Do Round Sizes Signal Growth?

Often, round sizes signal investor appetites in the VC ecosystem.

To see how an evolution of round size impacts the growing ecosystem of a country, and a region, we track the evolution of KSA's round sizes:

?? Early-Stages

Deals with less than $1M were less interesting with their share declining from 37% in 2022 to 27% in 2023 YTD, as the risk of the very early stage still lingers amidst unstable geopolitical tensions and stringent monetary policies.

?? Mid-Stages

In round size $1M-$5M, the number of transactions QTD was close to those reported in the quarters of 2022’s second half.?Funding, however, stood at $25M QTD, already above what was reported in Q3 and Q4 of 2022, extending the concentration on the aforementioned round size in the growth of the Kingdom’s startups. A similar performance was seen in round size $5M-$20M which already went beyond funding in Q3 and Q4 of last year.

?? Late-Stages

Funding in the $20M+ round size was from the two MEGA deals reported and while funding surpassed all previous quarters for this round size, deals of more than $20M and less than $100M were absent so far in 2023.

?? What does this mean??

Saudi Arabia continues the funding share pattern seen throughout the post-pandemic era?as the country’s growing ecosystem continued to focus on early-stage funding with bigger ticket sizes retaining $1M-$5M as the most valued round size, contrary to the image seen so far in the MENA region and peer countries.

For example, the UAE saw a reshuffle in round size distribution in 2023 YTD with a retained focus on deals of less than $1M. The share of round size $0K-$1M improved from 31% in 2022 to 53% in 2023 YTD, a distribution mirroring the overall MENA region.

?? Last week's funding & acquisitions:

• Munjz raises $5M Series A:?The cloud platform for property and real estate management announced the closing of a Series A investment round of $5M to enhance the startup's position in the Saudi market.
• Nadeera raises $200K in funding: The Lebanon-based social enterprise that provides innovative digitally enabled solutions for solid waste management, has secured a $200K investment.
• Emkan Capital launches $31M Fund: The Saudi venture capital firm focused on early-stage technology start-ups across GCC and broader MENAP has launched a $31M Fund to back early-stage startups.

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