RIYADH: International investors accounted for the majority of venture capital participation in Saudi Arabia in 2025, underscoring rising global interest in the Kingdom’s startup ecosystem.
Non-Saudi investors represented 58 percent of total investor participation during the year, while overall participation reached a new high with 194 investors active in the Kingdom’s startups, up 38 percent year on year, according to data from MAGNiTT.
Saudi Arabia closed 2025 as the Middle East and North Africa’s largest venture capital market, accounting for 45 percent of total regional VC funding.
Venture capital investment in the Kingdom reached a record $1.7 billion across 257 transactions, marking all-time highs in both capital deployed and deal volume and widening the gap with other regional markets.
The findings were published in MAGNiTT’s FY 2025 Saudi Arabia Venture Capital Report, released in partnership with SVC, which described 2025 as a milestone year for the Kingdom’s venture ecosystem.
Saudi Arabia also became the most active VC market in the region by deal count for the first time, overtaking the UAE, as transactions rose 45 percent year over year. Since 2018, annual deal volume has expanded nearly fivefold.
“What stood out in 2025 is not just Saudi Arabia’s record capital deployment, but the breadth of growth across stages, the depth of international participation, and early signs of a more complete venture cycle taking shape,” said Philip Bahoshy, CEO of MAGNiTT.
Growth during the year was distributed across funding stages, with non-mega deals rising 101 percent year over year to $1.15 billion, highlighting the strength of the early- and mid-stage pipeline.
Mega rounds also rebounded sharply, increasing 339 percent year on year, reflecting renewed late-stage investor confidence and improved capital availability for scaling companies.
Fintech led sector activity in 2025, raising $506 million across 55 deals. Enterprise software emerged as the second-most active sector, while gaming, transport and logistics, and travel and tourism attracted relatively large deal sizes, pointing to increasing sectoral diversification.
Exit activity also continued to strengthen, with 10 mergers and acquisitions recorded during the year, the highest annual total to date in Saudi Arabia.
Six of those transactions were led by Saudi-based buyers, signaling rising domestic liquidity and a growing corporate appetite for technology-led growth.
Source: www.arabnews.com