Opportunities For Startups
KSA: Offering Immense Support for Startups
With the startup ecosystem landscape of Kingdom of Saudi Arabia (KSA) poised for exponential growth, the Kingdom is seeing a surge in the number accelerators and incubators- organizations that support entrepreneurs.
In 2016, Saudi Arabia announced Vision 2030, a package of economic and social reforms designed to diversify the economy and shift it away from its dependence on oil, attract foreign investment and create more jobs. Raising the contribution of small and medium-sized enterprises (SMEs) to 35% by 2030 is listed as a top priority under the Vision.
For startups, the government is providing unprecedented support in terms of regulations, funding, and opening up sectors that are unexplored. To achieve the objectives of Saudi Vision 2030, the government established Monshaat, Saudi’s Small and Medium Enterprises General Authority in 2016, to regulate, support and develop the country’s SME sector, and to create and regulate incubators and accelerators. There is a huge inflow of funds into startups from venture capitalists. A strong global demand from startups wanting to expand to Saudi is evidenced.
These successful startups will boost the economy through job creation as well as opening of new sectors, and they will benefit from being in the largest market in the region. This leads to a win-win situation for all stakeholders. Startups, aprt from being a great investment, also support the economy by way of job creation and innovative solutions as well.
Wamda Research Lab (WRL), in its report of 2017, noted that the number of incubators, accelerators, co-working spaces and funds nearly tripled, growing from 13 between 2006 and 2010, to 36 between 2011 and 2015.
A number of startups with stable income and a good scale of operation with high recruiting power can be seen these days. This success is attributable to increase in seed investment programs during the past few years.
Local accelerators and incubators have been able to contribute significantly to the startup ecosystem. Additionally, many new international players have established themselves in the market.
Misk Innovation- a branch of the non-profit Misk Foundation- launched Misk 500 Startups Accelerator, a partnership with U.S.-based early-stage venture fund and seed accelerator 500 Startups that offers substantial funding to startups. Misk Foundation was founded by the Crown Prince to empower young people in Saudi Arabia and around the world. The program’s second cohort received more than 500 applications from across the globe.
Also, Saudi Arabia’s Public Investment Fund (PIF)- the kingdom’s sovereign wealth fund- set up a four billion Saudi Riyal fund (US$1 billion) to provide for capital needs, specifically for the SMEs.
A deregulation across many sectors and industries, creating opportunities for disruption, is characterizing Saudi’s economy. Industries like education, tourism, logistics, retail, e-commerce, healthcare, fintech, and construction are making significant progress in this direction.
Accelerators and incubators now have a golden opportunity to collaborate and serve the market. Therefore, the opportunities are endless in the Saudi market across all the important sectors of industry.