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A flat tire and a six-hour nighttime wait for roadside assistance inspired the creation of Saudi Arabia’s leading roadside technology app. Morni uses a network of over 33,000 service providers to offer roadside assistance to more than 1.2 million customers in the Kingdom and across the region.
“As the largest market in the Middle East, Saudi Arabia still has an undiscovered wealth of untapped potential, making it one of the region’s most exciting startup markets,” Abdullah Al Yahya, Morni’s cofounder and CTO, says.
Despite decreasing entrepreneurial activity in other parts of the world, Saudi Arabia’s support for entrepreneurship and diverse business sectors is fueling an expanding startup ecosystem. Its fastest-growing sectors include tech, fintech, and especially e-commerce, which is predicted to surpass $13 billion in value by 2025, according to a report conducted by Boston Consulting Group and Meta.
One of the Kingdom’s most successful tech startups, MRSOOL, began with a conversation at a café between two friends, Naif Al-Samri and Ayman Al-Sanad, who imagined having a brother in every city to help with errands. MRSOOL pioneered the on-demand service-fulfillment model in Saudi Arabia and the region, establishing a major customer network through a chat-based ordering system that lets users request any kind of delivery service and then lets couriers bid for the jobs, ensuring a fully scalable and self-regulating model.
“If I’ve learned one thing throughout my journey, it’s that you should never give up on your business idea if it feels right and you’re truly passionate about it,” says Al-Sanad, cofounder and CEO of MRSOOL. “You’re sometimes only a split second away from walking away and missing the opportunity—or persevering and seeing your dreams come to fruition.”
A Supportive Startup Ecosystem
Saudi Arabia’s startup successes largely result from sweeping reforms across key economic sectors that are unlocking new markets, boosting entrepreneurial ambition, and opening avenues of innovation.
These reforms are driven by Saudi Vision 2030, the Kingdom’s long-term plan to diversify the economy, whose goals include increasing small businesses’ contribution to GDP from 20% to 35% and boosting foreign direct investment from 3.8% to 5.7%.
Saudi Arabia’s Small and Medium Enterprises (SME) General Authority, Monshaat, designs initiatives that promote a culture of entrepreneurship and sets policies and standards in the SME sector.
Monshaat also organizes the Kingdom’s global start-up and SME forum, Biban, which fosters tangible opportunities by uniting local and international entrepreneurs, investors, and government officials to collaborate and share insights.
Among the opportunities this year at Biban 23 is the Entrepreneurship World Cup (EWC), one of the world’s biggest and most diverse startup pitch competitions and support programs. Since its inception, more than 400,000 entrepreneurs from 200 countries have registered.
Bucking Global Trends
Saudi Arabia is bucking global trends in entrepreneurial investment. Venture capital funding levels have soared year-over-year, with investment in Saudi startups growing by 72% in 2022 to a record high of $987 million.
The Kingdom’s small business sector gains in 2022 also match a boom in the regional startup ecosystem. The expansion of the SME sector in the Middle East and North Africa (MENA) region reflects a growing talent pool, advancements in technology infrastructure, consumer adoption, and macroeconomic and regulatory reforms.
MENA’s 50 most-funded startups raised around $3.2 billion in 2022, up 6.7% from 2021. In 2021, entrepreneurs struck three “mega-deals,” worth over $5 million; in 2022, there were seven.
Where Your Business Needs to Be
This evolution overcomes challenges entrepreneurs face in other innovation hot spots, such as troubleshooting market problems, gaining access to capital, hiring the right talent, and building brand awareness.
“The unique combination of Vision 2030, the public sector’s role in creating a highly supportive business environment, and an evolving entrepreneurship culture that has inspired a community mindset is developing a landscape where the initial hardships of starting a business can be overcome,” says Saud Al-Sabhan, Deputy Governor for Entrepreneurship at Monshaat.
“Starting a new business in Saudi Arabia today,” he says, “means having good access to the guidance, mentorship, and financial support you need to help your company succeed.”
Learn more about Biban and how your organization can invest, partner, and establish itself in the Kingdom.
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