I am just returning home from the inaugural 24Fintech Conference in Saudi Arabia, and am reflecting on the rapid rise of fintech in the region.
The Kingdom is positioning itself as a center for growth in the fintech sector – and there are a few reasons I’m excited.
1. Government And Regulatory Support
Saudi Arabia’s fintech ecosystem extends beyond the entrepreneurs at the frontier.
The government’s Vision 2030 target is to encourage the establishment of 500 fintechs by the end of the decade. Saudi is already halfway there – with 224 – which already surpasses their interim goal.
One of the largest booths at the event was The Saudi Central Bank (SAMA). While early, they are purportedly looking to support the ecosystem from a regulatory standpoint. They’ve launched a regulatory sandbox – currently housing 19 fintechs and having supported 50 since its 2018 launch.
2. The Rise of Local Unicorns
In my book Out-Innovate (HBR), I documented the phenomenon of startup concentration – once a critical mass of scaled startups is reached, there’s often an explosion of high-value companies in the coming years. Many factors drive this. For example, local venture capital firms who backed the first few startups (and a one-off can be written-off as an exception) see their first exits, creating a recycling of capital in the region. Moreover, a generation of executives have been trained in scaling startups, and ready to venture into their new company or mentor the next generation – and have the confidence to do so.
The Saudi startup ecosystem is showing early signs of this concentration and exits. The Kingdom now boasts at least two homegrown unicorns—Tamara and stc pay, both fintechs (with Tabby joining the club after relocating its headquarters to Saudi Arabia in 2023). This unicorn formation is likely just the beginning. With 13 Saudi startups preparing for IPOs in the next two years and a healthly local IPO & M&A market, we’re witnessing the early stages of what could be an exciting growth phase.
3. Local Market Size
To win in the MENA region, one often used strategy is to expand into Saudi Arabia. Its size, coupled with a young, tech-savvy population and high smartphone penetration, makes it a target for both local and international fintech players.
One example – the Kingdom is to my knowledge the only emerging market supporting two Buy Now, Pay Later (BNPL) unicorns (Tabby and Tamara). This not only speaks to the market’s size but also its customers’ appetite for the product.
Anecdotally, many pitches I receive from MENA startups include a plan to expand to the region.
4. A Growing Venture Capital Ecosystem
Saudi Arabia has over 120 VC funds, who have backed over three thousand startups. Saudi Arabia was the top regional ecosystem for VC funding, with nearly $1.4 billion in capital last year (a 33% increase from 2022). Fintech was a key beneficiary, representing over $700m.
This surge in VC fintech activity isn’t just coming from local sources. Many global investors are actively deploying. One of the two panels I contributed to was with Monica Brand Engel, the cofounder of Quona Capital. She stressed the growing interest from international VCs in the region – and like Fluent Ventures (the fund I work with), is already investing in the region.
5. Local Entrepreneurs Adapting Global Models with a Saudi Twist
Saudi entrepreneurs are not copying and pasting global fintech models—they’re adapting them to fit the unique needs and regulatory landscape of the Kingdom.
My second panel was on creative approaches in fintech with local entrepreneurs. Smeetha Ghosh, the cofounder of Cashee, an app targeting young users in the banking sector explained that while inspired by global players like Greenlight (US) and Henry (UK), Cashee has taken a localization approach – both on the regulatory side and distribution through a bank partnership.
Fintech (like all tech) is not copy-paste. Local context matters. BNPL, which has taken off in the region, has had to be adapted to Shariah law for instance. This blend of global inspiration and local adaptation is key to a vibrant fintech ecosystem.
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The energy I witnessed at the 24Fintech Conference was palpable. Across its intrinsic advantages – a deep local market with a young population, a growing venture capital ecosystem, real exits, and government support, the next few years in Middle East fintech generally, and in Saudi specifically are sure to be interesting.
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