This article provides a cursory overview of the reality of the fintech sector in Saudi Arabia and its impact on the venture capital industry over the past three years. It also reviews a list of the 6 most potent Saudi fintech companies included in Forbes’ list of the top 30 fintech companies in the Middle East for 2023.
The Fintech sector in Saudi Arabia plays a pivotal role in the venture capital industry. Over the past two years, fintech companies have been able to achieve a high level of investment, with SAR 1.3 billion invested in 2020-2021 and SAR 1.5 billion in 2021-2022, and the availability of venture capital from the Pre-Seed stage to the investment series A and beyond, which has helped Saudi fintech companies through all stages of their growth.
In the past year, the sector has also seen increased interest from international investors to support Saudi FinTech companies and increase exit activity through acquisitions and listings in the local market, giving fintech entrepreneurs the ability to exit and investors the ability to crystallize the returns on their investments. This is what the report of the MAGNITT platform revealed about the reality of venture investment in the Kingdom of Saudi Arabia for the first half of 2023 in collaboration with SVC, a subsidiary of the Small and Medium Enterprises Bank, one of the development banks run by the Saudi National Development Fund.
Although the pace of venture capital in the Kingdom’s fintech sector slowed by 90% year-on-year in the first half of 2023, according to the MAGNITT report, the industry declined from its position as the most traded sector in Saudi Arabia to lead e-commerce and retail by one deal, however, SVC’s recent launch of the Investing in FinTech Funds product, with $80 million of the product’s investment portfolio allocated, promises to thrive in the sector.
Here are the 6 most potent Saudi fintech companies included in Forbes’ list of the top 30 fintech companies in the Middle East for 2023.
1. PayTabs Group
- Date of Establishment: 2014
- Headquarters: Saudi Arabia
- Description: Payment solutions company
- Group CEO & Founder: Abdulaziz Al Jouf
PayTabs provides the infrastructure for B2B payment solutions, including digital invoicing for businesses, QR code payments, social media payments, point of sale, and switching platforms. It operates in Saudi Arabia, the U.A.E., Egypt, Oman, Kuwait, Jordan, Palestine, Türkiye, and Azerbaijan. In 2022, the company launched its unified payments processing orchestration solution, PayTabs SwitchOn. It also acquired the Saudi point-of-sale company Digital Pay in November and Türkiye’s social commerce platform Paymes in December to complement its existing retail portfolio. With over 225,000 app downloads and 1.1 million active merchants, PayTabs processed transactions worth $8.2 billion in 2022.
2. Tamara
- Date of Establishment: 2020
- Headquarters: Saudi Arabia
- Description: Buy-Now, Pay-Later platform
- Founders: Abdulmajeed Alsukhan,Turki Bin Zarah, Abdulmohsen Albabtain
Tamara allows online and in-store shoppers in Saudi Arabia, the U.A.E., and Kuwait to split their payments across three installments with no hidden fees. Today, it serves over six million customers and 15,000 partner merchants, including IKEA, SHEIN, Adidas, Noon, and Jarir. Tamara claims to have witnessed over 4.5 times growth in its gross merchandise value in 2022 compared to 2021. In March 2023, it secured a debt facility of $150 million from Goldman Sachs, bringing its total funding in equity and debt to $366 million. Tamara’s investors include Sanabil, a subsidiary of Saudi’s Public Investment Fund, Checkout.com, Coatue, Shorooq Partners, and Endeavor Catalyst.
3. HyperPay
- Date of Establishment: 2014
- Headquarters: Saudi Arabia
- Description: Payment gateway
- Founder: Muhannad Ebwini
HyperPay offers e-commerce payment services to merchants, including e-payment gateways, invoicing services, pay-out solutions, and reporting and analytics. It has a presence in Saudi Arabia, the U.A.E., Jordan, Egypt, Iraq, and Lebanon and facilitated transactions of $7 billion between merchants and companies in 2022, up from $4.7 billion in 2021. Its clients include Absher, Jarir, Bcare, and Tameeni, along with banks such as Al Rajhi Bank, FAB, and SABB. In January 2023, it signed a cooperation agreement with Arab Bank to provide e-payment services to the bank’s customers in Jordan. Today, HyperPay has 5,000 active users.
Also Read: 6 FinTech Startups in the UAE on the Path to Economic Boom
4. Rasan Information Technology
- Date of Establishment: 2016
- Headquarters: Saudi Arabia
- Description: Insurtech and banking solutions
- Founders: Moayad Alfallaj, Suliman Alfallaj, Thamer Alfallaj, Ayman Alfallaj
Rasan offers insurance and banking solutions through Tameeni Motor, Tameeni SME Health, AwalMazad, and Treza Motor Leasing. It has over 10 million users. Tameeni enables retail and SME customers to compare insurance prices and coverage, then select and pay for a policy. Other brands under the company include Treza, a B2B leasing insurance platform connecting various banks with insurance companies, and AwalMazad, an online auction platform helping insurance companies and banks sell salvaged or repossessed vehicles in Saudi Arabia. The company operates mainly in Saudi Arabia and has offices in Egypt and the U.A.E. In 2022, customers used the platform to buy insurance policies worth $1.2 billion. It plans for an IPO in 2023.
5. Hala
- Date of Establishment: 2018
- Headquarters: Saudi Arabia
- Description: Digital financial platform
- Founders: Maher Loubieh, Esam Alnahdi
Hala allows SMEs to digitize their payments and manage their sales and operations. Its services include digital wallets, cards, cashier solutions, and POS devices. Today, it serves more than 50,000 merchants and reached $350 million in monthly gross merchandise value during 2022, with over 233 million transactions, as of December 2022. In February 2023, Hala acquired the U.A.E.-based online payment platform Paymennt.com. The startup has raised $43.4 million in funding to date. It is licensed in Saudi Arabia and the U.A.E.
6. Lean Technologies
- Date of Establishment: 2019
- Headquarters: Saudi Arabia
- Description: Open banking platform
- Founders: Hisham Al-Falih, Aditya Sarkar, Ashu Gupta
Lean is an open banking technology service provider that connects companies to their users’ bank accounts to initiate instant payments and retrieve account information. Headquartered in Saudi Arabia, it has offices in the U.A.E., Egypt, and London. Lean has over 100 clients, including Binance, e&, Careem, Al Futtaim, and Tabby. In January 2022, the startup raised $33 million in a Series A funding round led by Sequoia Capital India.
Also Read: 8 Best Fintech Companies in Egypt {Top Ranking}
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Last Updated on November 23, 2023 by Safiya K
