Saudi Arabia turning into a global player in tech investment

JEDDAH: Saudi Arabia is fast becoming a global player in terms of startups and venture funding, said the CEO of 500 Global.

In an exclusive interview with Arab News, Christine Tsai said: “2020 was really a record year (for Saudi Arabia) in terms of startups and venture funding and new funds and a lot of support from various important stakeholders.

500 Global, previously known as 500 Startups, is an early-stage venture fund and seed accelerator based in the Silicon Valley, California.

It made its first investment in the Kingdom in 2012 and established its Middle East headquarters in Riyadh last year.

“A lot of this was driven by the fact that we see a lot of very strong founder talent, local talent.

“There was a capital gap in a lot of markets and we’ve seen over the past 10 years capital starts to catch up. Now the world is a very different place; companies are starting to mature and more people are interested in getting exposure to venture capital to tech. So, as a result, there’s more capital coming into the market,” she said.

Tsai said the most promising sector in the Kingdom to invest in is fintech. “We are quite excited about Saudi being a major hub for tech,” she said.

“Broadly, we have seen a lot of fintech, there is a lot of innovation coming in for fintech both for locally within Saudi as well as the broader MENA region but fintech, commerce or e-commerce, health tech has also been quite interesting … we also do see opportunities in software as a service.”

Tsai said the first thing her firm looks at when considering investing in a startup is the team. “We look certainly very closely at the team, which is something quite critical for us,” she said.

She said investment firms tend to look for “potentially big outcomes” but the result is not usually clear from the beginning. Tsai said many investors or co-investors sometimes base their decisions on their negative experience in a certain country or region and they make generalisations about those parts of the world.

She said that 500 Global is not averse to taking risks and does not base its decisions on such generalisations.