SAUDI START-UPS OVERCOME CHALLENGES LAID BARE BY PANDEMIC

Saudi start-ups are eying opportunities that COVID-19 has opened up in certain sectors.

As online food delivery services remain in high demand following consumers’ reluctance to venture out, online food delivery start-up Jahez raised USD 36 million in Series A funding, led by Hong Kong-based investor Impact46.

The company’s food delivery platform provides a full logistics solution for the restaurant industry, creating jobs for Saudis and expanding the restaurant industry’s customer base.

The company has processed around 20 million orders for major brands, and says it is targeting more than SAR 1 billion in orders this year, sourced from more 12,000 points of sales across the country.

Meanwhile, Saudi on-demand delivery start-up Shgardi also raised a “seven-figure US dollar” investment from Riyadh-based Mad’a Investment Company, according to a media report. Shgardi says it employs 300,000 drivers.

The focus on innovation and targeting new opportunities amid a crisis is characterising the country’s burgeoning start-up culture.

The initiative also shows that the government’s focus on nurturing entrepreneurial talent is paying off.

In a bid to boost the small and medium enterprises (SME) and start-up culture in G20 nations, the group’s Digital Economy Taskforce (DETF) held virtual meetings in June to discuss a comprehensive approach to digital economy policymaking and the future of digitalisation.

G20, under Saudi presidency this year, has focused on developing small business and innovation, even as it counters the immediate challenges of COVID-19.

“Data Flows, Smart Cities, Digital Economy measurement and Digital Security were also on the agenda as well as the Connecting Humanity 2030 initiative,” the G20 said in a press release. “Delegates also discussed digitalisation in the context of the current crisis with a long-term vision for the best use of digital tools to build economic resilience and promote job retention.”

While Saudi Arabia is spearheading a global drive to push digital services to the fore, it is also making a strong effort domestically to spur innovation.

In June, the MISK Academy of Prince Mohammed bin Salman bin Abdulaziz Foundation, along with NEOM City, a USD 500 billion digital city of the future being built in the northwest of the country, said they have launched a new business skills programme.

SPARK is a powerful six-week, intense mentoring programme that is designed for the Saudi youths who want to start their business or join the ecosystem of entrepreneurship by developing their ideas and launching their own venture and create local jobs,” according to the academy.

The programme will help budding entrepreneurs develop their business ideas, identify revenue opportunities, prepare sales forecast, marketing plan, technology and expenses. It will also hone their business presentation skills and successful entries will get support to launch their start-up.

Saudi Arabia has also taken measures to nurture and protect small and medium sized companies to withstand the pandemic.

Saudi Arabian Monetary Authority (SAMA) is working with the kingdom’s largest banks to offer support to small, medium and large corporations.

SAMA rolled out a SAR 50 billion action plan in the first phase “to provide the private sector with aid, in order to consolidate its role in bolstering the national economic growth, through a programme package of measurements, including supporting small and medium size establishments' funding.”

The National Development Fund (NDF) also unveiled programmes worth SAR 22 billion in support of citizens and the private sector.

“These programmes include extending the grace period, restructuring loan payments for the most needy facilities, providing loans to micro, small and medium enterprises, financing working capital, and supporting employment and training programmes for job seekers and the private sector.”

The funds were channelled through development banks of the National Development Fund, such as the Social Development Bank, the Saudi Industrial Development Fund, the Saudi Human Resources Development Fund, the Agricultural Development Fund, the Real Estate Development Fund and the Tourism Development Fund, according to a Saudi Press Agency report.

“This is in addition to other initiatives in co-operation with the General Authority for Small and Medium Enterprises, Kafalah Program and Saudi Export and Import Bank.”

Other companies are also stepping up efforts to support the nascent SME sector.

Payfort, a fintech company owned by Amazom.com Inc. said it has invited more than 100 of its start-up and small and medium business merchant partners to participate in its new #StartUpStayUp initiative, which will help them increase traffic to their websites and boost revenues.

“Payfort will fund a three-month digital marketing campaign worth AED 1 million across multiple media channels, including organic, paid and influencer social campaigns, video content production, email marketing campaigns, and internal marketing promotions,” the company said. “The #StartUpStayUp initiative will also provide all participating merchant partners with increased brand exposure through being featured on Payfort’s digital channels.”