Saudi Arabia is expected to become a leading market for start-up exits in the Mena region, as its ecosystem continues to mature, with mergers and acquisitions, as well as initial public offerings, on the rise.
The UAE has historically topped the list, accounting for about 60 per cent of all exits in the region. But the kingdom is catching up, despite its venture market only being active in the past five years, giving venture capitalists more opportunities to get a return on their investments, analysts say.
In the first half of this year, Saudi Arabia's share of exits rose to 20 per cent, compared with 12 per cent in 2021, says Philip Bahoshy, chief executive of data platform Magnitt. Last year, the kingdom witnessed a total of nine exits, accounting for 21 per cent of the Mena region's M&A transactions and ranking second after the UAE. Start-ups usually take an average of seven years to exit, he adds.
"You are seeing more share of exits taking place in Saudi Arabia, but because Saudi’s venture has really only been active for about five years, many companies in Saudi have not hit the window for exits, relative to the rest of the Mena region," he says. "We are waiting and anticipating for exits to continue to rise in the next two to three years."
Some of the most notable exits in the kingdom include Tabby’s recent acquisition of Tweeq for an undisclosed amount, and Riyadh-based FinTech start-up Rasan, which raised $224 million from its initial public offering on the Tadawul exchange in June. Online food delivery start-up Jahez also listed on Saudi Arabia's secondary market, Nomu, in 2022, giving it a market valuation of $2.4 billion at the time.
While M&As are usually the most common exit route, Khaled Talhouni, managing partner at Nuwa Capital, expects the kingdom’s IPO space to become an increasingly viable path for start-up exits in the region.
“The key exit opportunity emanating from Saudi Arabia is the IPO route," he says. "Tadawul, and to some extent Nomu, are viable paths towards an IPO for regional tech companies. This has been made possible by the relatively recent uptick of activity on those exchanges.
"The recent public offerings of Rasan and Jahez illustrate this point and I wouldn’t be surprised if a number of new public offerings in Saudi Arabia, as well as in the UAE, are in process."
More than 13 Saudi start-ups are preparing to go public in the next two years, in large part because of the financial support they are receiving to grow their ventures, Saudi Venture Capital told media outlet Asharq News this year.
Saudi Arabia, the Arab world's largest economy, emerged as the region's most-funded country for start-ups last year. Start-ups in the kingdom raised $1.3 billion through venture capital funding, overtaking the UAE for the first time as the top destination for VC investment in the Mena region, Magnitt says. In the first half of this year, Saudi start-ups raised more than $400 million in capital, again the highest in the region, the data platform adds.
As part of Saudi Arabia’s economic diversification agenda under Vision 2030, start-ups are receiving significant support from local funds such as STV, a technology VC fund with $800 million in capital, and Sanabil, a portfolio company of the kingdom’s sovereign wealth fund, the Public Investment Fund.
Last year, STV announced a $150 million fund to accelerate the growth of technology companies in Saudi Arabia and across the region. Meanwhile, Sanabil has committed $2 billion in capital a year for private investments that support VC growth.
Eyad Albayouk, general manager of Flat6Labs in Saudi Arabia, believes the kingdom's large market, coupled with ample capital, is fuelling the growth of the venture space.
“I think it's an opportune time for a lot of people to consider liquidity events within the Saudi market. We have a few tailwinds that are helping make this happen, he says. "But the biggest tailwind, I think, is just the sheer market size, especially within the Mena context. And it definitely does have the depth in terms of financial capital to offer, whether strategic or even financial acquisition capital, for such events."
Besides liquidity, the kingdom’s updated regulations, the growing number of incubators and accelerators and the establishment of tax-free zones are all factors contributing to a maturing ecosystem, Mr Albayouk says.
The Riyadh skyline. Saudi Arabia has emerged as the region's most-funded country for start-ups last year. Reuters
“Five years ago, the exit via an IPO path was a pipe dream," he adds. "It wasn’t a consideration for those that weren’t large corporations. Today, definitely that’s very different with the ease of listings for both SMB-type businesses on the parallel market and also on the main market with larger or more mature businesses."
Mr Bahoshy says that, with start-ups in the kingdom receiving significant funding, looking for expansion opportunities inside and outside the region, and regulators focusing on tech companies that have the potential to announce IPOs, the market could become attractive for companies looking to exit. “Unlike many other jurisdictions, you have all three of those elements that are likely to benefit the exit environment for companies in Saudi,” he adds.
MATCH INFO
Uefa Champioons League semi-final:
First leg: Liverpool 5 Roma 2
Second leg: Wednesday, May 2, Stadio Olimpico, Rome
In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
How being social media savvy can improve your well being
Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.
As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.
Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.
Norlyn Torrena, a clinical nutritionist from Burjeel Hospital advises her clients to be more technologically active “most of my clients are so engaged with their phones that I advise them to download applications that offer health related services”.
Torrena said that “most people believe that dieting and keeping fit is boring”.
However, by using social media apps keeping fit means that people are “modern and are kept up to date with the latest heath tips and trends”.
“It can be a guide to a healthy lifestyle and exercise if used in the correct way, so I really encourage my clients to download health applications” said Mrs Torrena.
People can also connect with each other and exchange “tips and notes, it’s extremely healthy and fun”.
LA LIGA FIXTURES
Friday Valladolid v Osasuna (Kick-off midnight UAE)
Saturday Valencia v Athletic Bilbao (5pm), Getafe v Sevilla (7.15pm), Huesca v Alaves (9.30pm), Real Madrid v Atletico Madrid (midnight)
Sunday Real Sociedad v Eibar (5pm), Real Betis v Villarreal (7.15pm), Elche v Granada (9.30pm), Barcelona v Levante (midnight)
Visibility: Often dramatic with thick "walls" of sand
Duration: Short-lived, typically localised
Travel distance: Limited
Source: Open desert areas with strong winds
Dust storm
Particle size: Much finer, lightweight particles
Visibility: Hazy skies but less intense
Duration: Can linger for days
Travel distance: Long-range, up to thousands of kilometres
Source: Can be carried from distant regions
Jewel of the Expo 2020
252 projectors installed on Al Wasl dome
13.6km of steel used in the structure that makes it equal in length to 16 Burj Khalifas
550 tonnes of moulded steel were raised last year to cap the dome
724,000 cubic metres is the space it encloses
Stands taller than the leaning tower of Pisa
Steel trellis dome is one of the largest single structures on site
The size of 16 tennis courts and weighs as much as 500 elephants
Al Wasl means connection in Arabic
World’s largest 360-degree projection surface
Global institutions: BlackRock and KKR
US-based BlackRock is the world's largest asset manager, with $5.98 trillion of assets under management as of the end of last year. The New York firm run by Larry Fink provides investment management services to institutional clients and retail investors including governments, sovereign wealth funds, corporations, banks and charitable foundations around the world, through a variety of investment vehicles.
KKR & Co, or Kohlberg Kravis Roberts, is a global private equity and investment firm with around $195 billion of assets as of the end of last year. The New York-based firm, founded by Henry Kravis and George Roberts, invests in multiple alternative asset classes through direct or fund-to-fund investments with a particular focus on infrastructure, technology, healthcare, real estate and energy.
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
George Sainsbury of the supermarket dynasty, sugar magnate William Park Lyle and actress Dame Gracie Fields were residents in the 1930s when the street was only known as ‘Millionaires’ Row’.
Then came the international super rich, including the last king of Greece, Constantine II, the Sultan of Brunei and Indian steel magnate Lakshmi Mittal who was at one point ranked the third richest person in the world.
Turkish tycoon Halis Torprak sold his mansion for £50m in 2008 after spending just two days there. The House of Saud sold 10 properties on the road in 2013 for almost £80m.
Other residents have included Iraqi businessman Nemir Kirdar, singer Ariana Grande, holiday camp impresario Sir Billy Butlin, businessman Asil Nadir, Paul McCartney’s former wife Heather Mills.
Hunting park to luxury living
Land was originally the Bishop of London's hunting park, hence the name
The road was laid out in the mid 19th Century, meandering through woodland and farmland
Its earliest houses at the turn of the 20th Century were substantial detached properties with extensive grounds
Scoreline
Switzerland 5
UAE currency: the story behind the money in your pockets
Emirates and Etihad fly direct from the UAE to Geneva from Dh2,845 return, including taxes. The flight takes 6 hours.
The package
Clinique La Prairie offers a variety of programmes. A six-night Master Detox costs from 14,900 Swiss francs (Dh57,655), including all food, accommodation and a set schedule of medical consultations and spa treatments.
The biog
Name: Sarah Al Senaani
Age: 35
Martial status: Married with three children - aged 8, 6 and 2
Education: Masters of arts in cultural communication and tourism
Favourite movie: Captain Corelli’s Mandolin
Favourite hobbies: Art and horseback ridding
Occupation: Communication specialist at a government agency and the owner of Atelier
Favourite cuisine: Definitely Emirati - harees is my favourite dish
A worker is categorised as skilled by the MOHRE based on nine levels given in the International Standard Classification of Occupations (ISCO) issued by the International Labour Organisation.
A skilled worker would be someone at a professional level (levels 1 – 5) which includes managers, professionals, technicians and associate professionals, clerical support workers, and service and sales workers.
The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000.
