Family Offices Reshape the Startup Landscape in Saudi Arabia

May 13, 2025

Kholoud Hussein

 

Saudi Arabia’s startup ecosystem is undergoing a seismic shift—and at the center of this transformation are family offices, once risk-averse entities that are now actively funding innovation. In a region traditionally dominated by oil wealth and conservative asset allocations, family-owned conglomerates are beginning to see the long-term strategic value of investing in startups. As the Kingdom aggressively pursues economic diversification under Vision 2030, family offices are stepping up with capital, networks, and strategic support—playing a growing role in nurturing local innovation and technology.

 

In 2023 alone, startups in Saudi Arabia raised over $1.38 billion across 144 deals, according to MAGNiTT. While government-backed initiatives like the Public Investment Fund (PIF) and institutions such as the Saudi Venture Capital Company (SVC) have played a critical role, an increasing share of early- and growth-stage funding is now coming from wealthy family offices with deep roots in the Kingdom’s industrial and trading history.

 

These families—who once dominated sectors like construction, hospitality, and retail—are now investing in fintech, healthtech, e-commerce, and clean energy startups. Their participation is reshaping how capital flows in the region, breaking away from reliance on state-backed entities and fostering a more dynamic, private sector–led innovation economy.

 

As Abdulrahman Tarabzouni, CEO of STV (Saudi Technology Ventures), put it: “We’re seeing a historic shift. Family offices that once waited for proven opportunities are now joining in early—building the ecosystem from within rather than watching from the sidelines.”

 

A New Investment Paradigm

Historically, Saudi family offices have favored stable asset classes such as real estate and fixed income. However, a recent report indicates that 58% of MENA family groups are now active in venture capital, with 50% engaging in early-stage investments like angel and seed funding, and another 50% participating in growth-stage opportunities. 

 

This transition is largely attributed to the younger generation of family office leaders who are more tech-savvy and open to innovation. Paula Tavangar, Chief Investment Officer at Injaz Capital, notes, “Younger family members are more tech-savvy and comfortable investing in emerging technologies.” 

 

Strategic and Sector-Specific Investments

The Saudi family office model is rapidly evolving. For decades, these offices primarily focused on wealth preservation, allocating capital into predictable, lower-risk investments such as real estate, public equities, and fixed-income instruments. But in recent years, especially post-pandemic, a confluence of generational change, macroeconomic pressure, and government incentives has pushed many of them toward venture capital.

 

A 2024 report by Strategy& Middle East (PwC) found that 58% of family offices across the Gulf are now active in startup investments, with nearly half of those involved in early-stage funding. In Saudi Arabia specifically, these investments are no longer seen as speculative side projects—they are becoming central to long-term strategic planning.

 

Part of the shift is generational. Younger members of Saudi business dynasties, often educated abroad and exposed to global tech trends, are influencing investment priorities. These new decision-makers are more comfortable with higher-risk, higher-reward asset classes. They’re also keen to support local entrepreneurship and position their families as drivers of economic transformation.

 

“We’re no longer just buying land or stock portfolios,” said Lina AlMaeena, a board member of one of Saudi’s prominent family businesses and a vocal advocate for tech innovation. “We’re building the next generation of Saudi industry—from fintech to agritech.”

 

Another factor is alignment with Vision 2030, the Kingdom’s national transformation plan. Family offices are increasingly directing capital into sectors prioritized by the government, such as health, renewable energy, education, logistics, and tourism—leveraging both their capital and their business networks to help these sectors grow. Some are even partnering with government accelerators and sovereign funds to co-invest in Saudi-born startups.

 

One standout example is Rassanah Capital, a family office that has co-invested in logistics startup Barq EV, a last-mile electric delivery vehicle company, and Chefz, a food delivery app acquired by Jahez. Their investments aren’t just financial—they bring operational support, market access, and even board-level guidance.

 

Furthermore, the investment structures themselves are changing. While traditional venture capital often relies on fund vehicles with defined horizons and return targets, Saudi family offices prefer more flexible, direct investments. This gives them control, agility, and often better alignment with founders over the long term.

“These aren’t VC tourists,” said Paula Tavangar, Chief Investment Officer at Injaz Capital. “They’re building conviction in specific sectors and doubling down. They care less about ten-year IRRs and more about legacy, influence, and national impact.”

 

Strategic and Sector-Specific Investments: Aligning with Vision 2030

Saudi family offices are increasingly channeling investments into sectors that align with the Kingdom's Vision 2030 objectives, focusing on areas such as fintech, artificial intelligence (AI), enterprise software, and small-to-medium enterprises (SMEs). This strategic alignment not only supports national economic diversification goals but also leverages the unique strengths and interests of these family-run entities. 

 

In the fintech sector, Saudi Arabia has emerged as a regional leader, capturing 58% of all fintech venture capital in the Middle East and North Africa in 2023. The Kingdom's robust national strategy aims to establish 525 fintech companies by 2030, positioning it as a hub for financial innovation. Tushar Singhvi, Deputy CEO of Crescent Enterprises, emphasized this trajectory: “Saudi Arabia’s fintech sector is set for sustained growth, driven by a clear national strategy to have 525 fintech companies by 2030.” 

 

Family offices are also making significant inroads into the AI sector. The Public Investment Fund (PIF) announced plans to create a $40 billion fund focused on AI, signaling a commitment to becoming a global leader in this domain. Yasir Al-Rumayyan, Governor of PIF, stated: “Our goal is to position Saudi Arabia at the forefront of technological innovation. By investing in AI and other emerging technologies, we are not only diversifying our economy but also creating opportunities for future generations.” 

 

Enterprise software is another area attracting attention. As Saudi companies scale up and strive for global competitiveness, there is a growing demand for enterprise systems to support digital transformation efforts. Khaled Talhouni, Managing Partner at Nuwa Capital, observed: “We are seeing more and more SaaS (Software as a Service) companies emerge from the region and the Kingdom.” 

 

The SME sector has also experienced impressive growth, largely driven by government support and Vision 2030 initiatives. As of the fourth quarter of 2023, the number of SMEs in the country reached 1.31 million, reflecting a 3% quarter-on-quarter increase. Ibrahim AbdelRahim, Managing Partner at Moonbase Capital, highlighted this trend: “This marks a staggering 179% increase in SME numbers over the last eight years. While most of these SMEs are micro-sized, they are well-positioned for further growth.” 

 

Family offices are recognizing the potential of these sectors, not only for financial returns but also for contributing to the Kingdom's broader economic transformation.

 

Direct Investments and Co-Investment Models

Unlike traditional venture capital funds, many Saudi family offices prefer direct investments or co-investment models. Achal Aroura, Head of Multi-Family Office EMEA at Klay Capital Limited, explains, “These investments are not seen as traditional venture capital investments, but rather strategic investments made by these families and their existing businesses.” 

 

This approach allows family offices to maintain control and align investments closely with their business operations. It also facilitates quicker decision-making and the ability to provide more than just capital, such as strategic guidance and industry connections.

 

Impact on the Startup Ecosystem

The influx of family office capital is having a profound impact on Saudi Arabia’s startup ecosystem. Startups benefit from not only the financial investment but also the strategic support and industry expertise that family offices bring. This support is crucial for startups aiming to scale and navigate the complexities of their respective industries.

 

Moreover, the involvement of family offices is encouraging a more robust and diversified venture capital environment in the Kingdom. Their participation is attracting international investors and signaling confidence in Saudi Arabia’s commitment to fostering innovation and entrepreneurship.

 

Challenges and Considerations

Despite the positive trends, challenges remain. Family offices often lack the infrastructure to efficiently evaluate and structure deals, which can hinder their ability to capitalize on investment opportunities. Additionally, the preference for control and long-term investment horizons may conflict with the typical venture capital focus on short-term returns and exits.

 

To address these challenges, some family offices are collaborating with specialized venture capital firms and incubators to gain access to curated deal flows and institutional expertise. This hybrid approach allows them to balance control with the benefits of professional venture capital management.

 

Future Outlook: Sustaining Momentum and Navigating Challenges

The trajectory of family office investments in Saudi Arabia's startup ecosystem is poised for continued growth, underpinned by supportive government policies, a burgeoning entrepreneurial culture, and the strategic realignment of family-owned capital.

 

Looking ahead, several factors are expected to influence this landscape:

  1. Enhanced Regulatory Frameworks: The Saudi Capital Market Authority (CMA) is focusing on developing the sukuk and debt instruments market by creating regulatory frameworks for green, social, and sustainable debt instruments. This aligns with the global push toward environmental, social, and governance criteria, potentially attracting more family offices interested in sustainable investments. 
  2. Increased Institutional Collaboration: Family offices are anticipated to deepen collaborations with institutional investors, venture capital firms, and government-backed entities. Such partnerships can provide access to curated deal flows, shared due diligence resources, and co-investment opportunities, enhancing the overall investment ecosystem.
  3. Focus on Impact Investing: There is a growing interest among family offices in impact investing, aligning financial returns with social and environmental outcomes. This trend is expected to gain momentum, particularly in sectors like education, healthcare, and renewable energy, which are central to Vision 2030.
  4. Talent Development and Succession Planning: As younger generations take the helm of family offices, there is an increased emphasis on professionalizing operations, implementing robust governance structures, and investing in talent development to ensure sustainable growth and effective succession planning.

In conclusion, the rise of family office capital in Saudi Arabia's startup ecosystem marks a transformative shift in the Kingdom's investment landscape. By embracing strategic, sector-focused investments and adopting flexible investment models, family offices are playing a pivotal role in shaping the future of innovation and entrepreneurship in Saudi Arabia.

 

 

Tags

Share

Advertise here, Be the LEADER

Advertise Now

Latest Experts Thoughts

From Concept to Reality: How the API Economy Is Taking Shape Inside Saudi Arabia

Ghada Ismail

 

In the first article, we explored the API Economy as a global shift, but understanding the concept is only the beginning. The real story emerges when we look at how the API Economy takes shape on the ground, inside actual markets.

When a user taps “pay,” links a bank account, or signs into a digital wallet, the experience looks simple. But behind every smooth tap lies a hidden world: API gateways, microservices, integration layers, open-banking rails, and banking-as-a-service components working in perfect coordination. While global conversations highlight Stripe, PayPal, and social media APIs, Saudi Arabia’s reality is driven by a growing network of local firms quietly building the financial infrastructure of the future.

This article maps the local ecosystem, the players powering it, how the architecture works, and why Saudi Arabia’s API economy is becoming a strategic backbone for the region.

 

Why the API Economy Is Accelerating in Saudi Arabia

The foundations of Saudi Arabia’s API ecosystem are being shaped by three intersecting forces:

1. Regulatory clarity and open banking readiness.
Saudi regulators and banks have laid down frameworks that encourage standardized APIs, account-data access, and safe third-party integrations. This clarity reduces friction for both fintechs and API providers.

2. Rapid consumer adoption of digital payments.
With mobile wallets, tap-to-pay, and online banking becoming mainstream, demand for stable, scalable backend infrastructure has never been higher.

3. The need for speed, cost efficiency, and modular development.
Instead of reinventing infrastructure, fintechs can now assemble it — using APIs for payments, identity, compliance, or card issuance. This modularity is what allows Saudi fintechs to launch fast and scale without massive upfront investment.

Together, these factors have created the conditions for a strong local market of API builders, integrators, and specialized fintech-infrastructure companies.

 

Who Is Building Saudi Arabia’s API Infrastructure?

Saudi’s API ecosystem isn’t driven by one type of company — it’s a layered network of infrastructure specialists. Below are the key categories and the local firms shaping each layer.

 

1. Microservices, Cloud & Integration Firms: SkyTech Digital, AusafTech, Tech Polaris

These companies form the technical backbone that many fintechs rely on:

SkyTech Digital

  • Designs microservices architectures and cloud-native applications.
  • Helps businesses migrate from legacy or monolithic systems to modular, API-driven backends.
  • For fintechs, this means faster performance, better scalability, and easier maintenance.

AusafTech

  • Specializes in full-stack API integration — from advisory to testing to long-term maintenance.
  • Connects systems to payment gateways, CRMs, cloud platforms, and messaging services.
  • Plays a crucial role when fintechs need multiple integrations handled reliably.

Tech Polaris

  • Offers API development and integration support for businesses building modular services.
  • Represents the growing demand for API-first engineering firms in the Kingdom.

These firms make fintech architecture possible: without microservices, cloud-native environments, or integration scaffolding, fintech products simply wouldn’t scale.

 

2. Fintech-Facing API Platforms: Open Banking, Payments, Cards & Payouts

Beyond general integration, Saudi fintechs rely on API-first firms that offer ready-made financial infrastructure.

Open banking aggregators (e.g., Lean Technologies, SingleView)

  • Provide account-data APIs, payment initiation, and bank connectivity.
  • Let fintechs fetch transaction data, verify accounts, or build budgeting tools without separate bank integrations.

Banking-as-a-Service & card-issuing platforms (e.g., NymCard)

  • Enable virtual cards, user payouts, financing modules, and program management — all via APIs.
  • Allow fintechs to launch financial services without building rails from scratch.

Payment service providers and merchant platforms (e.g., Geidea)

  • Offer robust payment APIs, checkout solutions, and payment links.
  • Let marketplaces, apps, and online merchants embed payments instantly.

When assembled together, these API components create a “plug-and-play fintech stack” — one that allows startups to focus on the product rather than the plumbing.

 

How These Layers Work Together: A Realistic Saudi Fintech Stack

To understand how this ecosystem behaves in practice, imagine a Saudi fintech launching a digital wallet, BNPL service, or SME-payments tool:

  • Backend architecture: A firm like SkyTech builds the cloud-native, microservices-based foundation.
  • Payment processing: The fintech integrates Geidea’s payment APIs.
  • Cards and payouts: They plug into NymCard’s card-issuing or payout APIs.
  • Bank-account connectivity: Lean Technologies or SingleView enables account linking and open-banking flows.
  • Additional integrations: AusafTech manages CRM, SMS, cloud services, and other connections.

The result?
A fully operational fintech product built in months — not years — thanks to a layered ecosystem of specialized API providers.

This is the API Economy made real.

 

Why Local Firms Matter More Than Ever

While global API giants dominate headlines, Saudi fintechs increasingly depend on regional infrastructure firms — for reasons that are both practical and strategic:

  • Regulatory alignment: Local providers are built for SAMA compliance and Saudi banking rules.
  • Localization: They understand cultural norms, payment behaviors, and Arabic-language user journeys.
  • Speed of integration: Proximity enables faster iteration and customization.
  • Resilience: Relying only on global providers increases risk; a diverse regional stack is more stable.

These companies are not outsourced vendors; they are ecosystem enablers building national infrastructure.

 

Implications for Founders, Investors, and Policymakers

For startups and founders:

  • APIs significantly reduce time-to-market.
  • Modular infrastructure lets teams focus on UX and differentiation.
  • Choosing the right integration partners becomes a strategic decision.

For investors:

  • API providers are long-term infrastructure bets.
  • Their value compounds as the fintech market expands.

For regulators:

  • Clear API standards and sandboxes accelerate innovation.
  • Supporting local API firms strengthens national digital sovereignty.

 

Conclusion: Saudi Arabia’s API Economy Has Entered Its Infrastructure Phase

If the first article explained what the API Economy is, this article explains how it is being built in Saudi Arabia — and by whom.

The Kingdom’s fintech growth is not powered solely by consumer-facing apps, but by the invisible architecture behind them: APIs, microservices, integration frameworks, open-banking rails, card-issuing platforms, and PSP gateways. Companies like SkyTech Digital, AusafTech, Tech Polaris, Geidea, NymCard, Lean Technologies, and SingleView are quietly building the rails that make everything possible.

The real story of Saudi fintech is not just about innovation on the surface.
It’s about the infrastructure underneath — reliable, compliant, modular, and fast-evolving.

And as Saudi Arabia accelerates toward a fully digital economy, those who understand and invest in this infrastructure will be shaping not just apps, but the future of finance across the region.

Vision 2030 in motion: How Saudi tourism is blending technology with environmental care

Noha Gad

 

The tourism sector in Saudi Arabia is witnessing a historic and transformative change, reinforcing the Kingdom’s position as a global tourism powerhouse. This strategic shift is a cornerstone of Vision 2030, which targets increasing tourism’s contribution to the national gross domestic product (GDP) from 3% to 10% by 2030, and aims to attract 150 million visitors annually by the end of the decade.

During the first half (H1) of 2025, the total number of inbound tourists in Saudi Arabia reached 14.3 million tourists, with inbound tourism spending estimated at SAR 90.5billion, according to recent figures released by the Ministry of Tourism. Additionally, the tourism hospitality facilities in the Kingdom recorded an overall occupancy rate of over 51% during the third quarter (Q3) of 2025, with Revenue Per Available Room (RevPAR) standing at SAR  154 in the same quarter. 

Driving this ambition is a dual commitment to sustainabilityand technological innovation. The Kingdom is not merely expanding its tourism offerings, which span from the pristine Red Sea coast and the ancient Nabatean tombs of AlUla to futuristic megaprojects like NEOM, but is doing so with a foundational pledge to environmental stewardship. 

Also, the Kingdom is at the forefront of integrating cutting-edge technologies, such as Artificial Intelligence (AI), Virtual Reality (VR), and Augmented Reality (AR), to revolutionize the visitor experience and operational efficiency. From AI-powered personalized itineraries and smart city management to immersive VR previews of heritage sites and AR-enhanced cultural exhibitions, technology is becoming the invisible backbone of Saudi tourism.

 

Green tourism in Saudi Arabia 

Saudi Arabia is putting sustainability at the core of its tourism strategies, particularly through eco-tourism integrated into its latest destination concepts that protect and preserve natural habitats and local wildlife. A range of nature reserves have already been established, including the Harrat al-Harrah Reserve, King Salman Bin Abdulaziz Royal Reserve, and Prince Mohammed bin Salman Royal Reserve. The National Center for Wildlife works to protect, develop, and resettle ecosystems and biodiversity, in addition to treating risks related to wildlife.

The Kingdom’s national initiatives, like the Saudi Green Initiative (SGI) and the National Tourism Strategy (NTS), mandate that growth must be sustainable, regenerative, and aligned with ambitious conservation targets. For instance, the SGI aims to reduce carbon emissions by 278 million tons annually by 2030 and increase the percentage of protected land and marine areas to 30% of the Kingdom's total area. Therefore, all tourism giga-projects are required to align with these goals. The 30% protection target is particularly crucial, as many projects, like the Red Sea Project, are located within or adjacent to protected zones, mandating a regenerative approach that enhances the environment.

The NTS targets implementing guidelines for energy, water, and waste management across new and existing destinations, acting as the operational link between the SGI's high-level goals and on-the-ground tourism development.

Giga projects, such as the Red Sea project, NEOM, and Al Ula, are large-scale experiments and benchmarks for building tourism from the ground up on green principles. The Red Sea project, spanning an archipelago of 90 islands scattered along the western coast of Saudi Arabia, targets developing luxury resorts using 100% clean energy, aiming for 100% carbon neutrality. Al Ula region, Saudi Arabia’s historical open-air museum, is expected to be on the global tourist radar, combining heritage with modern sustainable worldviews. This project is expected to contribute to carbon neutrality in the long term. 

All mega- and gig-projects underscore the Saudi government’s efforts to forge a future where tradition, innovation, and sustainability go hand-in-hand. According to the World Tourism Barometer, published by UN Tourism in January 2025, Saudi Arabia was one of the best-performing destinations in the world for 2024, seeing a tourism uplift of over 69% for the full 12-month period compared to 2019.

 

Digital tools driving Saudi Arabia's sustainable tourism

Smart tourism in Saudi Arabia refers to the integration of advanced technologies, such as artificial intelligence, virtual and augmented reality, and smart city infrastructure, into the travel and tourism experience. It aims to enhance convenience, personalization, and sustainability for both domestic and international visitors.

Building upon its sustainable foundation, Saudi Arabia is strategically deploying advanced technologies to create seamless, personalized, and immersive visitor experiences. These technologies are integral to managing tourism growth efficiently while elevating engagement to world-class standards.

AI serves as the central nervous system of this new tourism ecosystem. Beyond powering personalized recommendations on platforms like the official Visit Saudi portal, AI is crucial for operational sustainability and management. It is used for predictive analytics to optimize energy and water use in large resorts, manage visitor flows to prevent overcrowding at sensitive heritage sites, and provide real-time, multilingual assistance through AI-powered chatbots and virtual concierges. 

For immersion and accessibility, Virtual Reality (VR) and Augmented Reality (AR) are transforming how visitors explore Saudi heritage and future destinations. Before travel, VR enables potential tourists to take digital journeys through destinations like the ancient tombs of Hegra in AlUla or the futuristic models of NEOM. Platforms like the Metaverse let visitors explore Saudi landmarks from anywhere, offering a glimpse into the Kingdom’s rich heritage, no matter where they are in the world.

On-site, AR applications enrich the physical experience; for instance, at historical locations, visitors can use their smartphones or AR glasses to see historical recreations superimposed on ruins, receive interactive guided narrations, or access instant translation of inscriptions, bringing millennia of history to life in an engaging, educational format. Interactive museums, such as the International Fair and Museum of the Prophet’s Biography and Islamic Civilization, turn history into an experience through screens, sound, and smart displays. Historic and cultural sites like AlUla, Diriyah, and Jeddah’s Al-Balad offer AR experiences that let visitors interact with stories from the past.

 

Key smart tourism platforms in Saudi Arabia

The smart tourism ecosystem in Saudi Arabia is supported by several key digital platforms, ranging from official government portals to giga-project-specific applications. These platforms leverage AI, data analytics, and integrated services to enhance the visitor journey from planning to post-trip.

  • ‘Visit Saudi’ portal and application is the official national tourism platform that serves as the primary digital gateway for all international and domestic tourists. It offers AI-driven personalized itinerary planning, destination discovery, event bookings, and integrated visa application links. 
  • Nusuk is the official unified digital platform for pilgrims performing Hajj and Umrah, managed by the Ministry of Hajj and Umrah. It offers end-to-end journey management, including eVisa, electronic permit issuance, accommodation booking, flight packages, and health services. The platform uses data analytics for crowd management and a seamless spiritual experience.
  • Tawakkalna app. Thanks to its robust identity verification infrastructure, this application is integrated into the tourism and events sector. It provides a secure digital identity, via Absher integration, for fast-track entry at major events, festivals, and tourist attractions, reducing queues and enhancing security.

 

As Vision 2030 continues to unfold, Saudi Arabia’s model offers a forward-looking blueprint for how destinations can grow responsibly. It demonstrates that with clear vision, supportive policy, and strategic investment, tourism can be a force for economic vitality, cultural celebration, and environmental preservation. This transformation in the Saudi tourism sector represents a purposeful integration of environmental stewardship and technological innovation. By establishing a firm green foundation through national initiatives and advancing a sophisticated smart toolbox with artificial intelligence, immersive tech, and data-driven platforms, the Kingdom is not merely expanding its tourism sector; it is redefining its future. 

Are You Growing or Scaling? Why Every Founder Should Know the Difference

Ghada Ismail 

 

In the startup world, growth and scaling are often used interchangeably, but they are not the same. Understanding the difference can save founders time, money, and headaches, and help attract investors who care about leverage and efficiency.

 

Growth: Getting Bigger

Growing means increasing revenue while increasing resources roughly in proportion. More customers require more support. More features require more engineers. Revenue rises, but so do costs, headcount, and operational complexity. Growth is usually linear: a 40% revenue increase often comes with roughly 40% more expenses.

For early-stage startups, growth is necessary. You hire people to build the product, test features, and serve clients. You experiment with pricing, marketing, and distribution. It’s hands-on, manual, and resource-intensive, and that’s fine at this stage.

 

Scaling: Getting More Efficient

Scaling means increasing revenue significantly without a matching rise in costs. In other words: more output with minimal additional input. While growth is linear, scaling is exponential.

Scaling depends on leverage: repeatable processes, automation, and systems that allow serving more customers without proportionally increasing overhead. This is why tech and digital startups often scale faster: software, platforms, and automated processes can handle volume at near-zero marginal cost.

In short: growth makes your startup bigger; scaling makes it more efficient.

 

When to Grow vs When to Scale

Most startups should grow first, scale later.

Grow when:

  • You’re building the product and learning from early users
  • Your processes are manual or experimental
  • You’re testing pricing, positioning, or marketing channels

Growth at this stage is about survival, validation, and assembling the machine.

Scale when:

  • You have product-market fit and repeatable demand
  • Operations can handle more volume without proportional cost
  • Customer acquisition or revenue patterns are predictable

Scaling at the right time multiplies results without multiplying costs — unlocking higher margins and sustainable growth.

 

Risks of Confusing Growth and Scale

Scaling too early can lead to overspending, inefficient hires, and operational collapse before product-market fit.
Growing indefinitely without scaling leads to overstaffed teams, rising expenses, and stagnant margins, a business that can’t expand without proportional resource increases.

Understanding where your startup sits ensures smarter decisions and clearer communication with your team and investors.

 

Wrapping Things Up…

  • Growth is about size; scaling is about efficiency.
  • Startups grow first to validate and learn; they scale to multiply output and impact.
  • Confusing the two can waste resources, slow progress, and frustrate teams.

The most successful founders don’t just aim to grow; they aim to scale at the right time, turning a validated product into a business that can expand rapidly, sustainably, and profitably.

Beyond VC and loans: The rise of revenue-based financing for entrepreneurs

Noha Gad

 

In today’s fast-growing startup landscape, founders face several challenges, most notably securing capital to fuel growth without sacrificing equity or facing rigid repayment schedules. Traditional options like venture capital dilute ownership, while bank loans demand collateral that many early-stage businesses lack. Hence, revenue-based financing (RBF) emerged as a flexible, performance-aligned model that reshapes the way entrepreneurs fund their ventures. 

 

What is revenue-based financing (RBF)?

Revenue-based financing, or royalty-based financing, allows businesses to raise capital by giving investors a share of their ongoing gross revenues. This model provides founders with fast, non-dilutive capital that aligns with their actual revenue, offering valuable insights beyond just funding to fuel their sustainable growth.

Unlike debt and equity financing, RBF enables investors to receive a regular share of the business's income until a certain amount is paid. This amount is typically three to five times the original investment.

RBF is particularly popular in small to mid-sized companies or Software-as-a-Service (Saas) sectors as it provides an alternative for companies that are unable to secure traditional financing. It is an ideal option for growing online businesses, especially those with predictable, recurring revenue, that need capital for inventory, marketing, or other operational expenses.

 

How does RBF work?

A company that raises capital through revenue-based financing will be required to make regular payments to pay down an investor's principal. It is distinct from debt financing for several reasons: interest is not paid on an outstanding balance, and there are no fixed payments.

Payments to investors depend on the company’s performance because they vary based on the level of the business's income. For instance, if sales fall off in one month, investors will see their royalty payment reduced. Likewise, if sales in the following month increase, payments to the investors for that month will also increase.  

RBF also differs from equity financing because investors do not have ownership in the business. This is why revenue-based financing is often considered a hybrid between debt financing and equity financing.

 

Benefits and drawbacks

When considering revenue-based financing as a funding option, it is important to weigh its advantages alongside its limitations. This approach offers a set of benefits that appeal to many growing businesses, but it also has potential drawbacks that may impact suitability depending on the company’s specific circumstances. 

Benefits

  • Non-dilutive capital: It allows entrepreneurs to raise funds without giving up ownership or control, which is crucial for founders keen to retain strategic decision-making power.
  • Flexible repayments: Payments fluctuate with revenue, reducing financial pressure during slow periods. This eventually helps maintain healthier cash flow compared to fixed loan installments.
  • Fast and accessible: Approval processes emphasize actual revenue performance rather than projections or credit scores.

 Drawbacks

  • Higher Cost: RBF can be costlier than traditional debt, with repayment caps often ranging from 1.3x to 2.5x the initial amount.
  • Revenue dependence: Companies with fluctuating or unpredictable revenue may face extended repayment terms, which can strain long-term financial planning.​
  • Not for early-stage startups: RBF generally requires a reliable revenue stream. This makes it less suitable for pre-revenue or high-risk ventures.​

 

RBF vs. traditional funding options

Revenue-based financing stands out in a crowded funding landscape by offering a middle path between equity-heavy venture capital and rigid traditional debt. Evaluating it against alternatives like VC, bank loans, and venture debt reveals key trade-offs in ownership, repayment flexibility, and accessibility. RBF preserves full ownership without equity dilution, unlike VC, which requires giving up shares and often board seats. Additionally, RBF does not require collateral or personal guarantees, compared to bank loans, which have fixed payments and asset requirements.

RBF avoids interest rates and equity warrants typical in venture debt, offering purely revenue-based terms without fixed schedules, though both target growth-stage firms.

Finally, Revenue-based financing offers a compelling alternative for founders seeking flexible, non-dilutive capital aligned with their business performance. Although it may carry higher costs than traditional debt and requires steady revenue, its scalable repayment and quick access make it an attractive option for growing companies. As startups navigate funding choices, understanding RBF's unique workings can empower smarter decisions for sustainable growth. 

Esports Meets Entrepreneurship: Could Gamers Be Saudi Arabia’s Next Big Investors?

Ghada Ismail

 

When an ecosystem grows fast enough, its consumers often become its creators.. and potentially its funders. Over the past few years, Saudi Arabia’s gaming and esports sector has transformed from a niche leisure activity into a central plank of the Kingdom’s economic‑diversification strategy. This shift is creating a new dynamic: engaged, affluent gamers who understand games, audiences and monetization, and who may soon act like investors. 

 

The resulting feedback loop seems promising: state‑backed capital and high-profile events generate interest; local entrepreneurs launch studios, platforms and tools; and successful players, creators and founders begin to emerge as potential angel investors — accelerating the cycle.

The scale of the opportunity helps explain the momentum. According to according to Savvy Games’ 2024 report, Saudi Arabia’s gaming market generated about US$1.19 billion in revenue in 2024, making it the largest gaming market in the Middle East and North Africa (MENA). 

 

Projections in that report estimate the market could reach US$1.64 billion by 2028, assuming steady growth across platforms (console, mobile, PC). 

Moreover, the overall appetite for gaming in the Kingdom appears substantial. According to one 2025 analysis by Antom.com, Saudi Arabia outpaces the MENA average in per‑capita gaming spending (almost three times higher) and counts about 23.5 million players, with a reported penetration of about 63%. 

 

Thanks to these numbers, as Saudi gamers participate in tournaments, build communities, create content, and use local or regional platforms, they are gaining a kind of product and market literacy, the kind of instinctive sense for audience behavior, monetization and content dynamics that investors typically rely on. With the gaming sector expected to expand steadily through at least the latter half of the decade, the Kingdom may be approaching a novel phenomenon: where players and creators don’t just consume the ecosystem — they fund it.

 

Why Gamers Could Make Effective Investors

The idea of a gamer acting like an angel investor may sound bold, but in Saudi Arabia’s current context, it is increasingly plausible. Gamers tend to develop deep product intuition: after thousands of hours engaging with games, they learn to spot good user experience, balance design, monetization potential, and retention dynamics. They understand what players want, a useful skill when evaluating new gaming or esports startups.

Content-creating gamers — whether they stream, compete, commentate, or run communities — usually build strong followings. That audience gives them real influence. A single post, stream, or tournament partnership can draw attention to a startup, bring in early users, or even attract investors. Because they have this direct reach and credibility, creators can be powerful early supporters or even valuable co-founders.

Some gamers have moved beyond playing or content creation into informal micro‑businesses: coaching, streaming monetization, community tournaments, and even indie game development. These ventures mirror early-stage startup experience, giving gamer‑entrepreneurs a head start.

Because many of these initiatives build on local tastes, culture, language, and regional understanding, there is strategic alignment: Saudi gamer‑investors may be especially motivated to support platforms and titles that resonate regionally.

 

Institutional Support: Savvy Games Group

At the top of the new gaming ecosystem sits Savvy Games Group, created under the Kingdom’s sovereign wealth fund to lead the charge. According to its 2023 annual report, it was set up to align with Saudi Vision 2030 goals: leveraging a young, affluent, tech-savvy population to build a national games industry. 

Savvy’s backing gives legitimacy and resources to the sector — from infrastructure and studio development to global publishing and esports investments. This sovereign‑scale commitment signals strongly to local entrepreneurs and prospective gamer‑investors that gaming is not a passing trend, but a long-term strategic industry for the Kingdom. 

 

Emerging Domestic Platforms and Startups

As institutional capital flows, local startups and regional platforms are shaping the ecosystem from the grassroots upward. Their existence expands the possible entry points for gamer‑investors. These are the most prominent players in the local market:

  • Grintafy — A Saudi sports-tech platform (founded in 2018 / 2019, based in Jeddah) that connects amateur and semi-pro footballers to clubs, matches, and talent scouts. Grintafy allows users to build a “football CV,” organize or join games, rate players, track performance, and get visibility among clubs and academies — effectively democratizing access to football opportunities across the Middle East. Grintafy has raised external investment: a 2022 convertible note from Wa’ed Ventures, and more recently a strategic investment from Chiliz (a global sports-blockchain company) to accelerate its transition toward Web3 and scale its talent-discovery ambitions. 
  • Spoilz   A Saudi game-development studio (founded 2020) focused on mobile games and live-ops services for the MENA region. Spoilz recently secured investment from investors including Merak Capital and Impact46, with plans to build globally competitive games and expand beyond mobile to PC/console/smart-TV platforms. 
  • Fahy Studios  A Riyadh-based game studio that in 2025 closed a US$1.75 million funding round to develop hybrid-casual games globally. The studio graduated from the educational accelerator program at NEOM Media Industries’ Level-Up accelerator and signed a publishing deal with international publisher Kwalee. 
  • Starvania Studios  A newer Saudi indie studio (founded 2022) that secured US$1.1 million in funding from Merak Capital and Impact46, aiming to expand into PC and console game development. Its first released game (on Steam) draws on Arabian mythology themes, showing local creative ambition and regional cultural resonance. 
  • Rize.gg   A newer, pre-seed startup (headquartered in Riyadh) building a platform for competitive gamers to team up, stream gameplay, and organize tournaments, representing early-stage, community-driven startup activity in Saudi Arabia’s esports ecosystem. 

 

What These Real Examples Tell Us

  • The ecosystem is diverse; not just big capital-heavy firms, but indie studios (Spoilz, Starvania, Fahy), and platform/community-builders (Rize.gg). There is active investor interest and early-stage funding: studios like Fahy and Starvania have secured external investment; Spoilz is scaling. This shows that Saudi Arabia’s gaming scene is beginning to attract real capital beyond state-backed conglomerates.
  • These companies emphasise regional relevance and global ambition — games drawing on local cultural references, but aiming for international distribution; venues and platforms designed for local communities but part of broader esports networks.
  • For “gamer-investors,” this variety offers multiple entry points: investing in indie studios, backing platforms, co-owning venues or clubs, or even participating directly in community-driven content/competition.

 

Government and Regulatory Support: Clearing the Path for Gaming Investment

Saudi Arabia’s gaming ecosystem is buoyed by proactive government policies. The Saudi Esports Federation (SEF) and the Ministry of Communications and Information Technology (MCIT) have implemented frameworks to support esports tournaments, professional leagues, and content creation. Initiatives like SEF Arena in Riyadh, which hosts competitive gaming events, serve not only as a physical hub for players but also as a proving ground for potential investor-gamers to assess market dynamics firsthand. 

Additionally, regulatory clarity around digital assets, in-game monetization, and content licensing is improving, lowering barriers for both startups and investor-gamers. Policies encouraging local IP development and regional content distribution provide incentives for Saudi gamers to participate in funding domestic projects rather than relying solely on foreign titles. These regulatory advances reinforce the sustainability of a gamer-investor ecosystem.

 

The Role of Education and Skills Development in Gaming Investment

Another emerging trend is the overlap between gaming literacy and professional skills. Many Saudi gamers are students or professionals in computer science, design, data analytics, or digital media. Their gaming experience equips them with deep insights into user behavior, digital monetization, and community management, skills that are directly transferable to evaluating startups or running small gaming-focused ventures.

Local educational initiatives, including partnerships with universities and coding academies, are increasingly incorporating esports management, game design, and content production into their curricula. Programs like these provide structured pathways for aspiring investor-gamers to transition from hobbyist participation to professional involvement in the gaming economy, further reinforcing the pipeline from player to investor. 

 

Conclusion

Saudi Arabia’s gaming push is no longer just about big tournaments or major acquisitions. Thanks to strong government support, a young population, and growing local spending, the Kingdom now has the foundations of a gaming sector that can sustain itself.

These foundations could also create a new kind of investor- gamers who understand products, digital culture, and community needs better than traditional investors. As the market grows and more Saudi studios, tools, and platforms appear, these gamers may increasingly step into roles as founders, early backers, or active stakeholders.

In short, Saudi Arabia might be on its way to creating one of the world’s most unique groups of digital-native, gaming-driven investors. This future now feels realistic, it’s just not fully here yet.