Saudi Arabian Investors Show Growing Appetite for U.S. Startups

Investors from Saudi Arabia are increasingly showing a strong interest in U.S. startups, as indicated by recent funding rounds in the tech sector. Notably, these investors are diversifying beyond traditional areas like energy and sports, and are now exploring deals with U.S.-based startups. This trend is highlighted by recent funding rounds involving companies like Nile and Axiom Space, demonstrating Saudi investors’ growing appetite for U.S. startup investments.

Crunchbase data reveals a consistent rise in Saudi Arabia-based investors’ involvement in U.S. startup funding deals. Since 2019, Saudi firms have been actively participating in a greater number of funding rounds, both leading and co-leading them. This upward trajectory in investment activity includes an increase in the challenging year of 2022, when many other VC and growth firms were scaling back.

In 2019, Saudi-based firms were involved in just nine funding rounds, but that number rose to 16 the following year and further to 23 in 2021, reflecting the peak of the venture market. Despite the broader venture market slowdown, 2022 saw a significant jump of almost 40%, with 32 funding deals by Saudi firms. In 2023, there has been a slight decline, with participation in 13 deals so far.

Between 2019 and 2021, Saudi firms led or co-led 14 deals. In 2022, this number surged to 12, with an additional six deals co-led this year. Over the years, various Saudi forms and funds have invested in U.S. startups, with many taking the lead or co-leading deals.

Noteworthy Saudi Investors

Among these Saudi investors, the Public Investment Fund of Saudi Arabia stands out, leading or co-leading several significant deals, including Uber and Lucid Motors. Sanabil also ranks high, co-leading deals such as the Nile Series C. Prosperity7 and Saudi Aramco Energy Ventures have been active in leading or co-leading funding rounds as well.

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Saudi Arabia’s increasing interest in U.S. startups aligns with the global nature of venture capital. Despite the current challenges in the venture market, Saudi Arabian investors remain proactive and aggressive in their approach. As the recent funding rounds demonstrate, the Middle Eastern nation’s investment in U.S. startups is likely to continue growing and thriving in the coming years.