Saudi Arabia has set up a new Information, Communication and Technology (ICT) startup venture fund worth 500 million SAR ($133 million), the kingdom announced this week.
The fund has been set up under a partnership that includes Taqnia, a Saudi firm investing in tech innovation, investment bank Riyadh Financial Capital, General Pension Fund, and General Investment Fund.
Known as the Riyadh Taqnia Capital, the fund will invest in local and international research and development that could fuel the country “towards technology leadership, sustained economic growth, and self-reliance,” Taqnia stated on their website.
The fund will open an international branch in California, while maintaining its headquarters in the Saudi capital.
According to Deal Street Asia, besides ICT, the fund will also focus on energy, sustainability, and advanced materials.
The fund will concentrate on technologies relevant to Saudi Arabia, such as water desalination, renewable energy, and oil and gas exploration.
Deal Street Asia also quoted entrepreneur and startup adviser Nader Ajami who observed that banks in Saudi Arabia were hesitant to fund ventures smaller than an SME, while private debt financiers adopted a one-size-fits-all approach to debtors, regardless of asset class.
According to Deloitte’s report on Private Equity and Venture Capital in the MENA region, oil and gas were still getting the largest percentage of funding, while sectors like IT only received a mere 4% of total investments made.