DJEDDAH: Saudi Arabia continues to focus on efforts to boost the growth of startups in the Kingdom to boost the national economy, as evidenced by the recently announced Saudi budget for 2022.
According to Saudi Finance Minister Mohammed Al-Jadaan, the largest economy in the MENA region is expected to post a surplus of SR 27 billion in 2023 and SR 42 billion in 2024.
In addition, the country’s sovereign wealth fund, the Public Investment Fund, has announced plans to invest $ 40 billion locally in 2022.
Mohammed Al-Zubi, founder and managing partner of technology-driven venture capital firm Nama Ventures, said Saudi entrepreneurs would welcome the move.
He said: “Whenever we see significant government spending in different sectors, we immediately see opportunities for startups to participate.”
“After all, if we don’t find entities willing to write checks for innovative startups, they’re not going anywhere,” he said.
The venture capitalist continued, “All areas need their fair share of attention, and different areas complement each other as they grow.
“For example, if you improve the infrastructure of your cities, those cities will absorb more citizens, which in turn will increase the demand for health care, education, entertainment and other things. We need solutions in all areas.
The ongoing initial public offering of Tadawul SR 5.02 billion and its liberalization reforms promise to ease the path for fast-growing companies seeking to be listed on the stock exchange.
Al-Zubi said, “As a venture capitalist, it’s music to our ears. The more we see the ease of listing on the public market, the more we see an opening of liquidity for our startups. This means that we don’t have to depend on strategic acquisitions abroad.
He added, “We want to see Saudi stock market listings from a new generation of high-growth tech startups to get the right exit valuations that their peers in other regions enjoy. “
Al-Zubi said Tadawul kept pace with the Dubai stock market.
He added, “I think the sheer size of the Saudi economy would ensure its fair share of the region’s total government market. “
“That being said, I think the two exchanges complement each other. Both investors and entrepreneurs will see benefits in signing up for both to attract different groups of investors. “
In an email interview, the General Authority for Small and Medium Enterprises, Monshaat, highlighted the opportunities that the 2022 budget provides for startups.
He said several government-funded initiatives will continue to support startups next year as the national economy recovers from the coronavirus disease pandemic.
Monshaat said, “Support for entrepreneurship is provided through entrepreneurial platforms (business incubators, business accelerators and coworking spaces), a government expense reimbursement program, direct and indirect loan programs for small and medium enterprises, support for fast growing SMEs and unicorns, to name a few.
“Overall, tax expenditures for startups will continue in line with the 2030 target of increasing the contribution of SMEs to 35% by 2030.”
He added that as the small business sector matures, “we need to find other solutions from best practice and best fit approach that support a trajectory from startups to high growth companies. , corporate flagships that shape the Kingdom’s value proposition as a startup destination.
Monshaat said that many business models have evolved as the health crisis eased, and some of them could take advantage of the digital economy to grow.
The organization said, “With digitization advancing rapidly, entrepreneurs can leverage these avenues to develop, deploy and thrive on new business models, effective collaborations and continued recovery.
“In doing so, the impact on employment will also be positively influenced as new sectors develop such as tourism and more traditional sectors recover.”
Al-Jadaan said the public and private sectors have worked together to reduce the unemployment rate to 11.3%, adding that the government aims to continue reducing it to 7% or less by 2030.