Immense Growth in Saudi Arabia GDP—More than 80 percent of the $36 million raised by Saudi Arabia’s fast-growing e-commerce platform, Retail, was invested in stock, according to Magnitt.
Venture debt was used to raise the remaining 20% of the funding.
Graphene Ventures, based in Silicon Valley, led the round, accompanied by 500 Global, Agility, Aujan, Tech Invest Com, and Mentor’s Fund.
Bloomberg reported that more than $1 billion would be used to digitize retail establishments in the region and create a one-stop shop where customers can order things at lower prices.
Jawlah quoted Talha Ansari, chief executive officer of the company, as saying, “With global supply chains under pressure that drives up commodity prices and hinders GDP development, it becomes increasingly necessary to safeguard smart supply chains.”
Moreover, the new funding aligns with the startup’s expansion strategy into new markets and areas.
Additionally, the recurring investors Arzan VC and AgFunder were joined by Shorooq Partners and Abercross Holdings, Arzan VC, and AgFunder.
Retail has raised a total of SR202 million, marking an important milestone in the region’s startup environment, with operations in Pakistan, the UAE, and the Kingdom.
“The retail sector serves 700 million people in the MENAP region, provides around 20% of GDP, and employs tens of millions,” Ansari said.
According to him, “we are helping to raise the bar for the economy of the entire MENAP region by delivering technology solutions in this underserved sector.
In recent years, Saudi Arabia has emerged as one of the most sought-after countries for foreign corporations to expand through acquisitions. This trend is expected to continue into the year 2022.
For the third quarter, the country’s growth rate was 6.8%. Rising demand for crude oil, ambitious Saudi Vision 2030 goals, the development of non-oil sectors, and progress in the COVID pandemic are all contributing factors.
As a result, mergers and acquisitions are expected to rise in Saudi Arabia in the following year.
Lumina Capital Advisers’ Riyadh-based partner Fikry Younis remarked, “The Saudi market is undoubtedly one of the most active M&A markets in the region, along with the UAE and Egypt.”
According to Arab Gulf State Institute economist Robert Mogielnicki, Saudi Arabia’s energy and technology sectors are the most obvious places to watch for mergers and acquisitions.
Saudi Arabia has a comparative edge in the oil industry and is eager to monetize its resources. According to him, “Saudi Arabia is trying to become a worldwide technological center, and it’s a global phenomenon.”
Saudi Arabia, according to Younes, is seeing a boom in mergers and acquisitions (M&A) across a wide range of industries, with a particular emphasis on healthcare, education, and logistics infrastructure, as well as tourism, sports, and ESG (Environmental, Social, and Governance) investments.
Healthtech, Edutech, and fintech are just a few of the many areas in which technology is making a significant impact.
Saudi Arabia GDP: Immense Growth.
Neom, a $500 billion futuristic metropolis that includes a nature reserve and heritage monuments on islands in the Red Sea alongside an extensive entertainment and sports project called Qiddiya, will contribute more than 10% of Saudi Arabia’s GDP by 2030.
According to the Kingdom of Saudi Arabia, more than $1 trillion will be invested in the tourism industry over the next ten years.
Broadgate Advisers partner Habib Aoun says that when evaluating industries based on deal value, oil and commodities remain far and away from the most robust due to strategic acquisitions involving government institutions like Saudi Aramco.
According to deal counts rather than deal sizes, there is much interest from strategic and financial investors in the healthcare, education, and ICT sectors.
Although oil prices have just rebounded slightly, “Saudi Arabia has always been and remains a major market for mergers and acquisitions,” explains Aoun.
Compared to the $75 billion announced deals across the Middle East and North Africa, the expert forecasts that Saudi Arabia alone will have $44 billion in stated sales by 2021.
EIG Global Energy led a consortium that bought a 49 percent stake in Aramco’s Oil Pipeline Co; the acquisition of an Aramco gas portfolio by US-based Air Products and ACWA Power; and the acquisition of a 50 percent stake in Saudi National Petrochemical Company by the Saudi Industrial Investment Group, Aoun said.
This merger was also concluded with the Alawwal Bank, an HSBC Holdings subsidiary. Saudi National Bank was formed due to the union of National Commercial Bank and Samba Financial Group in 2011. With combined equity of SR120 billion ($31.96 billion), SNB will have 25 percent.
The sales of Naturepack Beverage Packaging to Elopak in Norway, HSBC’s asset management company to Alawwal Invest in Saudi Arabia, Saudi Enaya Cooperative to Amana Cooperative, and Fourth Milling Co. to a Saudi consortium of strategic Agri investors are important mid-cap deals.
The first British boarding school to open in Saudi Arabia was King’s College Riyadh, Dorset King’s College. Ennismore and Saudi Arabia’s Tourism Development Fund have formed a $400 million fund to deliver Ennismore’s lifestyle brands to Saudi Arabia.
Samba-merger NCB’s and PIF’s takeover of Newcastle United are huge deals that garner a lot of media attention, but Younes points out that many smaller deals are also taking place behind closed doors.
There is little doubt that Saudi Arabia’s Vision 2030 is a significant factor in the recent frenzy of M&A activity, adds Younes.
Localization of know-how is a critical component of Vision 2030.” The chemical and pharmaceutical industries, among others, have reaped the benefits of government initiatives across the entire production spectrum. Infrastructure, including telecommunications, education, tourism, food and beverage, and health care, are among the other significant areas likely to benefit from Vision 2030 investment to sustain the planned economic growth. Even if Covid had a considerable influence on 2020, most sectors had recovered well by the beginning of 2021,” says Aoun.
Specialists believe that Saudi Arabia’s M&A activity is both inward and cross-border.
One example is a $10 billion contract between Saudi Arabian and Omani firms.
According to Younes, there is a shift within Saudi Arabia, where investors and family offices are reevaluating their portfolios and selling off non-core assets to put their money to work, strengthening their primary businesses.
“International investors are investing inbound to Saudi Arabia to benefit from the extraordinary growth, especially given the issues that many in their home countries are facing: COVID, supply chain challenges, inflation, etc. “Saudi Arabian investors that invest overseas do so to bring in expertise and talents from other countries.”
The present oil price level and the government’s ongoing efforts to develop the country and position Riyadh as the region’s financial hub is driving up expectations for M&A activity in the Kingdom for Aoun.
