RIYADH: Saudi startups have experienced significant growth over the past decade, raising $3.3 billion in venture capital funding, according to a report published by MAGNiTT.
The data platform provides an in-depth analysis of founders' background, experience and expertise in the 10 Years Saudi Arabia Founders Report, sponsored by Saudi Venture Capital.
“MAGNiTT published its first MENA VC Ecosystem Founders report in 2018, focused on uncovering the DNA of successful entrepreneurs in the region. Today, we partner with Saudi Venture Capital Co. and present a comprehensive report on the founders of the top 200 Saudi-funded startups over the past 10 years,” said Philip Bahosi, platform founder and CEO. .
“By highlighting the experiences of founders in the Saudi ecosystem, we hope to dispel myths surrounding founders, empower aspiring entrepreneurs looking to establish ventures in Saudi Arabia, and help guide government decision-making. We aim to guide people in developing policies that lead to innovation and provide valuable information to the people of Saudi Arabia. Investors are seeking opportunities in the region.”
SVC CEO Nabeel Koshak highlighted the remarkable growth and dynamism in the Saudi startup environment.
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44% of these startups were launched by teams of two founding members, who together secured 53% of the total funding.
Startups founded by a single individual accounted for 30 percent of funded startups, but only 15 percent of the funding received over the past decade.
Of the 400 founders analyzed, 36% had at least 10 years of work experience before launching their respective startups.
59% of founders have a technical background with an emphasis on science, technology, engineering, and mathematics.
According to research by Endeavor Insight, 39% of founders have a business degree, compared to the global average of 19%.
“Saudi Arabia’s strategic initiatives under Saudi Vision 2030 have laid a solid foundation for innovation, entrepreneurship and investment. As a result, startup activity has surged and ambitious founders have seized the opportunity. , to drive innovation across different sectors,” he said.
“The purpose of this report is to provide policymakers, government officials and investors with insights and data that will inform strategic decisions and policies to further foster the startup ecosystem over the next decade.” Koshak he added.
10 years of funding
The report, which compiles data on 200 Saudi-based startups that raised a total of $3.3 billion from 2014 to 2023, found that 44% of these startups were launched by teams of two founding members. It was revealed that the two of them secured 53% of the total funds. .
He further said that with the huge support for innovation, more unicorn companies will emerge in the Kingdom.
In contrast, startups founded by individuals accounted for 30 percent of funded startups, but only 15 percent of the funding received over the past decade.
Notably, 36 percent of the 400 founders analyzed had at least 10 years of work experience before launching their respective startups.
The report also found that there is a trend towards entrepreneurship among less experienced founders, with 66% being first-time startup founders and only 30% having previous regional startup experience. It was also shown that
This reveals a significant gender disparity in the venture capital landscape in Saudi Arabia, with male founders accounting for 94 percent of the total 400 founders, and only 6 percent female founders.
This gender gap is much wider than the global norm, with the average percentage of female founders in the ecosystem being 15%, according to Startup Genome research conducted from 2016 to 2022.
Additionally, only 7% of individual founders are women, and no startups were recorded with two or more exclusively female founders.
However, as the number of founders per startup increased, gender diversity also increased, albeit slightly. For startups with three female founders, the mixed gender ratio was 18%; for startups with four or more female founders, this figure was 12%.
Additionally, 91 percent of all-male startups received 98 percent of their total funding. Conversely, 3% of startups founded entirely by women accounted for his 0.4% of total funding.
Founder's education
The report further delves into the educational qualifications of the founders, revealing that 55 percent of Saudis have at least a bachelor's degree.
When it comes to technology development, 59% of founders have a technical background with a specialization in science, technology, engineering, or mathematics.
According to research by Endeavor Insight, 39% of founders have a business degree, compared to the global average of 19%.
More than half of our 400 founders earned their degrees internationally, and 22% earned both international and domestic degrees.
King Saud University, King Fahd University of Petroleum and Mineral Resources, and King Abdulaziz University are among the most common universities for startup founders.
Seven of the top 10 Saudi founder-funded universities were public institutions.
Saudi Arabia's top international schools for founders include Stanford University and Harvard University, reflecting global trends.
professional experience
Even though fintech is the most funded sector, only 7% of founders have a finance background, 18% have a banking background, and only 7% of founders have a background in information technology. That's low compared to 48 percent.
Furthermore, even though the e-commerce industry accounts for the highest share of deals closed by Saudi Arabia's top 200 startups at 20%, founders with e-commerce experience are even rarer, at just 12%. was.
The report also revealed that 36% of founders in Saudi Arabia are seasoned professionals with more than 10 years of experience before starting their business.
Notably, Saudi Aramco was the most common previous employer among funded founders, with 7% having worked there before launching their startup.
Additionally, McKinsey and Microsoft were among the top 10 companies that the 400 founders featured in this report previously worked for.
The majority of these founders held key leadership roles, with 31% serving as founders, co-founders, or board members. Only 4% came from entry-level positions.
The report also points out that “while multiple serial entrepreneurs have emerged in Saudi Arabia, 66 percent of founders in the past 10 years were first-time founders,” indicating that entrepreneurship is a vibrant and growing industry. Showing the house ecosystem.
