Saudi startup boom creates ‘entrepreneurial bridge’ with Egypt

Saudi startup boom creates ‘entrepreneurial bridge’ with Egypt
The Saudi market, characterized by its large size and high consumer purchasing power, presents lucrative opportunities for tech startups. Shutterstock
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Updated 10 November 2024
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Saudi startup boom creates ‘entrepreneurial bridge’ with Egypt

Saudi startup boom creates ‘entrepreneurial bridge’ with Egypt

RIYADH: Saudi Arabia’s thriving startup ecosystem has created an entrepreneurial bridge with neighboring countries, attracting a growing number of founders to the nation.

This trend is particularly pronounced among Egyptian tech entrepreneurs, drawn by market potential, government initiatives, and abundant funding opportunities.

The Saudi market, characterized by its large size and high consumer purchasing power, presents lucrative opportunities for tech startups.

Additionally, Vision 2030 and various entrepreneurship support programs have fostered a stimulating environment for innovation.

“Saudi Arabia’s government initiatives and funding opportunities are major attractors for Egyptian tech entrepreneurs,” Motaz Abuonq, CEO and founder of Value Makers Studio, told Arab News.

VMS is a Saudi-based venture studio that supports Egyptian and regional startups with funding opportunities and consulting to boost their entry into the Kingdom.

The entrepreneurial bridge

Abuonq explained that Egyptian entrepreneurs benefit from Saudi Arabia’s advanced infrastructure, simplified regulations, and substantial financial backing from entities such as Saudi Venture Capital Co. These resources provide a robust foundation for startup growth.

“The regulatory environment is being streamlined to attract foreign investment, making it easier for businesses to establish and operate,” Abuonq added.




Motaz Abuonq, CEO and founder of Value Makers Studio. (Supplied)

Extensive funding opportunities are available from both private and public sectors, with many investors leaning toward innovative tech solutions, he added.

Saudi entrepreneurs find Egypt appealing due to its skilled workforce, cost efficiency, and strategic location, Abuonq explained.

Egypt’s position as a gateway to African and Middle Eastern markets and its thriving entrepreneurial community in Cairo enhances its attractiveness.

“Egypt offers a large pool of educated tech professionals and relatively lower operating costs, which are significant advantages for Saudi startups,” noted Abuonq.

Mohammed Al-Zubi, founder and managing partner of Saudi-based VC Nama Ventures, echoed Abuonq’s sentiment about Egypt’s large talent.

In an interview with Arab News, Al-Zubi explains that Nama is interested in investing in Egyptian startups due to the size of the market and the vast talent pool.




Mohammed Al-Zubi, founder and managing partner of Saudi-based VC Nama Ventures. (Supplied)

“Egypt is the biggest country in the Arab world in terms of population, and Egyptians are leaders in terms of tech talent and their price per value factor,” he said.

Abuonq further explained that the advanced entrepreneurial community in Cairo, with numerous incubators and accelerators, supports startups and fosters a collaborative environment.

“Cultural and historical ties, including a shared language and similar customs, further ease business operations and collaboration between the two countries,” he added.

Abuonq explained that despite many similarities, the two nations also share differences.

“Saudi Arabia’s decision-making process tends to be more conservative and time-consuming due to multiple approval layers, while Egypt’s regulatory environment, although stable, includes bureaucratic challenges,” Abuonq stated.

“Saudi Arabia is reforming its business laws to attract foreign investment, but navigating these changes can be complex,” he added.

Conversely, Egypt’s regulatory environment may be more stable, but it will also face bureaucratic hurdles.

Intellectual property protection is another differentiator, with Saudi Arabia enhancing its laws under Vision 2030, providing better safeguards for technological innovations compared to Egypt, Abuonq explained.

Nama Ventures has successfully navigated the cultural and regulatory differences between the two countries, facilitating seamless investments in Egyptian startups.

“In terms of Nama, we have been able to seamlessly invest in Egyptian startups just as we do with Saudi startups, in terms of investing using standard investment instruments at the holding level and then having these holding companies own the operating companies in Egypt almost 100 percent,” Al-Zubi said.

Glowing case studies

Success stories exemplify the potential for cross-border entrepreneurship.

“Egyptian startup EYouth has become a notable educational partner for Saudi institutions, while Saudi companies like Mrsool and Foodics have successfully penetrated the Egyptian market, capturing significant market shares and becoming well-known brands,” Abuonq said.

These examples highlight the unique opportunities each market offers. In Saudi Arabia, large projects such as NEOM and Red Sea Global create avenues for AI, renewable energy, and smart city solutions, he added.

Egypt, with its youthful population and numerous innovation hubs, is a fertile ground for new technologies.

“A large segment of young people in Egypt are ready to adopt new technologies, and numerous innovation centers and business incubators support startup growth,” Abuonq said.

Success stories, such as Egyptian last-mile company ShipBlu, demonstrate the potential for cross-border entrepreneurship. Al-Zubi highlighted ShipBlu as an example of a great bet by Nama Ventures, attributing its success to the complementary nature of its leadership team.

Several startups have announced plans to expand to the Saudi market this year with the latest being Egypt’s e-commerce marketplace Kemitt.

In February, Egyptian fintech Khazna also announced its plans to enter the Saudi market through a partnership with Khwarizmi Ventures.

Two months later, Egyptian group-buying startup Waffarha secured a seven-figure seed round from VMS, enabling it to initiate its plans to expand to the Saudi market.

Egypt’s artificial intelligence firm Intella has also seen significant growth in the Kingdom, enough to relocate its headquarters to Saudi Arabia.

In an interview with Arab News last year, Nour Taher, CEO of Intella, said that the Kingdom is becoming a hub for tech companies.

“Saudi Arabia is currently our largest market with 70 percent of our business coming from there. We have just taken the decision to relocate our HQ there to better serve our existing clients and further expand our business. We are also inspired and aligned with Saudi Arabia’s Vision 2030,” she said.

Crossing the bridge

To address expansion challenges, thorough market research, regulatory compliance, and cultural adaptation are essential.

Abuonq emphasized the importance of building partnerships and hiring local consultants to navigate regulations.

“Understanding local consumer behavior and adapting business strategies to align with cultural differences are crucial for success,” he advised.

Building partnerships with local companies can facilitate market entry while hiring local legal and business consultants can help navigate regulations and ensure compliance with the law, he explained.

Enhancing partnerships between the Saudi and Egyptian tech ecosystems requires strategic initiatives such as bilateral trade agreements, transnational incubators, and joint ventures, as well as cultural exchange programs and joint innovation platforms.

“Governments and organizations should facilitate cross-border operations and create platforms for startups to collaborate and share technological advancements,” Abuonq suggested.

He added that joint ventures and partnerships between companies from both countries can leverage strengths and market insights, and cultural exchange programs can promote understanding and collaboration among entrepreneurs and tech professionals.

In his experience assisting Egyptian tech entrepreneurs in Saudi Arabia, Abuonq identified regulatory navigation, market adaptation, and cultural sensitivity as primary challenges.

Helping startups understand and comply with complex and evolving regulations in Saudi Arabia is crucial, as is assisting them in adapting their products and services to meet local market needs and consumer behavior.

“Ensuring startups are culturally sensitive and adaptable in their business practices is another significant challenge,” he noted.

For Al-Zubi, fostering stronger partnerships between the Saudi and Egyptian tech sector involves enhancing exposure to each country’s entrepreneurial landscape.

“Any effort that strengthens exposure to each ecosystem’s startups is a positive effort in our opinion,” he stated, aligning with the strategic initiatives suggested by Abuonq.

Addressing the challenges and opportunities in assisting Egyptian startups expanding into Saudi Arabia, Al-Zubi emphasized the importance of a strong foundation.

“I would highly encourage Egyptian startups to scale to Saudi from a position of strength, not weakness,” he advised.

He further stressed the need for these startups to demonstrate success in their native market and ensure that their business models are functioning in a healthy fashion before considering expansion into Saudi Arabia. “It should be a market expansion strategy and not a migration play,” Al-Zubi added.


British Airways reverses plan to axe Bahrain flights amid outcry

British Airways reverses plan to axe Bahrain flights amid outcry
Updated 6 sec ago
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British Airways reverses plan to axe Bahrain flights amid outcry

British Airways reverses plan to axe Bahrain flights amid outcry
  • Ex-UK defense secretary: Cancelation would have sent ‘totally the wrong message’
  • Decision to scrap Kuwait route remains ‘under review’

LONDON: British Airways has reversed a decision to scrap direct flights to Bahrain following a backlash, the Daily Mail reported.

However, flights to nearby Kuwait are still set to be suspended in March as part of previous plans aimed at tackling financially unviable flights at the airline.

Earlier this month, the Mail reported that BA had planned to cancel the Bahrain and Kuwait routes after almost a century of service.

The Gulf states have long had close ties to Britain, and the decision reportedly angered officials in Manama. Airline staff who served on the two routes were also set to lose their jobs.

Though the Kuwait route axing remains “under review,” the initial decision to cancel the Bahrain route would have sent “totally the wrong message” about the UK’s diplomatic stance toward the Gulf region, former Defense Secretary Liam Fox told the Mail.

Thousands of residents in Bahrain with close ties to the UK launched a petition demanding that the route remain available.

Bahrain hosts a Royal Navy base at Mina Salman Port, and the country has long had close commercial and trade ties with the UK.

BA said in a statement: “Following discussions with our partners and stakeholders, we can confirm we will operate a service between London Heathrow and Bahrain International Airport three times a week from the start of the summer 2025 season. This will increase to a daily service from the start of the Winter 2025 season.”

BA’s predecessor Imperial Airways first launched flights to Bahrain in 1971.

Manama became a key financial hub in the Gulf partly due to the presence of London-based Standard Chartered, which set up the country’s first bank in 1920.

Bahrain’s sovereign wealth fund, the Mumtalakat, owns McLaren, the UK luxury automotive manufacturer.

The fund plans to expand its British holdings through a series of investments, the Mail reported earlier this year.

The UK is also negotiating a free trade deal with the Gulf Cooperation Council, which includes Bahrain and Kuwait.

The six GCC countries combined represent the UK’s fourth-largest export market after the US, the EU and China.

Mohamed Yousif Al-Binfalah, chief of the Bahrain Airport Co., said: “We are delighted to witness British Airways continue operations at Bahrain International Airport.

“As the oldest airline operating out of Bahrain for over 92 years, the enduring partnership with British Airways is a testament to our shared commitment to excellence.”


Saudi GDP to receive $3bn boost after raft of deals at Local Content Forum

Saudi GDP to receive $3bn boost after raft of deals at Local Content Forum
Updated 39 min 12 sec ago
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Saudi GDP to receive $3bn boost after raft of deals at Local Content Forum

Saudi GDP to receive $3bn boost after raft of deals at Local Content Forum

RIYADH: Saudi Arabia launched initiatives and signed 15 agreements at the Local Content Forum, boosting domestic industries with an estimated SR12.4 billion ($3.3 billion) impact on gross domestic product. 

The deals, signed on the first day of the three-day event in Riyadh, span multiple strategic sectors, including manufacturing, technology, and transportation. 

The Local Content and Government Procurement Authority launched several initiatives aimed at driving the localization of key industries, aligning with broader economic goals. 

The agreements include partnerships designed to localize manufacturing, transfer knowledge, and foster innovation, the Saudi Press Agency reported. 

Key deals included:  

  • Two agreements with Saudi National Automotive Manufacturing Co. to localize and transfer knowledge for multi-purpose vehicles and light transport vehicles. 
  • Five agreements with NAFFCO for the localization of firefighting products, including dry powder extinguishers, trailer-mounted pumps, complete personal breathing devices, various types of fire extinguishers, and fire hoses. 
  • Agreements with Alfanar and Hewlett Packard Enterprise to localize and transfer knowledge for data center servers. 
  • A deal with InnovEra to localize manufacturing and knowledge transfer of directional devices. 
  • An agreement with Al-Salah Arabia to localize the manufacturing of bridge expansion joints. 
  • A partnership with Saffen Co. for the localization of oxygen sensor production. 
  • A deal with SAJA Pharmaceutical Co. for the production of “Empagliflozin.” 
  • An agreement with Coastal Co. to localize stadium seat manufacturing. 

Wattenha program 

Sadara Chemical Co. launched its “Wattenha” program, highlighting its contribution to Saudi Arabia’s localization efforts. The program aims to support domestic suppliers, develop human capital, and enhance manufacturing capabilities. 

In the first half of 2024, Sadara reported a local content rate of 50.25 percent, surpassing industry benchmarks, with SR3 billion spent on Saudi procurement.

Locally manufactured products made up 43 percent of its offerings, and Saudization reached 77.8 percent, according to a press release. 

A notable achievement is Sadara’s pipeline system connecting its facilities to the PlasChem complex, which supplies critical raw materials like ethylene oxide and propylene oxide, reducing costs and reliance on imports. 

Logistics and transportation 

Saudi Arabia Railways, in partnership with LCGPA, launched a SR15 billion Saudization program in the sector. This initiative, unveiled by Minister of Transport and Logistics Saleh Al-Jasser, aims to localize manufacturing, boost operational efficiency, and create up to 3,000 jobs by 2030. 

The minister emphasized that this program reflects the partnership between SAR and the private sector, in collaboration with the LCGPA, according to SPA. 

Automotive manufacturing 

The forum also highlighted the Kingdom’s plans for the automotive industry, including the goal to produce 500,000 vehicles annually by 2030. 

Ongoing negotiations with Hyundai underline Saudi Arabia’s commitment to becoming a hub for automobile manufacturing. 

The Global Supply Chain Resilience Initiative, valued at SR100 billion, is driving 95 strategic projects, with a focus on value chain development and export promotion. Additionally, three automotive manufacturing complexes were announced, furthering the localization of this critical sector. 

Diverse initiatives 

The forum featured discussions on the future of local content in industries such as agriculture, energy, and industrial services. Programs introduced by the LCGPA aim to reduce reliance on imports, enhance local supply chain resilience, and foster innovation. 

The “Golden Category” of the Made in Saudi program was also launched, aimed at integrating local suppliers into global supply chains and highlighting Saudi-made products on the world stage. 

The initiative, overseen by the Saudi Export Development Authority, promotes local products and supports exports. 

Minister of Investment Khalid Al-Falih emphasized that local content is a crucial driver of the economy, impacting key industries such as energy, industry, and tourism, among others. 

He highlighted that achieving growth targets requires a highly competitive investment climate, with the private sector playing a vital role in boosting the Kingdom’s exports while meeting the demands of its growing economy. 

Minister of Industry and Mineral Resources Bandar bin Ibrahim Alkhorayef further emphasized the importance of locally produced products that offer high quality and competitive advantages as a key requirement for achieving local content goals and maximizing its economic impact. 

During his remarks at the forum, Alkhorayef stated that local content is one of the central pillars for achieving Saudi Arabia’s Vision 2030, as its development directly influences the execution of the initiative’s programs. 

Alkhorayef also discussed the significant role of the private sector in advancing local content development, noting that the LCGPA implements local content through fostering strategic partnerships and facilitating the Local Content Coordination Council. 

This council includes several major national companies, which have worked closely with the authority to increase local content in their operations and procurements.


Saudi’s Hail region welcomes over 1.1m tourists in H1

Saudi’s Hail region welcomes over 1.1m tourists in H1
Updated 21 November 2024
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Saudi’s Hail region welcomes over 1.1m tourists in H1

Saudi’s Hail region welcomes over 1.1m tourists in H1
  • Licensed hospitality facilities in Hail now offer around 2,600 rooms

RIYADH: Saudi Arabia’s Hail region welcomed over 1.1 million tourists in the first half of 2024, including 170,000 international visitors, reflecting the Kingdom’s growing appeal as a travel hub.

The Ministry of Tourism reported that over 907,000 visitors were domestic travelers, showcasing the region’s popularity among residents.

Licensed hospitality facilities in Hail now offer around 2,600 rooms, meeting growing demand.

The surge aligns with Saudi Arabia’s Vision 2030 goals to enhance tourism infrastructure and attract global travelers to the Kingdom.


Saudi entertainment sector to create 450,000 jobs by 2030: Investment ministry

Saudi entertainment sector to create 450,000 jobs by 2030: Investment ministry
Updated 21 November 2024
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Saudi entertainment sector to create 450,000 jobs by 2030: Investment ministry

Saudi entertainment sector to create 450,000 jobs by 2030: Investment ministry
  • Kingdom issued 34 investment licenses in the entertainment industry in the third quarter of the year
  • It also hosted 26,000 events in the past five years, attracting over 75 million attendees

RIYADH: Saudi Arabia’s entertainment sector is expected to create 450,000 jobs and could contribute 4.2 percent of the country’s gross domestic product by 2030, according to a new report. 

In its latest release, the Kingdom’s Ministry of Investment said that Saudi Arabia issued 34 investment licenses in the entertainment industry in the third quarter of the year, representing a rise of 13 percent compared to the previous three months. 

The ministry added that the total number of investment licenses issued in the entertainment sector from 2020 until the end of the third quarter reached 303. 

“In line with Saudi Vision 2030, Saudi Arabia aims to diversify its economy and enhance the quality of life by promoting tourism and Saudi culture internationally to attract visitors. The entertainment sector is a crucial pillar in achieving these ambitious goals, focusing on enhancing the quality of life through various cultural and entertainment activities,” said the Ministry of Investment. 

The rapid progress of the entertainment sector aligns with the Kingdom’s Vision 2030 goals, which are to reduce the country’s decades-long dependence on crude revenues. 

In 2016, Saudi Arabia established the General Entertainment Authority to boost the entertainment and leisure industry. Since then, the Kingdom has witnessed notable developments, including reopening cinema halls in 2018.

According to the report, Saudi Arabia issued 2,189 licenses in the entertainment sector over the past five years. 

The Kingdom also hosted 26,000 events in the past five years, attracting over 75 million attendees. 

The ministry added that the growing entertainment sector is also catalyzing the growth of the tourism sector in the Kingdom. 

The report said that the number of inbound tourists in the entertainment industry reached 6.2 million in 2023, representing a rise of 153.3 percent compared to 2022. 

Inbound tourist spending in the entertainment industry reached SR4 billion ($1.07 billion) in 2023, a 29.03 percent rise from the previous year. 

“The entertainment sector is a vital and dynamic part of the Kingdom, acting as a catalyst for the tourism sector. By hosting various events and activities, it boosts tourism and attracts visitors, resulting in higher tourism spending and strengthening the local economy,” said the Ministry of Investment.

In 2023, the entertainment sector attracted 35 million local tourists, up 17 percent compared to 2022. 
Local tourists’ spending in 2023 was SR4.7 million, representing a marginal decline of 8.5 percent from the previous year. 


IMF mission concludes visit to Egypt for the 4th review of loan program

IMF mission concludes visit to Egypt for the 4th review of loan program
Updated 21 November 2024
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IMF mission concludes visit to Egypt for the 4th review of loan program

IMF mission concludes visit to Egypt for the 4th review of loan program

CAIRO: The International Monetary Fund said on Wednesday that its mission had concluded a visit to Egypt and made substantial progress on policy discussions toward the completion of the fourth review of IMF loan program.

The review, which could unlock more than $1.2 billion in financing, is the fourth under Egypt’s latest 46-month IMF loan program that was approved in 2022 and expanded to $8 billion this year after an economic crisis marked by high inflation and severe foreign currency shortages.

The IMF also said that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the exchange rate that eased imports, with its central bank reiterating its commitment to sustain a flexible exchange rate regime.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the program not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.