RIYADH: A record-breaking number of venture capitalists are investing in Saudi Arabia’s thriving business environment, with the technology sector proving especially attractive, industry leaders have told Arab News.

According to the Ministry of Communications and Information Technology’s latest annual report, 2025 saw the Kingdom reach its highest record of venture capital investment — SR6.4 billion ($1.7 billion) across 257 deals.

The number is a part of larger scale investments in Saudi Arabia, coming from total technology investments of SR21.7 billion, with international investors accounting for SR7.6 billion.

The record-breaking numbers of venture capital investments are indicative of the steady and growing relevance of foreign investments in the Kingdom, with the technology sector in particular serving as an example of sustained international confidence.

Additionally, Saudi Arabia accounts for 56 percent of total venture capital investment in the region, further amplifying its position from a global standpoint.

Industry leaders speaking to Arab News have echoed the current atmosphere on the ground as one that has moved into a maturing stage as targets are reached, regulations are tightened, and investor confidence grows.

Nahim bin Moussa, investment manager at STV, provided insight on annual venture capital deployment in the Kingdom, stating: “Today, annual VC deployment stands at $1.7 billion — a 59 percent average annual growth over the past seven years — with 10 unicorns.”

He added that despite this accomplishment, a gap remains, saying: “While we witness today abundant capital for early-stage startups, there is still a critical funding gap for growth and late-stage ones estimated at $16 billion until 2030.”

The Kingdom’s position as a hub for global capital has proven itself to be momentous well into 2026. Fintech is leading the way in terms of growth and investor attraction, accounting for 40 percent of total deals in the first quarter of 2026.

Venture capitals and their sustained support for local startup companies have contributed significantly to attracting international investor attention as well as creating a regional space for talent and technology development.  Bin Moussa also highlighted the evolution of investment platforms in the Kingdom as the ecosystem matures, telling Arab News: “As the ecosystem matured, and capitalizing on a strong performance with our first fund, we have evolved into a multi-strategy platform with a non-dilutive capital NICE Fund backed by NTDP in 2024, and an Emerging Tech Fund backed by Google in 2025 with a strong focus on AI applications like Sawt.”

Faisal Al-Maklas, co-founder and CEO of Torod, a Saudi tech startup specializing in e-commerce and supply chain operations, spoke to Arab News on the direction of growth happening for tech startups in terms of international investor appetite, exit pathways, and growth indicators.

On current investor dynamics in Torod, Al-Maklas shared insights with Arab News on local to international investor distribution, saying: “Since the start of 2026, Saudi Arabia has witnessed a notable acceleration in investor interest in the startup sector, building on a cumulative growth trajectory seen in recent years.”

He added: “This momentum has attracted a broader pool of investors, both local and international, driven by the continued development of the investment environment and the maturity of business models.”

Further emphasizing the factors driving the growth in investor appetite, Al-Maklas underscored the government’s refined regulations, tying in broader Vision 2030 as an underlying factor that continues to sustain linear growth in international investor attraction to the Kingdom.

“Saudi Vision 2030 plays a central role in enhancing the Kingdom’s attractiveness to international investors. It has accelerated economic reforms, strengthened the regulatory environment, and supported innovation and entrepreneurship,” he said, adding: “The alignment of regulatory and economic factors, alongside improving exit pathways, continues to strengthen investor confidence and position Saudi Arabia as a highly competitive market both regionally and globally.”

Bin Moussa also pointed to Tabby as an example of rising international participation in the Kingdom’s startups.

https://www.arabnews.com/node/2643846/business-economy