Arab News, 9 January 2022: Saudi Arabia saw a significant jump in venture capital investments in the financial technology sector, with 16 deals in the first eight months of 2021 totaling $157.2 million.

This compared with seven deals worth $7.8 million in 2020. 2021 also saw backing spread across a range of early-stage projects, with 46% at series A and B stages, 38% at the seed stage, and 15% at pre-see levels (where funding often comes from the founders, their family and supporters).

The payments sector remains the most attractive fintech area in Saudi, so far accounting for around 93% of total venture capital investments.

However, the median deal size in Saudi Arabia is $2.7 million compared to a global median deal size of $7.3 million.

The launch of Open Banking in Saudi Arabia in 2022, which allows firms to share consumer current account data once permission has been given, is also expected to speed up the pace of fintech development.

Experts expect this move will provide existing fintech investors with more opportunities, and will attract funds to the sector.

The Financial Sector Development Programme, launched in 2017 should also assist.

The plan includes developing the digital economy, and allowing financial intermediaries to support private sector growth by opening up the financial services industry to new players. It is also encouraging building of an advanced capital market in the Kingdom.

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