Saudi Arabia ‘leads in luring venture capital to tech’

Reuters/Ahmed Yosri

• IT minister at Riyadh forum
• $4.4bn for cloud computing
• 354,000 jobs in sector

Saudi Arabia has become a regional centre for venture capital in the tech sector, a government minister told a technology conference in Riyadh this week. 

“The kingdom has become part of the fabric of the global digital economy,” Mohammed Alrobayan, deputy minister of communications and IT, told the techXpand forum. 

“Testament to this is the SAR16.5 billion [$4.4 billion] investment attracted by the kingdom for cloud [computing] only. Saudi Arabia is now number one for VC investment in the region.”

The jobs market in information and communication technology has grown by 13 percent over the past five years, Alrobayan added. “We have reached 354,000 jobs in the sector and I’m glad to announce that 35 percent of these jobs are held by women.”

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His ministry, which organised the conference, has created a SAR600 million fund to stimulate AI technology, and another fund of SAR250 million for tech startups, Alrobayan said. 

One of the speakers, Vijay Tirathrai, managing director of Riyadh Techstars, the Saudi branch of the US-based accelerator and venture capital fund, said the tech industry had huge growth potential after finding its feet over the past four years. 

“Most nations are built by SMEs. But what’s different here is, the digital and tech sector has the biggest potential for high growth and scalability. Venture capital is particularly interested,” Tirathrai said, speaking on the sidelines of the event, which was held inside the Riyadh Digital City district. 

Riyadh Techstars, which operates accelerator programmes with the ministry and a local venture capital firm, Raed Ventures, opened its first base in the region in Dubai in 2017. 

Tirathrai said the two markets were complementary. The UAE is international but small, while Saudi Arabia has a population of 32 million but only recently opened up to tourism and business under its economic development plans. 

Crown Prince Mohammed bin Salman, an avid gamer, is pushing the digital and tech industry including e-sports as an area that appeals to Saudi Arabia’s young population. Some 63 percent of the population is under 30.  

“It makes sense to be not just a consumer but a producer of such events and games, and to be a serious player on the global stage, whether it’s golf or football or e-sports,” Tirathrai said. 

“One advantage they have is financial muscle, but they also have the dominant consumer base among the Arabic-speaking population. Someone has to take the lead in the region and I’m glad to see Saudi Arabia is.” 

Virtual reality featured heavily among the dozens of exhibitors at the techXpand conference. Abdulrahman Almufti’s startup VR Vision was one of them, displaying technology that is proving popular in the construction and heritage sectors. 

“When we see the plans we don’t have a feeling of the space, but with VR we can live inside the design,” he said. “In construction, we make regular scanning of the site, so that at the end of the project we have a virtual archive of how it has developed month by month.”