Saudi SME Sector Soars with Record Commercial Registrations
The Saudi Small and Medium Enterprises General Authority (Monsha'at) announced a remarkable 67% quarterly surge in commercial registrations during Q4 2024, totaling 1.6 million. Riyadh led regional registrations with 39%, followed by Makkah (17%), the Eastern Region (16%), Qassim (6%), and Aseer (5%), with the remainder spread across other areas.
Highlighting the growing emphasis on sustainability, the latest SME Monitor Report spotlights SMEs' adoption of circular economy models, renewable energy, and reforestation projects. It also underscores collaboration with government programs like the Sustainability Champions Initiative, which connects SMEs with leading firms to share expertise in green technologies and environmental tourism.
Empowering SMEs Through Knowledge and Partnerships
Rakan Alsheikh, Deputy Minister for Policies and Economic Planning, emphasized Monsha'at's role in preparing SMEs to capitalize on renewable energy and electric vehicle trends. The report features success stories from entrepreneurs and companies integrating sustainability into their operations, aligning with Saudi Arabia's broader vision for a greener economy.
Over 51,000 individuals benefited from Monsha'at Academy training, while 41,076 SMEs accessed support centers. The Jadeer service qualified 2,100 businesses, and innovation centers supported 4,258 ventures. Additionally, 205 trademarks were listed on the Franchise Center platform, reflecting expanded opportunities for entrepreneurs.
As part of its quarterly series, the SME Monitor Report serves as a vital resource for investors and stakeholders, offering insights into emerging trends and policy updates. Access the full report here .
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Arab News
2 hours ago
- Arab News
State-led startup momentum poised for sustainable growth under Vision 2030
RIYADH: Amid a record-breaking surge in venture funding and a wave of regulatory reforms, Saudi Arabia is drawing global attention for its ambitious push to build a vibrant startup economy. The Kingdom's entrepreneurial landscape is being reshaped thanks to the work of Saudi Venture Capital, a subsidiary of the National Development Fund, and incubation support from the Small and Medium Enterprises General Authority, known as Monsha'at. With government capital underwriting much of the early momentum, the challenge now lies in translating that support into private-sector-driven sustainability, with some market observers cautioning against confusing rapid growth with long-term sustainability. 'The long-term sustainability of this support will depend on continued private-sector participation and market-driven investment flows,' Philip Bahoshy, CEO of MAGNiTT, told Arab News in an interview. He accepted that sovereign-led investment vehicles have played a foundational part in catalyzing early-stage innovation, saying: 'Saudi initiatives like SVC and Monsha'at have played a critical role in expanding access to capital, fostering entrepreneurship, and developing the broader startup ecosystem.' Bahoshy cited SVC's strategy of acting as a fund-of-funds as a key mechanism for increasing market liquidity, alongside new instruments such as venture debt and private equity. These tools are designed not only to finance startups but to build institutional depth across the capital stack. Beyond financial capital, the initiatives have emphasized ecosystem development through mentorship and education. 'Another key pillar is their focus on education — whether they be in-person events or the content they share through sponsorships like MAGNiTT — to educate the market,' Bahoshy added. Monsha'at, he added, has expanded its support through physical incubators and SME-focused regulatory facilitation, helping reduce barriers for company formation and early operations. Capital drives diversification For Said Murad, senior partner at Global Ventures, these efforts are not just supportive — they are catalytic. 'SVC has invested in 54 private capital funds that invested in over 800 startups and SMEs via $3 billion in AUM (assets under management). This has resulted in entrepreneurship growth and economic diversification,' the venture capitalist told Arab News in an interview. Murad added that this flow of capital has had knock-on effects beyond startups, helping to 'drive jobs and economic growth' across sectors and enabling venture firms like his to back 'emerging technologies across platforms built by exceptional founders.' In assessing sustainability, the venture community is looking for more than just headline investment totals. Bahoshy pointed to a broadening of sector focus as a positive indicator. 'Indicators of sustainable growth include diversified sector investment, rising follow-on funding rounds, and an increasing number of successful exits,' he said. MAGNiTT's recent report with the National Technology Development Program, he noted, shows Saudi Arabia outperforming the wider Middle East and North Africa region on follow-on investment metrics — evidence of startups moving successfully through the funding pipeline. Murad emphasized deal activity and capital market maturation. 'Achieving a record number of deals in 2024 (178), which was 31 percent of MENA's total deal number, reflects positively on activity,' he said. He also cited the growing pipeline of exits and public listings, saying: 'More than 50 IPO applications are currently under review by the regulator and the exchange, showing further momentum in the Saudi market.' The increase in mergers and acquisitions transactions — up 17.4 percent year on year — suggests the market is entering a phase of consolidation and liquidity, which is critical for long-term investor confidence, he stated. Still, the pace and scale of state-backed capital injections have prompted some caution. 'Concerns about government-driven funding inflating valuations remain,' Bahoshy warned. He stressed the need to monitor startup profitability, organic market demand, and the inflow of non-government capital to guard against artificial inflation. In his view, sustainable ecosystems are those where 'startups demonstrate strong unit economics' and attract both domestic and international private capital. Murad agreed that macroeconomic indicators must be matched with real operational progress. 'From an investor's perspective, distinguishing between real market development and an overheated ecosystem requires a mix of macroeconomic signals and sector-specific insight,' he said. Those metrics include gross domestic product growth, employment contribution, and non-oil revenue gains. At a sectoral level, fintech remains a bellwether. 'In fintech, for example, sustained growth in digital payment adoption, rising financial inclusion, and tangible collaboration between fintech and incumbent banks signal structural integration rather than hype,' Murad explained. On the structural side, Saudi startups face a different set of challenges as they scale regionally and globally. While local capital and infrastructure offer a strong base, market fragmentation across the MENA region presents real operational hurdles. 'Key challenges include regulatory differences, talent mobility constraints, and fragmented market demand,' Bahoshy said. In particular, sectors such as fintech and health tech often require jurisdiction-specific compliance, which can stretch the resources of scaling companies. Murad underscored the importance of localization and talent strategy in overcoming those barriers. 'Startups operating in sectors such as fintech or health tech may find it particularly difficult to navigate differing compliance standards and approval timelines,' he said, adding that hiring local talent is often critical. 'Our portfolio company Rabbit, a hyperlocal e-commerce platform, has made the recruitment of local employees a key part of its Saudi market entry strategy,' said Murad. Despite these headwinds, both Bahoshy and Murad see a strategic shift toward long-term market integration. 'Saudi startups are increasingly positioning themselves as regional leaders within MENA,' Bahoshy said, with many expanding into the UAE, Egypt, and other Gulf Cooperation Council markets. Murad added that founders are building their businesses 'with scalability in mind,' and are 'leveraging the Kingdom's strong capital base, infrastructure, and Vision 2030 momentum to compete across borders.' Next growth phase Ultimately, the next phase for Saudi Arabia's startup ecosystem will depend on how effectively it balances public ambition with private execution. While Vision 2030 provides a powerful narrative and institutional backing, sustained impact will be measured by market maturity, depth of innovation, and the ability of startups to solve real problems across borders and sectors. As Saudi Arabia's startup ecosystem transitions from state-backed momentum to market maturity, investors and policymakers are shifting their focus from funding volume to long-term value creation. This next phase will test whether startups can scale beyond subsidized growth and become embedded drivers of innovation across sectors and borders. 'What often matters most is on-the-ground visibility: how embedded startups are in daily life, how their products are solving real problems, and how much institutional trust they've earned,' said Murad. That visibility — whether in finance, healthcare, or logistics — is increasingly seen as a litmus test for lasting impact. Startups that succeed in the Kingdom are now expected to meet regulatory standards, address market needs, and contribute to non-oil GDP. Murad pointed to the fintech sector, where startups are not only attracting investment but also becoming integral to the financial system through collaboration with banks and the adoption of digital infrastructure. He noted that alignment with national priorities, like those in the Financial Sector Development Programme, helps reinforce sector-wide progress. Regional expansion remains an important strategic goal, but the road to cross-border growth is uneven. Bahoshy pointed out that as Saudi startups expand into nearby markets, they encounter challenges such as varying regulations, limited movement of skilled talent, and inconsistent consumer demand across the region. To mitigate these challenges, firms are increasingly investing in local knowledge and partnerships rather than applying one-size-fits-all models.
Asharq Al-Awsat
2 days ago
- Asharq Al-Awsat
Saudi Arabia Strengthens Role of SMEs as Key Driver of Economic Growth
Saudi Arabia's small and medium enterprises (SMEs) are experiencing unprecedented growth, positioning themselves as a vital pillar in the Kingdom's efforts to diversify its economy and increase private sector participation, which are core goals of Vision 2030. According to the Q1 2025 report by the General Authority for Small and Medium Enterprises (Monsha'at), commercial registrations surged 48% year-on-year, reaching 154,640 new registrations in the first quarter alone. Active registrations climbed to 1.68 million, reflecting a 6% annual increase. As part of the Kingdom's accelerating digital transformation, over 41,000 active businesses now operate in e-commerce. Notably, 45% of active commercial registrations are women-owned, highlighting growing female participation in the national economy. Support from Monsha'at has been crucial to this expansion. Nearly 9,850 companies benefited from SME support centers, and over 1,400 received assistance from innovation hubs. The flagship Tomouh (Ambition) program, launched in 2017, has played a central role in financing high-growth companies, facilitating 34 listings on the parallel equity market (Nomu) with a combined market value of $450 million in 2025 alone, from a total supported portfolio of $6.6 billion. To date, Tomouh has funneled more than $15.7 billion into startups and SMEs, cementing Saudi Arabia's status as an entrepreneurial hub. Flexible Financing and Government Support In Q1 2025, the SME Bank expanded debt-based crowdfunding and launched a new 'agency model' in partnership with fintech platforms. This initiative provided flexible financing between $13,300 and $266,000, disbursing $23.4 million in its initial phase, with a target of $64 million. The Kafalah loan guarantee program also saw major expansion, issuing $3.7 billion in guarantees to 5,346 SMEs, facilitating total funding of $4.8 billion, a 17% rise from 2023. Craft industries also surged in 2025, driven by global demand for cultural goods, e-commerce growth, and initiatives like 'Made in Saudi' and 'Year of Handicrafts,' which improved artisans' access to finance, training, and global markets. The global handicraft market reached $1.22 trillion in 2025. Sector Breakdown and Impact Spokesperson Badr Al-Qadi told Asharq Al-Awsat that Riyadh accounted for 39% of commercial registrations, followed by Makkah (17%) and the Eastern Province (16%). Key growth sectors include manufacturing, fintech, tourism, entertainment, health, and e-commerce. Initiatives like Tomouh, the Nawafeth app for easy access to support services, the Jadeer procurement tool, and Monsha'at Academy for skills development have further empowered entrepreneurs. By end-2024, SMEs employed 7.86 million people, surpassing employment targets. Their contribution to GDP hit 21.9% in 2023, exceeding the 20.2% target - even amid oil production cuts - and attracting 30% of regional venture capital investment. With robust funding channels, digital integration, and inclusive policies, Saudi Arabia is advancing steadily toward making SMEs a cornerstone of its national economy and Vision 2030 strategy.
Asharq Al-Awsat
04-06-2025
- Asharq Al-Awsat
Monsha'at Showcases Saudi Arabia's Entrepreneurship Journey at Expo 2025 Osaka
Saudi Arabia underscored its growing international presence as a hub for entrepreneurship through an interactive workshop held at its pavilion during Expo 2025 Osaka in Japan. The event aimed to highlight the Kingdom's experience in supporting small and medium-sized enterprises (SMEs) and to foster opportunities for international collaboration in this vital sector. The workshop, organized by the General Authority for Small and Medium Enterprises (Monsha'at), brought together around 30 participants from various countries. Monsha'at presented its integrated ecosystem designed to empower the Kingdom's entrepreneurial landscape by simplifying business processes, boosting access to financing, promoting a culture of entrepreneurship, and encouraging innovation and the adoption of modern technologies. Key initiatives were showcased, including the Biban Forum, an international platform that connects entrepreneurs with investors, highlights Saudi success stories, and offers opportunities for professional development. This initiative plays a significant role in positioning Saudi Arabia as a global hub for entrepreneurship. Monsha'at also shared the Kingdom's experience hosting the Entrepreneurship World Cup, one of the largest global competitions in its field. The event has attracted more than 420,000 participants from 191 countries, with 500 startups advancing to the final stage. Over $5 million in cash prizes have been awarded, in addition to tailored training and development programs. The workshop is part of Monsha'at's broader participation in Expo 2025 Osaka, with the goal of promoting the Kingdom's entrepreneurial ecosystem, showcasing its strategic initiatives, and expanding international cooperation, all aligned with the objectives of Vision 2030. The Saudi Pavilion at Expo Osaka offers a multi-sensory experience centered on the Kingdom's transformative journey under Vision 2030. It highlights Saudi Arabia's commitment to enhancing quality of life through innovation and technological progress. The pavilion also features immersive experiences that reflect the richness of Saudi cities, villages, and cultural heritage. Constructed using lightweight Saudi stone, the structure was designed by renowned architects from Foster + Partners to represent the Kingdom's vision of building sustainable, empowered communities.
