MENA Series showcases the overview of the startup landscape and trends for each MENA country.
Saudi Arabia’s shift away from an oil dependent economy, with the ambitious Vision 2030 goals of doubling the GDP by 2030, by building a startup friendly eco-system, an investment hub, a budding tourist destination, as well as legal and financial reforms to foster such growth, it is understandably becoming the hotspot of the MENA region.
Saudi Arabia is one of top 3 countries within the region in terms of their startup eco-system, along with Egypt and the UAE. (1) All having a youthful population of tech savvy consumers.
KEY FACTS:
- 34.7 M population
- 50.2% of the population is 25-54 years old
- $1.5T GDP (purchasing power parity)
- $44.3k GDP per Capita (2)
The vital areas of investment and development are in the following 8 sectors, to achieve Vision 2030:
- Mining & Metals
- Tourism
- Petrochemicals
- Manufacturing
- Finance
- Construction
- Healthcare
- Retail & Wholesale Trade (3)
With the tremendous growth of local accelerators/incubators, and VC’s, it is no surprise to see the rise of very successful startups. The region has witnessed the growth of Careem, which was acquired by Uber for $3.1B, Souq, which was acquired by Amazon for $580M, and Namshi by EMAAR for $129M.
Top areas of growth within the country have been FinTech, e-commerce, delivery/logistics, online learning, and tourism.
The MENA region is among the top 3 globally in terms of e-commerce growth with a 21.3% YoY.
The MENA e-commerce market grew 29% from approx. $8.5B in 2017 to $14.3B in 2019, and it is expected to continue to grow. It is forecasted to be worth $28.5B by the end of 2022. The Pandemic has shifted consumer behaviour to online shopping, banking, and virtual education, and it is here to stay.
The McKinsely Survery reported that Saudi based consumers will shift their shopping almost all online, with a growth of 50-110% (varies among sectors), with the highest (82% +) in apparel, personal care products, accessories, electronics, footwear, skin care/make-up, snacks, medicine and groceries.
With this consumer shift, we have seen the rise of q-commerce and same day deliveries, and a variety of startups taking up this market.
Sources:
- https://ussaudi.org/overview-saudi-arabia-startup-ecosystem/
- https://www.cia.gov/the-world-factbook/countries/saudi-arabia/
- https://www.mckinsey.com/~/media/mckinsey/featured%20insights/employment%20and%20growth/moving%20saudi%20arabias%20economy%20beyond%20oil/mgi%20saudi%20arabia_full%20report_december%202015.pdf