Notes from the last two years of observation
Cristian Ranallo
Executive MBA @ESCP #2 in FT global ranking / Senior Business Innovation Manager Beyond Insurance @Unipol / Strategy Director / Market Research & Intelligence/ Head of innovation/ Director of innovation
Just back from my last exploration from the Saudi Kingdom, I just wanted to share some
The Middle East and North Africa (MENA) region has undergone a remarkable transformation, emerging as a vibrant hub for innovation and entrepreneurship. This evolution is particularly evident in key cities like Riyadh and Dubai, which have become focal points for technological advancement and startup growth.
Riyadh: a nexus of innovation
One of the most ambitious projects I discovered in Saudi is NEOM, a futuristic mega project that integrates AI-driven infrastructure, sustainable energy solutions, and autonomous transportation. Saudi Arabia is also making bold strides in AI and quantum computing, forming strategic partnerships to develop local talent and strengthen its research and development ecosystem. Beyond startups, Saudi Arabia is expanding its deep-tech and space ambitions, investing in satellite technologies, deep space exploration, and astronaut training programs. Cybersecurity and digital transformation remain top priorities. Additionally, Saudi is leading the way in 5G and next-generation connectivity, reinforcing its commitment to building an advanced digital economy.
So the presence of global tech giants such as Google, Microsoft, and Oracle underscores Saudi Arabia’s growing influence in the innovation landscape. These companies continue to announce major partnerships that further integrate cutting-edge technologies into the country’s development plans.
I also discovered LEAP event, hosted annually in Riyadh, that has rapidly emerged as one of the most influential technology events in the world, attracting global tech leaders, startups, and investors. As part of Saudi Arabia’s Vision 2030, the event plays a crucial role in positioning the Kingdom as a leader in AI, robotics, and deep tech.
Riyadh's commitment to fostering a robust innovation ecosystem is evident through initiatives like the Ilmi Riyadh science and tech center. This center aims to serve as a beacon for scientific exploration and technological development in the region. Additionally, the city's emphasis on smart infrastructure is showcased by projects such as the Riyadh smart city, which integrates cutting-edge technologies to enhance urban living.
Dubai: pioneering the digital economy
The United Arab Emirates has firmly established itself as a global innovation hub, with Dubai and Abu Dhabi leading the charge in digital transformation, AI, and deep tech advancements. The country’s ambitious initiatives, such as the Dubai Digital Economy Strategy and Abu Dhabi’s Hub71, are attracting top-tier startups, investors, and corporate innovators. AI, blockchain, and fintech are at the heart of the UAE’s growth, supported by progressive regulations and strategic public-private collaborations. Dubai’s Innovation Majlis and the UAE’s investments in 3D printing, robotics, and smart mobility further solidify its reputation as a pioneer in future technologies. As the UAE continues to scale its innovation ecosystem, it remains a key gateway for global companies looking to expand into the MENA region, offering an unparalleled environment for technology-driven growth.
Dubai continues to solidify its position as a leader in the digital economy. The establishment of the innovation Majlis in 2009 at the emirates group headquarters exemplifies the city's dedication to fostering collaborative innovation. Moreover, the launch of new innovation hubs focused on developing 3d printing, robotics, and ai experiences underscores Dubai's proactive approach to embracing emerging technologies.
MENA's startup ecosystem: growth and opportunities
The MENA startup ecosystem has witnessed exponential growth, with venture capital funding reaching unprecedented levels. In 2024, the MENA startup ecosystem demonstrated resilience amid global economic challenges, securing a total of $2.3 billion in investments across 610 deals. This represents a 42% decline in funding compared to the previous year; however, when excluding debt financing, the decrease narrows to 11%, indicating sustained investor confidence in the region's entrepreneurial ventures. Meanwhile the UAE maintained its leadership position, attracting $1.1 billion in startup investments, which accounts for nearly half of the total funding in the MENA region. Notable deals include for i.e. Eyewa, an online eyewear retailer, which raised $100 million in November 2024, underscoring the robust growth of the e-commerce sector. In total, in December, 2024, MENA startups collectively raised $279 million across 42 deals, marking an 8% increase from November. Debt financing constituted 44% of this total, highlighting a diversified approach to funding.
Overall, despite a slight downturn in total funding, the MENA startup ecosystem continues to exhibit robust activity and diversification, with significant investments across various sectors, including fintech, e-commerce, and cybersecurity.
Challenges and the path forward
Despite these advancements, challenges persist. The concentration of venture capital in specific sectors and geographies highlights the need for a more diversified investment approaches. Initiatives like Village capital's Middle east and North africa ecosystem builders program are instrumental in addressing these disparities by fostering cross-border collaboration and supporting locally-led entrepreneur support organizations.
Having closely observed the MENA region's evolution, it's inspiring to witness cities like Riyadh and Dubai spearheading innovation. Their strategic investments in technology and infrastructure not only position them as regional leaders but also as global contenders in the innovation landscape. For entrepreneurs and managers in Riyadh and the Emirates, the current climate offers unparalleled opportunities to engage with a dynamic and rapidly evolving market.
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