M&A transactions occurred exclusively in the first quarter. Nonetheless, Saudi Arabia secured the second position in the MENA region for exit activity, following the UAE.