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State-backed Saudi Venture Capital (SVC) is investing $5 million in a fintech fund managed by MENA-based VentureSouq (VSQ).
The investment is part of a strategy to support the development of the venture capital ecosystem and boost the fintech sector in the kingdom, according to a statement.
Established in 2018, SVC is a government investment entity that seeks to support start-ups and SMEs. It has backed 43 funds that have invested in more than 700 businesses.
The subscription agreement for the new investment has already been signed.
“This investment also comes to foster the growth witnessed recently by the fintech sector, which made it at the forefront of the venture capital scene in Saudi Arabia in 2022 in terms of the number of deals and value of investment,” said Nabeel Koshak, CEO and Board Member at SVC.
Koshak noted that the growth of the fintech sector in Saudi Arabia has been driven by the launch of several government initiatives.
Last year, Saudi Arabia unveiled its fintech strategy, which seeks to increase the number of fintech firms operating in the kingdom from 82 to 230 by 2025.
It also seeks to expand the share of digital transactions to 70% and raise the volume of venture capital investments in fintech firms to SAR 2.6 billion ($693 million) in about two years.
By 2030, Saudi looks to increase the number of fintech companies to 525 and create 18,000 jobs in the sector.
(Writing by Cleofe Maceda; editing by Seban Scaria)
