SME

SAUDI TECH START-UPS BUOYED BY NEW FUNDING SCHEME

 

 

The National Technology Development Program (NTDP) has rolled out a new funding initiative in a strategic partnership with Small and Medium Enterprises Loan Guarantee Program (Kafalah) to help small and medium businesses in Saudi Arabia.

The Technical Growth Financing offers guarantees for start-ups and SMEs focused on the technology sector with a maximum limit of 90% of the value of financing, and provides them with loans from SAR 100,000 to SAR 15 million to ensure they can cover the expenses related to expanding their businesses.

“The initiative aims at enabling the growth and development of works of information technology enterprises, in addition to improving the financing of financial institutions licensed by the Saudi Central Bank to the information technology sector, helping in creating success stories for local companies in a way that contributes to achieving huge successes that reflect on increasing the confidence of investors, and other companies to stimulate them to invest in the information and communications technologies sector,” the entities said.

The programme will enable start-ups and SMEs to grow and evolve as they go through their journey from a small project to a full-fledged business.

“The work mechanism of the initiative involves applying for a loan directly by the company from banks and participating financing institutions or through the ‘financing gate’ on the Monsha’at website, where, in turn, these institutions continue procedures with Kafalah programme that directly deals with the initiative,” the companies noted. “Kafalah also contributes to evaluating and downsizing risks for enterprises working in the ICT sector.”

NTDP is spearheading a number of initiatives in the digital economy, and is taking a leading role in providing incentives and access to financing and investment for local technology companies, helping them to grow their business and increase their competitiveness locally and globally.

“NTDP works to attract global competencies to contribute to local talents development and localisation of knowledge,” according to the entity. “It also helps attract technology entrepreneurs while enabling local technology talents to flourish and succeed within the KSA technology ecosystem.”

NURTURING TALENT

In August, the kingdom’s major players announced a slew of technological programmes with a combined value of SAR 4 billion to boost the local digital ecosystem and develop a deep pool of Saudi talent.

“The move, done in co-operation with ten of the world's key technology giants, aims to enhance digital capabilities and designed to create one programmer out of every 100 Saudi nationals by 2030, in addition to encouraging innovation and creativity and achieving global leadership,” according to the entities involved in the programme, such as the Ministry of Communications and Information Technology, the Saudi Data and AI Authority (SDAIA) and the Saudi Federation for Cybersecurity, Programming and Drones.

US technology giants Alphabet Inc., the parent company of Google, Amazon.com Inc., and Oracle Corp., will also offer specialised training to raise the digital capabilities of young national cadres, and support other centres working in the field of innovation in technological entrepreneurship.

“The Saudi Federation for Cyber Security, Programming and Drones and the Ministry of Communications and Information Technology launched the biggest technological initiatives represented by the ‘Tuwaiq Camp 1000’ initiative, which ends with employment and will be held in the kingdom's 13 regions through 40 training camps covering four fields: cybersecurity, programming, artificial intelligence and data science, and electronic games industry,” the company said.

START-UP FUNDING

The kingdom’s start-up ecosystem continues to garner interest, with property management company Mabaat securing SAR 9 million from UAE-based venture capital fund Derayah Ventures.

The start-up focuses on renting out mid- to high-end residential units on behalf of owners on a short-term basis, and manages the rental process from marketing, to booking, payments, and property maintenance. The Saudi start-up aims to use the funding to boost its marketing strategy for domestic travellers, enhance its technology infrastructure, and expand its growing team.

Meanwhile, the Wa’ed Entrepreneurship Roadshow, which aims to discover the best and brightest entrepreneurs and start-ups in the kingdom, said it plans to highlight business ideas competing for venture capital funding of up to SAR 19 million and loans of up to SAR 5 million.

“With partners such as the Royal Commission for Jubail and Yanbu, the Small and Medium Enterprises General Authority (Monsha’at), the King Abdullah University of Science and Technology, Nama Almunawarah and Wadi Makkah, Wa’ed will select a new generation of entrepreneurs whose game-changing ideas open economic horizons, create opportunities for all Saudis and fill gaps in the kingdom,” the company said.