Prime Highlights:
- Saudi Arabia is transforming into a global hub for technology startups by combining regulatory reforms with rapid innovation.
- Riyadh has climbed 60 places in the Global Startup Ecosystem Index, now ranking 23rd worldwide, showing strong growth in the startup ecosystem.
Key Facts:
- The Kingdom raised $860 million in the first half of 2025, a 116 percent increase from the previous year, while the Ministry of Investment approved 550 startup investment registrations, marking a 118 percent growth.
- Over 200 fintech companies now operate in Saudi Arabia, supported by sandbox programs and updated regulations from the Saudi Central Bank and the Capital Market Authority.
Key Background:
Saudi Arabia is quickly becoming a global center for technology startups by combining new regulations with innovation. The need to diversify its economy as well as to reduce its oil dependency has encouraged the country to develop a business environment that has become predictable, competitive, and therefore, attracting entrepreneurs and investors in other parts of the region.
Feras Mousilli, managing partner at Lloyd & Mousilli, praised the fast changes. He said that Saudi Arabia is updating its regulations fast, and the government’s new rules aim to make business easier, clearer, and more competitive globally
Sandbox programs and tiered licenses allow startups to test new ideas with fewer limits. The way open banking rules work is that banks have to share their systems with fintech companies, making them more competitive and inclusive.
Hisham Al-Falih, who started Lean Technologies, said the updates have made a big difference. “New regulations, including open banking and the upcoming Payments Initiation Service, have had a big impact on startups like ours,” he said. “Working with regulators has helped us create a system that supports growth while keeping companies compliant.”
Saudi Arabia has also improved its legal framework for all businesses. The new Investment Law protects foreign and local investors, and the revised Companies Law makes it easier to start a business. Companies updated their Articles of Association to match international standards.
The startup scene is growing fast. Riyadh climbed 60 spots in the Global Startup Ecosystem Index and now ranks 23rd worldwide. Venture funding grew 49 percent annually from 2020 to 2024. Over 200 fintech companies operate in the country, and cybersecurity and other tech startups are also expanding.
Venture capital is growing strongly in Saudi Arabia. Saudi Arabia raised $860 million in the first six months of 2025. The Ministry of Investment also approved 550 startup investment registrations, marking a 118 percent increase compared to the previous year.
Although challenges like complicated rules and protecting intellectual property still exist, entrepreneurs are optimistic. Al-Falih said this is one of the best times to be part of the tech community in the GCC, showing the growing opportunities in Saudi Arabia.
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