I’ve seen the fascinating evolution of exit strategies for tech startups in the Kingdom firsthand. I’m deeply embedded in the Saudi Arabian startup ecosystem as an impact investor nowadays. Today, I’d like to share my insights and experiences. I will blend data-driven analysis with personal anecdotes. I hope this post will paint a vivid picture of the current landscape.
Recent IPO Milestones: A Sign of Ecosystem Maturity
Let’s start with some exciting news buzzing in our startup circles. Derayah, a fintech powerhouse founded by Hashem Al Hekail in 2009, just went public on March 10, 2025. I remember listening to Hashem at a conference years ago. His vision for democratizing investment services in KSA was genuinely inspiring. Seeing Derayah’s successful IPO, with shares currently trading at SAR 39.9 and a valuation of around $1 billion, is a testament to the growing strength of the KSA tech sector.
But Derayah isn’t alone in this journey. Let me walk you through some other notable IPOs that have shaped our ecosystem:
Jahez
This food delivery platform, founded in 2016, went public in January 2022. There was a lot of excitement when their shares hit the market at SAR 850. While the current price has adjusted to around SAR 29.7 after a reverse stock split, Jahez still boasts an impressive USD 1.5 billion valuation.
NiceOne
I wish I had followed this beauty e-commerce platform since early 2017. Under my investment criteria, I would have never invested in it. This would be the case even if this unicorn startup had looked back and stared at me. Their recent IPO on January 8, 2025, was a significant milestone. With shares now trading at SAR 42 and a valuation of USD 1.2 billion, it’s clear that NiceOne has found its groove in the market.
Rasan
This insurtech company fascinates me, and I wish I had found it in 2016. After going public in June 2024, Rasan secured a USD 24 million Series E round. Their plan for a second public offering is even more exciting, potentially valuing the company at USD 2 billion.
Emerging Trends: Staying Private Longer
One trend mirrors what we’ve seen in more mature markets like the US. KSA tech start-ups choose to stay private longer. This shift brings both challenges and opportunities:
1. Decline in IPO Activity: Saudi Arabia is expected to lead the region with 27 potential listings in 2025. However, we’ve seen a sharp 70% drop in venture capital funding in 2024.
2. Focus on Late-Stage Funding: There’s a growing “funding gap” for early-stage startups. In 2024, the top five deals will account for 66% of total VC funding.
3. Unicorn Valuations in Private Markets: Companies like Tabby, a fintech startup, have achieved multibillion-dollar valuations while remaining private.
4. Shifting Investor Sentiment: I’ve observed a growing emphasis on sustainable growth models and tangible value creation.
Advice for Founders: Navigating the Exit Landscape
Drawing from my experiences and the current market dynamics, here’s what I’d tell a founder asking about exit strategies:
1. Embrace Patience: Rome wasn’t built in a day, and neither are successful exits. Use this time to build a robust, value-driven business.
2. Focus on Sustainable Growth: In my portfolio, the thriving companies prioritized creating lasting value over quick wins.
3. Prepare for Late-Stage Funding: As our market matures, be ready to attract and effectively utilize larger funding rounds.
4. Explore Multiple Exit Paths: While IPOs grab headlines, don’t overlook M&A opportunities. In 2024, 6 out of 7 M&A transactions in our ecosystem involved local acquirers.
5. Stay Adaptable: Change is the only constant in the startup world. Monitor market conditions and be ready to pivot when necessary.
Looking Ahead: The Future of KSA Tech Exits
I’m optimistic as we continue to build a vibrant, innovative tech ecosystem in Saudi Arabia. The journey from founding a startup to achieving a successful exit is never linear but incredibly rewarding.
I’d love to hear your thoughts and experiences. Have you been involved in any recent exits? What challenges and opportunities do you see for KSA tech startups?
Let’s continue this conversation and work together to shape the future of innovation in our Kingdom.
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IPOs in KSA
I do not intend to cover all the IPOs of tech startups in KSA. Below, I list the most notorious ones at my discretion. This includes Derayah’s recent IPO. Trading for Derayah started on March 10, 2025.
Jahez
Jahez, founded in 2016 by Ghassab Al-Mandil, is an online platform offering food ordering and delivery services. It allows users to discover and order from restaurants nearby and provides doorstep food delivery services.
IPO: On January 5, 2022, the IPO listed price was SAR 850 per share. The market cap was approximately USD 2.4bn. The IPO opening price was SAR 728. The current price is circa SAR 29.7 (after a reverse stock split of x20 on November 30, 2023), and the valuation is approximately USD 1.5bn
NiceOne
Nice one. It is an online platform offering beauty products. It was founded in 2017 by Omar Alolayan and Abdulrahman Alolayan, M.A. The product catalog includes perfumes, nail paints, body care products, etc. Some brands linked to the company are Ajwa Home, Above, Budi, etc. The company also claims to offer home improvement and consumer electronic products.
IPO: On January 8, 2025, the IPO listed price was SAR 10. The IPO opening price was SAR 38.5. The current price is circa SAR 42, and the valuation is approximately USD 1.2bn.
Derayah
Derayah Financial Company was founded by Hashem Al Hekail, on January 6, 2009. It provides brokerage, advisory, and custody services internationally and in the Kingdom of Saudi Arabia. It offers Derayah, a platform for online trading services. Derayah Global is a platform that lets users watch live prices. It also allows creating personal watch lists for stocks, exchange traded funds, and options. Derayah Smart is a digital platform.
IPO: On March 10, 2025, the IPO listed price was SAR 30. The IPO opening price was SAR 33. The current price is circa SAR 39.9, and the valuation is approximately USD 1bn.
Rasan Series E – New Share Offering
Rasan is a provider of car and health insurance services. It was founded in 2016 by Ayman AlFallaj and Moayad Alfallaj. It went public on June 13, 2024, for SAR 37 per share, with a market cap of SAR 3.65bn, or approximately USD 1bn.
Rasan recently raised USD 24m in its Series E round. This was an exit opportunity through an accelerated bookbuild offering. Impact46 VC fund made a 10x return from its first investment in 2021. Big congrats! Impact46 has also successfully exited Jahez, Tamara, and Lendo.
According to Rasan’s website, the company is preparing to list more shares in the stock exchange. The next round will price Rasan at SAR 69 per share, approximately USD 2bn.
Exit Paths in Ksa
Which Series did prior startups IPO in KSA?
Jahez, founded in 2016, went public in 2022 after three founding rounds. The last was Series A in June 2020, which raised USD 36m.
NiceOne, founded in 2017, went public in 2025. The company underwent several rounds of capital increases and equity restructuring. It was finally converted to a joint-stock system in May 2024. Its registered capital increased to SAR 110m pre offering.
Rasan, founded in 2016, went public in 2024 after raising a USD 24m Series B in 2021.
Below is a summary of M&A activity in 2024. Six out of seven M&A transactions took place in KSA, being local acquirers.
Staying private longer?
Are they staying private longer?
Like the USA market, KSA tech startups seem to be staying private longer than before.
According to Nabeel Koshak, CEO of VC firm SVC, at least 13 startups were preparing for IPO in 2024. Still, only Jahez and Derayah exited.
Under the KSA Stock Exchange, only 6 IPOs are foreseen for the next months. To my understanding, none of these correspond to any tech startup.
Which trends do I see?
1. There is a marked decline in IPO activity. Saudi Arabia is expected to lead the region in IPOs in 2025. It anticipates 27 potential listings. Nonetheless, there has been a notable shift in the startup funding landscape. Venture capital funding in Saudi Arabia experienced a sharp decline in 2024. Total investments dropped 70% year-over-year to $700 million across 186 transactions.
2. There is an increased Focus on late-stage funding. As I mentioned in another post, there is a “funding gap,” particularly for early stages. The Saudi Venture Capital Company (SVC) reported that the top five deals in Saudi Arabia accounted for 66% of total VC funding in 2024. This indicates a concentration of investments in select high-performing startups. It suggests that more mature startups are attracting larger funding rounds, which delays their need to go public.
3. Most recent IPOs have been at unicorn valuations, which also seem prevalent in the KSA private market. Companies like Tabby, a fintech startup, recently doubled its valuation to $3.3 billion with a $160 million Series E funding round. This demonstrates that startups can achieve high valuations while remaining private, reducing the immediate pressure to pursue an IPO.
4. Investor sentiment has shifted. The funding contraction has led to increased investor scrutiny. Investors now focus on startups demonstrating tangible value. They look for sustainable growth models. This change encourages startups to stay private longer to build more robust businesses before considering public markets.
5. Availability of KSA government support for private companies. Initiatives like the Saudi Venture Capital Company (SVC) are providing support. Regulatory reforms are providing incentives for startups to grow within the private market.