Saudi startups took the investment landscape by storm last year, securing hundreds of millions of dollars in investment throughout 2023. Bloomberg reports the Kingdom taking 52% of all tech funding, despite a near-quarter drop in the Middle East overall. This success can be accredited to a few major Saudi-headquartered startups who with their highly successful rounds were able to catapult Saudi Arabia to never-before-seen heights.
In this article, we will discuss 4 Saudi startups that dominated MENA funding in 2023. In addition to providing statistical insight into their performance, we will also delve into what sets each company apart from its competitors.
Founded in 2020 during the COVID-19 pandemic by Abdul Majid Al-Saikhan, Turki bin Zara, and Abdul Mohsen al-Babtain, Tamara has grown to become one of the top startups in Saudi Arabia. Just recently, the Goldman Sachs-backed startup was able to secure $340 million in a Series C equity funding round. This has resulted in the valuation of the company skyrocketing to $1 billion, making it the nation’s first FinTech Unicorn company in history.
Tamara is a pioneer of the BNPL (buy now, pay later) model in Saudi Arabia. BNPL is a type of short-term financing scheme under which customers may make purchases in four small, spaced-out installments with no interest charged. Their no-late-fee policy sets Tamara apart from other global companies that use this model. This allows the company to avoid interest in any form, making it a Sharia-compliant business.
A major factor for the startup’s success is its social and environmental impact. Tamara was launched in the heart of COVID, a time when many businesses went under and people were struggling to make ends meet. Through Tamara, vendors could bypass the Cash on Delivery method and allow for contactless, installment-based shopping.
In a nutshell, Tamara aims to revolutionize shopping, payments, and banking across the GCC region. Its app gives users access to over 26,000 brands selling products of all niches, as well as exclusive discounts under its Farah program. It has also recently partnered with financial services enabler Paymob to further equip SMEs in GCC.
First founded in Dubai in 2019, Tabby has grown to become one of the most recognizable shopping platforms in the Middle East. By the end of 2023, Tabby became the first FinTech unicorn company from the MENA region, reaching a valuation of $1.5 billion. This comes after the company was able to raise over $200 million in a mega Series D Round. Investors like Wellington Management, Blue Pool Capital, Mubadala Ventures, and PayPal Ventures were a part of this historic deal.
In the Fall of 2023, previously UAE-based Tabby shifted its headquarters to Riyadh ahead of its IPO on the Saudi stock exchange Tawadul. Although Tabby has a presence in many countries across the MENA region including Kuwait, Bahrain, Egypt, and Qatar, their largest demand has always been from Saudi Arabia. The company claims that approximately 80 percent of its customer base is from KSA, making the headquarters shift a strategic move to focus on its strongest market.
Like Tamara, Tabby also provides a BNPL service to its users, where purchases can be made first and paid for later in monthly installments. Tabby splits the bill of any participating store’s purchase into four interest-free monthly payments. By not charging any interest or late fees, the startup can maintain Sharia compliance. In addition, the company also provides cashback when customers shop with certain platforms like Amazon and AliExpress.
Leading online flowers and gifting e-commerce platform Floward has risen to become one of the top startups in the Middle East since its inception six years ago. Today, the company is headquartered in Saudi Arabia, but Floward’s beginnings were in Kuwait, where it was founded by entrepreneur Abdulaziz Al Loughani.
In 2023, Floward was able to raise $156 million in a Series C funding round led by Aljazira Capital, Rainwater Partners, and STV. This deal was a defining factor in KSA’s powerhouse performance in 2023 funding and is a testament to the Kingdom’s growing interest in tech startups.
According to CEO Al Loughani, Floward has experienced a near quadrupling of its valuation in just 18 months, despite changing investment landscapes in the region. The company has been able to create over 1,000 jobs in the Middle East and has partnered with over 400 brands during its tenure. Recent reports suggest that a partnership is brewing between Floward and both Goldman Sachs Group and HSBC Holdings to prepare for an IPO in Saudi Arabia.
According to their company website, Floward operates in over 40 cities across nine countries in the MENA region as well as in London, UK. Their same-day destination delivery service has even been recognized by the HRH The Governor of Riyadh for its innovation and efforts to ensure customer satisfaction.
Online grocery delivery startup Nana is one of the most successful tech startups to emerge from Saudi Arabia. Founded in August 2016 by Sami Al-Helwah, the company aims to make grocery and home essentials shopping more efficient and convenient for its customers. The increased market demand for home delivery brought on by the COVID-19 pandemic is what propelled Nana’s success, with the startup raising $18.8 million in 2020 alone.
Since then, Nana has not looked back, breaking records in order fulfillment and registered users. Moreover, the startup was able to secure $133 million in a Series C round this past year. This monumental milestone was led by Kingdom Holding Company and Uni Ventures, with other investors like Dallah Al-Barakah Group, Al-Jasser Holding, and Red Diamond Company also participating.
Nana has announced its plans to capture at least 40 percent market share by 2025, with a vision to be a part of every household in Saudi Arabia.
This year, Saudi Arabia dominated MENA funding, with a primary focus on FinTech and E-Commerce industries. Not only does the region hold magnanimous amounts of talent, but it is also a wonderful place to conduct business, as is observed by its growing market potential. At Tawaref, we actively facilitate the investment and funding of top startups in MENA, while also providing a platform for companies to land in Saudi Arabia. Such entrepreneurship and innovation are what we thrive on, and we can’t wait to see what comes next.