Saudi VC Scene Q1 2025: $327M Invested Across 35 Deals, Fintech Dominates, AI Rises
Saudi Arabia's venture capital landscape showed continued momentum in the first quarter of 2025, recording approximately $327 million invested across 35 startup deals, according to a report by Jawlah. Fintech remained the leading sector, while significant growth was also observed in AI and emerging areas like PropTech and EdTech, reflecting increasing ecosystem maturity.
Q1 2025 Investment Snapshot
The first quarter saw 35 investment rounds closed by Saudi startups, totaling nearly $327 million (excluding direct financing and credit facilities). This performance underscores continued investor confidence despite global economic challenges. Notably, Saudi Arabia captured the largest share of regional funding value in Q1, accounting for approximately 45.8% ($327M) of the total invested in MENA, significantly ahead of the UAE (38.4%).
Fintech Remains King, But Diversification Grows
Fintech continued its reign as the dominant sector, attracting 11 deals (31.4% of total deals) and accounting for a staggering 79% of the total funding value. Key Fintech deals included:
Tabby: $160 million (Series E) - Largest deal of the quarter
Jeel Pay: $6.7 million (Pre-Series A)
RasMal Financial Technology: $4.8 million (Pre-Series A)
However, the quarter also showcased growing investment in other key sectors:
Artificial Intelligence (AI): 3 deals (including Vmind.ai, WideBot, Halo AI) totaling approx. $10 million.
Property Technology (PropTech): 3 deals, highlighted by Rize's $35 million Series A.
Logistics & Delivery: Notable deal for Torod ($11.1 million Series A) alongside others like PieShip and AJLK.
Construction Technology (ConTech): Featured BRKZ's $17 million Series A.
Educational Technology (EdTech): Highlighted by Malaa.me's $28 million Series B.
Funding Stages: Early Stage Leads Activity, Late Stage Shows Maturity
Investment activity was spread across various stages, indicating a dynamic ecosystem:
Pre-Seed: 15 deals (35.7%)
Seed: 11 deals (26.2%)
Pre-Series A: 5 deals (11.9%)
Series A: 4 deals (9.5%)
Series B and beyond: 3 deals (7.1%)
While early-stage deals (Pre-Seed and Seed) constituted the majority by count (~62%), the presence of significant later-stage rounds, particularly Tabby's Series E, signals growing maturity within the Saudi startup landscape.
Key Trends Shaping the Market
Several trends influenced the investment scene in Q1 2025:
Ongoing impact of SAMA's digital transformation strategy in finance.
Strong consumer demand for Buy Now, Pay Later (BNPL) solutions.
Increased adoption of specialized AI applications in industry, finance, health, and Arabic NLP.
Evolution of e-commerce models (social commerce, cross-border) and logistics (automation, same-day delivery).
A supportive regulatory environment, including SAMA's fintech sandbox.
Top Investors and M&A Activity
The quarter saw activity from numerous investors. Firms participating in 3 or more deals included Wa'ed Ventures, Raed Ventures, and JOA Capital. Other active investors included Impact46, Nama Ventures, STV, Sanabil, SEEDRA, Shorooq Ventures, and many others participating across various stages. The report also noted several acquisitions, such as Salla acquiring SWEPLY and Foodics acquiring solo.
Opportunities and Challenges Ahead
The report highlights significant opportunities and challenges for the Saudi ecosystem:
Opportunities: Large domestic consumer market, high demand for digital solutions, unique prospects from giga-projects (NEOM, Qiddiya, Roshn), growth in the Green Economy, and potential for regional/global expansion.
Challenges: A potential funding gap at later stages (Series C+), shortage of specialized tech talent (AI, cybersecurity), increasing regional competition, hurdles to global expansion, and the need for regulations to keep pace with emerging tech.
Looking Ahead
The first quarter of 2025 demonstrates remarkable development in Saudi Arabia's venture capital ecosystem. Driven by Vision 2030, continued government support, evolving regulations, and active private sector participation, the startup sector is poised for continued growth. While challenges remain, particularly around late-stage funding and talent, Saudi startups are increasingly becoming key drivers of innovation and economic diversification for the Kingdom.
Source: Jawlah