Saudi Fintech Sphere Saw Massive Growth Over the Last Year

The Saudi Fintech Annual Report has revealed that the Fintech sector saw a rapid growth in the last year primarily because of a surge in venture capital investments.

The Saudi Fintech Annual Report 2021 revealed that the Saudi Fintech Industry has seen a tremendous surge in venture capital investments, with almost $157.2 Million being made across the sector in the past year. Following are a few excerpts from the report:

“Over the last decade, the global fintech industry has seen some of the fastest rates of growth in venture capital investment. The previous annual record for global venture activity in fintech was $53bn in 2018. To date, global venture activity in 2021 has already exceeded $80bn, an increase of 56% from the previous record.

2021’s record rate of fintech investment can be attributed to three main factors:

– The accelerated digitalization as a result of the COVID-19 pandemic has led to a surge in demand for fintech solutions and a subsequent growth in both their market share and enterprise value. In particular the pandemic has resulted in a growth in demand for easier to use financial tools in areas such as buy-now, paylater and investment brokering solutions.

– The maturation of multiple major payment companies that are raising record levels of investment to expand across geographies and achieve commanding market positions.

– Pent up demand to deploy capital and grow after a period when the global economy was in lockdown.

2021 has seen the most equitable distribution of venture investment counts, with 46% of investments at the growth stage (Series A and B), 38% at the seed stage, and 15% at the pre-seed stage. This demonstrates that investment is available to support fintech companies at every stage of their development.

In particular, there has been an increase in the level of seed stage and pre-seed stage investment. To date in 2021, over $12.9m has been invested in seed stage and pre-seed stage investment which is a 108% increase from the $6.2m invested in 2020. Whilst investment at the seed stage and pre-seed
stage is expected to continue, this also provides a runway for more fintech companies to reach Series A and above and therefore investment at the growth stage is also expected to increase.

Within fintech in Saudi Arabia, payments remain the most popular area of investment, accounting for close to 93% of all venture capital invested in 2021. Investments were made across the payments landscape including Point of Sale (POS) services, mobile payments and buy-now, pay-later. These
included Series A investments in mobile payments platform Hala ($6.5m) and buy-now, pay-later provider Tamara ($110m) and a Series B investment in the restaurant POS provider Foodics ($20m).”

Excerpts from the Saudi Fintech Annual Report 2021

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