Under the three themes of Saudi Arabia’s Vision 2030, a vibrant society, a thriving economy, and an ambitious nation, comes the importance of tech entrepreneurship ecosystem as an enabler of the national transformation program’s strategic objectives. With the inception of NEOM and its vision to build the land of future where the greatest minds and best talents are empowered to embody pioneering ideas and exceed boundaries in a world inspired by imagination, there is the urgency for profoundly assessing, reflecting on, and then revolutionizing Saudi Arabia’s tech startups ecosystem.
Internet in Saudi Arabia has the highest penetration levels in the entire Arab world, a trend which is expected to see future exponential growth. The Kingdom is ranked 30th worldwide regarding the number of internet users with a total of 22 Million which represents nearly 70% of the entire population. Furthermore, Saudi Arabia is the home of the highest proportion of mobile phone users in the world with statistics indicating 180 mobiles per 100 residents. 60% of the population are social media users with popular platforms being Twitter, Snapchat, Instagram, Facebook, and Youtube. The above mentioned, among other factors, has contributed to the rise of a technology entrepreneurship culture across smartphone applications and multimedia content with 36% of tech startups registered in 2016 owned by women.
The Startup Ecosystem
The startup ecosystem concept has arisen as a vehicle for managing entrepreneurship by optimizing the interaction of different actors and conditions with the objective of assisting tech entrepreneurs to develop new startups with the aim to grow them successfully and integrate them into the overall economic landscape. In Saudi Arabia, the tech startup ecosystem has seen notable growth over the course of the last five years driven by increasing support and involvement of both the government and the private sector.
As far as financial and non-financial support is concerned, research indicates that Riyadh and Jeddah are the most balanced and advanced with increasing availability of entrepreneurship networks and initiatives. Nonetheless, Makkah and the Eastern province are more focused on establishing specialized centers within universities to support entrepreneurship. The overall number of support organizations has registered a significant increase from 13 in 2011 to 36 in 2015.
Data gathering, analysis, and mapping of all current initiatives infer that most entrepreneurship support programs are run either by the government or big corporations. Furthermore, universities, non-governmental organizations, and foreign universities graduates, also play a decent role in educating the new generation of entrepreneurs by organizing events, conferences, and workshops.
Incubator programs are intended to help new startups thrive through assisting entrepreneurs to overcome most frequently encountered difficulties associated with founding and operating a startup. Incubators provide startups with workspace, seed funding, mentoring, and training. Common incubator services include help with basic business needs such as providing internet access, helping with accounting and marketing, and availing legal services.
Incubators are usually non-profit organizations, which are run either by public or private entities and are often associated with universities, governments, startup organizations, corporations or successful entrepreneurs. While some incubators are independent, they can also be sponsored or run by venture capital firms, government entities, and major corporations, among others. Depending on the sponsoring party, an incubator can be focused on a specific market or a vertical.
In most cases, startups admitted into incubator programs relocate to a specific geographic area to work with other companies in the incubator. A typical incubator has shared co-working space and avails connections to local communities, universities, and corporations. While the central role of incubators is to provide startups with services, there is usually some financial support ranging from free services, discounted rental fees, some seed funding, to small amounts of cash stipend.
Startups are usually granted low seed investment at the incubation stage in exchange for more extended residency periods and essential support services. After graduating from an incubator, startups journey towards an accelerator usually starts with an application process, followed by rounds of interviews until the final admission is granted.
Accelerator programs usually have a set timeframe ranging from a few weeks to several months. During that time, startups work with a group of experienced mentors to improve their solutions and anticipate potential pitfalls until it makes sound commercial sense. In accelerators, startups have access to better support, mentorship networks, and potential angel investors in exchange for an equity share.
Accelerators empower startups to pitch their solutions in various contests with excellent networking opportunities and media coverage that further enhance their visibility and exposure to tech angel investors and venture capitals.
Incubators & Accelerators in Saudi Arabia
The cards below offer a good overview of the active incubators and accelerators in the Kingdom of Saudi Arabia. Programs such as BADIR, 9/10THS, KAUST, KING SALMAN YOUTH CENTER, and WADI MAKKAH have emerged as the leading players in the local startup ecosystem. While some of those mentioned above are pure incubators offering co-working space and essential support services, others combine both incubation and acceleration programs.