Saudi Arabia’s fintech sector is experiencing unprecedented growth, driven by digital transformation and strategic investments.
- Local fintech companies have expanded from just 10 firms in 2018 to over 200 today.
- Two home-grown unicorns, Tamara and stc pay, boast valuations exceeding $1 billion.
- The 24 Fintech conference in Riyadh showcased Saudi Arabia’s fintech ambitions to a global audience.
- Saudi Arabia plans to further bolster this sector, aiming for 525 fintech firms by 2030, creating thousands of jobs.
The Kingdom of Saudi Arabia is witnessing a remarkable surge in its fintech industry, fueled by ongoing digital transformation efforts. The fintech sector has emerged as one of the most rapidly expanding fields in the Saudi economy. Local companies have become key players in this unprecedented growth, with their numbers increasing from a mere 10 firms in 2018 to over 200 today, as reported by City AM.
Prominent among Saudi fintech firms are its two unicorns, Tamara and stc pay, both of which have exceeded the significant valuation threshold of $1 billion. These companies exemplify the innovative spirit and potential within Saudi Arabia’s burgeoning fintech landscape.
As part of its strategic growth plan, the Saudi Central Bank (SAMA) seeks to amplify the number of local fintech enterprises to 525 by the year 2030. This ambition aligns with the goal of creating 18,000 jobs for Saudi nationals, thereby contributing an estimated SAR 13.3 billion ($3.5 billion) to the nation’s GDP.
The 24 Fintech conference, held in Riyadh from September 3-5, stood as a testament to Saudi Arabia’s commitment to integrating global fintech insights with local ambitions. The event, hosted by the Saudi Central Bank, Capital Markets Authority, and the Financial Sector Development Program, attracted delegates across finance, policy, technology, investment, and academia internationally.
Annabelle Mander, Senior Vice President at Tahaluf, articulated the importance of the conference, highlighting fintech and finance as pivotal elements in Saudi Arabia’s growth strategy. Mander emphasized that the event sought to forge meaningful business connections and encourage significant investments.
This focus on innovation and connectivity was further underscored by the announcement made by 1957 Ventures, backed by Riyad Bank. The venture capital firm unveiled a substantial VC mega-fund worth SAR 800 million ($213 million), aimed at stimulating Saudi start-ups and advancing the fintech revolution.
Challenges do exist within the industry, notably in acquiring skilled talent. Emad Kashgari, CEO of 1957 Ventures, remarked on the critical need for seasoned entrepreneurs to lead new ventures. Nevertheless, Kashgari remains optimistic about Saudi Arabia’s potential to become the hub for financial technologies within the MENA region, asserting the Kingdom’s leadership in business transactions and market size.
The VC fund aims to foster economic growth, stimulate innovation, and create high-quality employment opportunities, thereby paving the way for a new generation of fintech unicorns.
A noteworthy example of innovation within the sector is Ejari, a startup that merges fintech with proptech to offer a ‘rent now, pay later’ service. The company recently won the 24 Fintech Award, distinguishing itself from 300 other Saudi startups. Ejari’s success is attributed in part to the robust support from the Saudi government, including financial subsidies and grants.
The government’s backing is indicative of a larger trend toward increasing venture capital investments in the fintech sector, as evidenced by a 360% rise in funding in the first half of 2024 compared to the previous year. This surge underscores Saudi Arabia’s position as a leading destination for VC investments in the Middle East and North Africa.
Saudi Arabia’s fintech sector is strategically positioned for continued growth, signaling its emerging role as a global innovator.
