Sabine El Najjar, Chief Commercial Officer and KSA Managing Director - Silkhaus 

Saudi Arabia is currently experiencing a transformative shift in its tourism and real estate sectors, driven by the ambitious Vision 2030. As the Kingdom positions itself as a global tourism and business hub, the short-term rental market is emerging as a key enabler for growth in the hospitality industry.  

At the heart of Saudi Arabia’s short-term rental growth is Vision 2030, the country’s long-term economic diversification strategy. With the goal of attracting 150 million annual visitors by 2030, the government is heavily investing in infrastructure, hospitality, and tourism experiences. Mega projects such as NEOM, The Red Sea Project, Qiddiya, and Diriyah Gate are creating new destinations, increasing the need for expansive accommodation options beyond traditional hotels. A number of major trends in the market are indicative of the demand from guests.  

Rising Demand from Business Travelers 

The Saudi government is recognising the importance of short-term rentals in meeting this demand and has been working on regulatory frameworks that ensure a structured and professional rental market while encouraging investment. By facilitating licensing processes, improving property management standards, and supporting professional operators, the government is making it easier for both local and international players to enter and thrive in this space. 

Saudi Arabia’s rapidly expanding business hubs, particularly in Riyadh, Jeddah, and NEOM, are fueling a surge in demand for accommodations from corporate travelers. Riyadh, the capital and financial center, is home to multinational corporations, government institutions, and major industry events. Meanwhile, NEOM is attracting global talent, with business executives, project managers, and expatriates needing flexible, high-quality accommodation. 

Unlike traditional hotels, short-term rental properties offer business travelers more space, privacy, and home-like amenities, making them a preferred choice for extended stays. 

Regulatory Evolution & Licensing Compliance 

As the offer for short-term rental options matures, the Saudi government is taking steps to ensure that operators comply with hospitality standards, taxation policies, and safety regulations. In the past, short-term rentals were dominated by individual hosts, but now, new regulations are favoring structured property management companies that can provide a professional and consistent experience. 

Authorities are implementing clearer licensing requirements, which will help establish trust and reliability in the sector. These regulations will likely set minimum quality standards, pricing guidelines, and guest verification procedures, ensuring that short-term rentals align with Saudi Arabia’s vision for a high-quality tourism and business environment. 

Those who align with regulations early on will gain a competitive advantage, ensuring for themselves a stable position in a market set to grow relentlessly in the next few years. 

Growth of Branded & Serviced Apartments Create Trust with Guests 

One of the most noticeable trends in Saudi Arabia’s short-term rental market is the growing preference for branded and serviced apartments. Unlike traditional vacation rentals, serviced apartments offer hotel-like services such as housekeeping, concierge support, and premium amenities, making them particularly attractive to high-net-worth individuals, corporate travelers, and families. 

This trend is especially evident among Saudi families traveling for major events, such as Riyadh Season and Jeddah Season. These large-scale cultural and entertainment festivals attract millions of visitors, creating demand for luxurious, spacious, and well-managed accommodations. Instead of booking hotel rooms, families prefer short-term rental apartments that offer more flexibility and privacy, particularly when traveling in groups. 

Religious tourism in Makkah and Madinah is further driving demand for short-term rentals. Pilgrims visiting these cities for Hajj and Umrah often seek accommodation that combines comfort, convenience, and affordability, making professionally managed rental properties a desirable alternative to hotels. 

Increase in Market Players & Investment Opportunities 

With demand on the rise, both local and international operators are expanding their footprint in Saudi Arabia. Since 2020-2021, local players have been actively scaling their businesses across multiple cities, capitalizing on the surge in demand. At the same time, global short-term rental companies like Silkhaus have entered the market, recognizing Saudi Arabia’s potential as a major hospitality hub. 

This influx of experienced operators, technology-driven platforms, and professional management firms is reshaping the industry: guests can expect standardized service, seamless booking experiences, and premium quality—factors that were previously inconsistent in the Saudi short-term rental market. 

For investors, Saudi Arabia presents a lucrative opportunity in short-term rentals. The combination of rising tourism, strong government backing, and increasing professionalization of the sector makes it an attractive space for real estate developers, hospitality brands, and property owners looking to maximize returns. 

Looking Ahead: What’s Next for Saudi’s Short-Term Rental Market? 

Saudi Arabia’s short-term rental market is entering a pivotal phase, driven by the country’s ambitious event calendar of the next few years and increasing global visibility. Major international events like the FIFA World Cup and Expo are on the horizon, and demand for high-quality, well-located accommodations will surge. Operators, to keep pace, must scale rapidly: portfolio expansion, distribution channels optimization, and technology leverage for higher guest volumes are the next must-have. These years will also push the industry toward greater standardization, as travellers expect seamless, hotel-like experiences. 

At the same time, we expect the competitive landscape to shift. As the market matures and regulatory frameworks stabilize, we can expect a wave of consolidation. Larger players will likely absorb smaller operators who struggle to meet evolving guest expectations and compliance requirements. Institutional investors, hotel brands, and real estate funds may also enter the space, bringing greater professionalism and capital to accelerate growth. The industry will transition from fragmented growth to a more structured and competitive ecosystem, where scale, operational efficiency, and brand reputation will define long-term success. 

Saudi Arabia’s short-term rental market is definitely entering an exciting phase of growth and transformation. With strong government backing, evolving regulations, and increasing demand from business and leisure travelers, the sector is rapidly becoming a key pillar of the Kingdom’s tourism strategy. 

As local and international players continue to scale operations, and improve service quality, Saudi Arabia is well-positioned to become a leading market for short-term rentals in the Middle East. For investors, property owners, and hospitality operators, the time to enter this dynamic market is now. 

Ghada Ismail

Saudi Arabia is racing toward a tech-driven future, with technologies like Web3 and blockchain leading the way. As the Kingdom reshapes its economy under Vision 2030, blockchain's promise of openness and security is gaining attention, with industries poised for change.

To explore this further, Sharikat Mubasher spoke with Dan Dimitriu, a seasoned consultant who has advised governments and major companies. Dan works with countries and business leaders worldwide at the forefront of innovation. He shares how the Metaverse could boost Saudi tourism and how Web3 can improve gaming, retail, and education. The discussion also covers new investment opportunities, the need for clear rules, and how Saudi startups are teaming up with global players to grow the Web3 scene.

1. What first sparked your interest in Web3 and blockchain technologies?

My fascination with Web3 and blockchain began with their potential to revolutionize traditional industries through decentralization and transparency. As a consultant to governments and FTSE 500 companies, I've witnessed firsthand how blockchain can streamline operations and enhance trust across various sectors. My background in music also instilled in me the value of creativity and innovation, which aligns perfectly with the disruptive nature of Web3.

2. Could you explain what the Metaverse is and how Saudi Arabia could leverage it across key sectors?

The Metaverse is a decentralized, immersive digital environment that enables new forms of interaction and engagement. In Saudi Arabia, I can see the Metaverse transforming tourism by creating virtual experiences of historical sites. With the tourism market projected to reach USD 110.1 billion by 2033, growing at a CAGR of 8.4%, the Metaverse can increase interest and drive physical visits through virtual tours of Al-Ula or the Red Sea resorts. This aligns with Saudi Arabia's Vision 2030 goals of economic diversification and technological advancement. Additionally, the Metaverse can enhance retail and education by providing immersive customer experiences and educational outcomes.

3. How do you see Web3 fitting into Saudi Arabia's rapidly advancing digital transformation?

Web3 is integral to Saudi Arabia's digital transformation, as evidenced - amongst other things - by the recent launch of the Web3 Alliance of Saudi Arabia, which aims to accelerate blockchain innovation in line with Vision 2030.

I strongly believe that Web3 can significantly impact industries like gaming, a strong industry in Saudi, which is projected to grow at a CAGR of 30% from 2024 to 2030, reaching USD 28.86 billion by 2030. Web3 can also enhance finance, education, and healthcare by providing decentralized solutions that increase transparency and efficiency.

4. How can policymakers create a balanced regulatory framework for blockchain innovation?

Creating a balanced regulatory framework for blockchain in Saudi Arabia requires policymakers to be tech-savvy pioneers, navigating innovation while safeguarding public interest. The Terra Luna collapse underscored the need for a global regulatory shift, whereby policymakers understand technology deeply and engage with industry stakeholders to develop clear guidelines that ensure investor protection and market stability whilst not stifling innovation. This includes setting AML and KYC standards and establishing regulatory sandboxes. By embracing innovation, Saudi Arabia can lead in blockchain regulation, similar to the UAE's approach.

5. What role could blockchain play in boosting trust, payments, or product authenticity in Saudi Arabia's e-commerce sector?

Blockchain is a powerful, yet still misunderstood technology in many circles. As a technology it can significantly enhance trust in e-commerce by providing transparent and secure transactions, ensuring product authenticity through immutable records, and streamlining payments with cryptocurrencies. This leads to faster, more reliable transactions, crucial for Saudi Arabia's growing e-commerce market.

6. Where do you see the strongest investment opportunities for Web3 startups in the Saudi market?

I would say the strongest investment opportunities lie in gaming, fintech, and e-commerce, where there is a growing demand for decentralized solutions. Additionally, foundational infrastructure and protocol startups present significant opportunities for entrepreneurs and investors.

7. How can Saudi startups collaborate with global Web3 innovators to accelerate adoption locally?

As with every ecosystem, it's a classic chicken and egg scenario: to attract more global investors, you need more startups, but startups require funding to grow. Despite this challenge, I've witnessed the Saudi Web3 ecosystem make steady progress, thanks to a diverse range of players. Global event brands like Outeredge are bringing their conferences to the market, while local startups like Takadao and investors like Adaverse are spearheading community-building efforts through meetups. Additionally, initiatives like the launch of WASA by The Sandbox, Animoca Brands, and Outlier Ventures are further boosting the ecosystem. It's a gradual but promising journey, and raising awareness about these developments is key to accelerating its growth.

8. What emerging trend in Web3 excites you most, and how could Saudi Arabia embrace it early?

One of the most exciting trends in Web3 is the rise of decentralized social media and community-driven platforms. Given Saudi Arabia’s strong cultural emphasis on privacy, this trend aligns well with local values by offering users greater control over their data and digital identities. Given the strong consumer appetite for new solutions, I believe Saudi startups have a unique opportunity to develop local decentralized social media solutions tailored to the region’s needs.

Kholoud Hussein 

In recent years, Saudi Arabia has emerged as one of the most ambitious economic reformers on the global stage. Spearheaded by the Kingdom’s Vision 2030—a transformative blueprint introduced by Crown Prince Mohammed bin Salman in 2016—Saudi Arabia is actively reshaping its economic landscape to reduce dependency on oil, empower the private sector, and build a thriving, diversified economy. This vision has set into motion one of the most comprehensive national transformation strategies in the world, drawing the attention of global investors, multinational corporations, and a new generation of entrepreneurs eager to be part of the change.

What was once a largely oil-centric economy rapidly evolves into a vibrant business hub driven by innovation, advanced technology, sustainability, and cross-border collaboration. Mega projects like NEOM, wide-ranging regulatory reforms, and massive state investments in non-oil sectors are redefining what it means to do business in the Kingdom. As Saudi Arabia repositions itself as a regional powerhouse and a global business destination, the momentum is unmistakable—new opportunities are surging across all fronts, and the private sector is stepping into the spotlight like never before.

Doing Business in Saudi Arabia: New Opportunities Surge Under Saudi Vision 2030

Saudi Arabia's Vision 2030, unveiled in 2016, represents a transformative blueprint aimed at diversifying the Kingdom's economy, reducing its reliance on oil, and fostering a vibrant, sustainable future. As the initiative progresses, it has opened a plethora of opportunities across various sectors, attracting both local and international investors. This article delves into the burgeoning business landscape in Saudi Arabia under Vision 2030, highlighting key sectors, recent developments, and insights from officials and business leaders.

Economic Diversification: A Strategic Imperative

Historically dependent on oil revenues, Saudi Arabia has recognized the necessity of economic diversification to ensure long-term stability and growth. Vision 2030 aims to increase the non-oil sector's contribution to GDP from 16% to 50% by 2030. Notably, the non-oil sector's contribution to GDP had already reached approximately 60% by 2023, up from 50% in 2016, indicating significant progress toward this goal. 

Crown Prince Mohammed bin Salman articulated this vision, stating, "We will begin immediately delivering the overarching plans and programs we have set out. Together, with the help of Allah, we can strengthen the Kingdom of Saudi Arabia’s position as a great nation in which we should all feel an immense pride.

Key Sectors Driving Growth

Tourism and Entertainment

The Kingdom has identified tourism as a pivotal sector for diversification. Ambitious projects like NEOM, a $500 billion megacity, and the Red Sea Project, focusing on luxury resort development, exemplify Saudi Arabia's commitment to becoming a premier global tourism destination. The goal is to attract 100 million annual visitors by 2030 and increase tourism's contribution to GDP from 3% to 10%.

In 2023, tourism income surged by 38%, leading to a record service trade surplus. This growth underscores the sector's potential and the effectiveness of initiatives under Vision 2030.

Renewable Energy

Saudi Arabia is making significant strides in renewable energy, aiming to generate 50% of its energy from renewable sources by 2030. Projects like the Sakaka Solar Power Plant and planned wind farms highlight the Kingdom's commitment to sustainability. These initiatives not only reduce carbon emissions but also foster innovation and create job opportunities within the clean energy sector. 

Technology and Innovation

The Kingdom is positioning itself as a hub for technology and innovation. Hosting events like the Global AI Summit, which featured top AI companies such as Nvidia, Google, and Microsoft, reflects Saudi Arabia's ambition in this domain. Notably, a collaboration between chip company Groq and Saudi Aramco aims to establish the largest AI inference data center, aligning with Vision 2030's goal to diversify the economy and reduce oil dependency.

Mining and Metals

In November 2024, Saudi Arabia signed nine investment deals valued over $9.32 billion in the metals and mining sectors with firms including India's Vedanta and China's Zijin Group. These agreements, part of the National Investment Strategy under Vision 2030, aim to diversify the economy and reduce dependency on fossil fuels. Notable investments include Vedanta's 7.5 billion riyals project for copper facilities at Ras Al-Khair and Zijin's phased investment up to SAR 6 billion focusing on a zinc smelter, lithium carbonate extraction facility, and a copper refinery. 

Business Environment and Investment Climate

Vision 2030 has ushered in significant regulatory reforms to enhance the business environment. The Kingdom aims to improve its business climate by restructuring economic cities, creating special zones, and deregulating the energy market to boost productivity and facilitate its journey to becoming one of the largest economies globally. 

The number of foreign investment licenses issued in Saudi Arabia has been on the rise, reflecting growing investor confidence. Additionally, the Kingdom's sovereign wealth fund and five of its regional counterparts are on track to control $18 trillion in assets by 2030, marking a 50% surge from the end of 2024. 

However, the ambitious projects and expansionary spending have led to projected budget deficits. The 2024 budget anticipates a $21.06 billion deficit, with further deficits projected in subsequent years as the Kingdom continues to build new sectors to pivot away from oil. 

Workforce Development and Employment

A central pillar of Vision 2030 is the development of the Saudi workforce. The unemployment rate decreased from 12.3% in 2016 to 7.1% in Q3 of 2024, reflecting successful efforts in job creation. Moreover, over 1.27 million small and medium-sized enterprises (SMEs) were registered in 2023, highlighting the Kingdom's support for innovation and entrepreneurship. 

Challenges and Considerations

While progress under Vision 2030 is notable, challenges remain. The ambitious nature of the projects requires substantial investment, leading to budget deficits in the short term. Additionally, the success of these initiatives hinges on effective implementation, continuous regulatory reforms, and the ability to attract and retain both domestic and foreign investment.

As Saudi Arabia continues its transformative journey, the global business community watches closely, recognizing the Kingdom's potential as a dynamic and diversified economy. The coming years will be crucial in determining the long-term success of Vision 2030 and its impact on the regional and global economic landscape.

Finally, Saudi Arabia's Vision 2030 is more than just a roadmap—it's a bold commitment to economic reinvention. Through sweeping reforms, massive investments, and sectoral diversification, the Kingdom is opening its doors to global investors, entrepreneurs, and innovators like never before. Whether it's in technology, tourism, mining, or green energy, the opportunities are vast and growing. As Crown Prince Mohammed bin Salman envisioned, Saudi Arabia is not only shaping its economic future but also emerging as a key player in the global marketplace. For businesses looking to expand into a dynamic, high-growth market, the time to look toward the Kingdom is now.

Ghada Ismail

In this final chapter of our series on why businesses don’t survive their first year, we tackle two of the most insidious threats to early-stage startups: legal pitfalls and founder burnout. These aren’t just external factors that can derail your business; they’re intertwined challenges that can quickly spiral out of control. As a founder, the pressure can feel unrelenting. You're juggling everything from contracts to customer acquisition, but when things go wrong on the legal front, the weight can become overwhelming. And without the right support, founder burnout can lead to decisions that hurt the very business you're working so hard to build. In this episode, we’ll explore how these two factors interact and, ultimately, how you can avoid them to ensure your startup doesn’t become another statistic.

Legal Pitfalls: The Invisible Landmines

When you're building a startup, it's easy to get caught up in the excitement of growth, customer acquisition, and fundraising. However, failing to set up proper legal structures can leave your business vulnerable to serious risks. A lack of legal protection can lead to costly lawsuits, compliance issues, or intellectual property disputes that can drain your resources and time.

Common Legal Pitfalls to Avoid:

1. Unclear Business Structure
   Whether you're running a sole proprietorship, partnership, or corporation, choosing the right legal structure for your startup is crucial. The wrong choice can result in personal liability, higher taxes, or complications in raising funding.
2. Intellectual Property Oversights
   Failing to protect your ideas, products, or branding can expose your business to infringement lawsuits or loss of competitive advantage. Registering trademarks and patents early is key.
3. Weak Contracts
   Not having solid contracts in place with suppliers, partners, and employees can lead to misunderstandings and legal disputes. Whether it's unclear terms or missing clauses, weak contracts are a silent killer.
4. Regulatory Compliance
   Startups often overlook industry-specific regulations or fail to stay compliant with changing laws. Failing to adhere to tax laws, labor laws, or environmental regulations can lead to penalties, fines, and damage to your reputation.

The Impact of Legal Pitfalls on Founders: When legal issues arise, founders are forced to deal with complex challenges that divert their focus from scaling their business. This leads to stress, confusion, and ultimately burnout.

Founder Burnout: The Invisible Cost of Stress

Founder burnout is one of the most dangerous threats to a startup’s survival, yet it often goes unnoticed until it’s too late. The emotional and mental strain of leading a startup is immense, and when combined with the legal challenges mentioned above, it can overwhelm even the most resilient entrepreneurs.

How Burnout Creeps In:

1. The Weight of Responsibility
   As the face of your startup, you are responsible for its success or failure. The pressure to be constantly available, make critical decisions, and handle every challenge personally can be exhausting.
2. Emotional Fatigue
   Constantly battling for survival, handling stress, and facing uncertainty can lead to emotional exhaustion. Over time, this emotional toll can make it hard to stay motivated, focused, or inspired.
3. Physical Toll
   The long hours, sleepless nights, and constant stress can lead to physical symptoms like fatigue, headaches, and even more serious health issues. This impacts not only your personal well-being but your ability to lead the company effectively.

The Interconnection: Legal Stress + Founder Burnout
Legal challenges are a major stressor that can lead directly to burnout. When founders are forced to deal with lawsuits, compliance issues, or poorly structured business models, the emotional and mental strain can reach a breaking point. Over time, this makes it harder to focus on the bigger picture and move the business forward.

How Legal and Emotional Struggles Combine to Sink Startups

While legal mistakes and burnout may seem like separate issues, they often go hand in hand. A founder who is burned out may fail to recognize the importance of proper legal protections, or they may delay addressing legal issues, making them worse over time. Conversely, ongoing legal battles can add to the stress and create a toxic environment for the founders.

The Vicious Cycle:

• Legal troubles create stress, leading to emotional exhaustion.
• Emotional exhaustion impairs decision-making, resulting in further legal and business mistakes.
• Over time, this leads to a lack of motivation and focus, which affects the company’s performance, making survival less likely.

Avoiding Legal Pitfalls and Founder Burnout

To prevent these issues from sinking your startup, here are some practical steps you can take:

1. Set Up Proper Legal Frameworks Early
   • Choose the right business structure, register your IP, and draft strong contracts with legal counsel.
   • Stay on top of regulations that apply to your industry to avoid fines and penalties.
2. Delegate and Build a Strong Team
   • Don’t try to do everything yourself. Surround yourself with a team you trust to handle specific aspects of the business, including legal matters.
   • Bring in specialists who can help with legal tasks, financial management, and marketing to ease the burden on yourself.
3. Focus on Mental Health
   • Schedule regular breaks and make time for self-care. Burnout happens when founders feel like they’re constantly on the go without any relief.
   • Develop a support system—mentors, advisors, or a network of peers who can help guide you through tough times.
4. Recognize When to Seek Help
   • If legal challenges or burnout are becoming overwhelming, seek professional help. Lawyers, accountants, and mental health professionals can help you navigate these issues before they spiral out of control.

Conclusion: The Road to Startup Success—A Final Word for Entrepreneurs

As we wrap up this series on the top reasons why startups fail in their first year, one key theme emerges: building a successful startup is as much about resilience and adaptability as it is about innovation and strategy. Every founder’s journey is filled with challenges, and it’s not always the mistakes you make that determine your success but how you respond to them.

The First Year is Crucial
In the early stages of your business, you’re navigating uncharted waters. You may not have all the answers, and you may face obstacles that seem insurmountable. But as we’ve discussed, the most common pitfalls—whether it’s running out of cash, failing to adapt to market demands, poor leadership, or legal missteps—are not insurmountable if you tackle them head-on with the right mindset. The key is preparation and awareness. Take the time to build a strong foundation—financially, legally, and operationally—so that when the storms hit, your ship can stay afloat.

Founder Resilience is Key
It’s easy to underestimate the toll entrepreneurship can take on you personally. Founder burnout is real, and it's a major reason why startups falter. But it’s important to remember that you are the backbone of your company. Your well-being—mentally, physically, and emotionally—should never be neglected. Don’t be afraid to ask for help, whether it’s from a mentor, a partner, or even a therapist. Building a network of support is not just a luxury, it’s essential for long-term sustainability.

Build for the Long-Term
Every decision you make in your first year impacts the longevity of your business. Think beyond immediate goals and focus on building systems, processes, and relationships that will last. The choices you make about your team, your legal framework, and your product offerings should align with your vision for the future. This means sometimes sacrificing short-term gains for long-term growth. Don’t rush the process; building a business takes time, and success doesn’t happen overnight.

Learn from Every Failure
No one gets it right all the time, and failure is an inevitable part of entrepreneurship. But failure doesn’t mean the end of the road; it’s simply a lesson in disguise. Be willing to learn from your mistakes, adapt, and pivot when necessary. The most successful entrepreneurs are those who understand that failure isn’t the opposite of success; it’s a part of it.

Focus on the Bigger Picture
Finally, always keep your eye on the bigger picture. Start with purpose. Know why you’re doing this and who you’re doing it for. Your mission should be the driving force behind every decision you make. Whether it’s delivering a product that changes lives or building a company that reflects your values, remember that the road to success isn’t just about profits; it’s about making an impact.

As you step forward in your entrepreneurial journey, remember this: The first year is just the beginning. The challenges you face will shape you into a stronger leader, a more resilient founder, and a wiser entrepreneur. So stay focused, be patient, and never stop learning.

Your journey has just begun, and the best is yet to come.

Noha Gad

Successfully bidding on an IT project in Saudi Arabia requires more than just understanding the process; it demands strategic positioning to stand out in a competitive market. In our previous blog, we explored the key steps to prepare for a bid, including researching tenders, meeting regulatory requirements, and crafting a compelling proposal. However, winning a bid goes beyond compliance; it requires a well-planned approach to pricing, negotiation, and differentiation.

In this blog, we will dive into key strategies to maximize your chances of securing an IT project in Saudi Arabia. From offering competitive and sustainable pricing to navigating negotiations and avoiding common pitfalls, these insights will help you develop a winning edge in the Kingdom’s rapidly growing IT sector. 

How to craft a winning proposal?

A well-crafted proposal is essential for standing out in the competitive Saudi IT bidding landscape. It should not only meet technical and financial requirements but also align with the Kingdom’s Vision 2030 digital transformation goals. Below are the key components of a winning bid:

• Technical excellence: showcasing previous projects, case studies, and certifications.
• Financial competitiveness: structuring a cost-effective and profitable bid and understanding the weight of technical vs. financial scoring in evaluations.
• Local content and Saudization compliance.

Mastering Pricing Strategies

A well-balanced pricing strategy ensures that a bid is competitive, sustainable, and aligned with the project's financial expectations. Here are key considerations when developing a pricing strategy:

1. Balancing cost and value. You should analyze market benchmarks to ensure your pricing remains reasonable to avoid underpricing and overpricing. Underpricing can raise concerns about the project’s feasibility and quality, while overpriced bids are often eliminated early unless the company demonstrates significant added value.
2. Understanding government and private sector budgets. IT projects in Saudi Arabia vary based on the contracting entity, whether it is a government entity or a private one. Government projects usually follow strict budget allocations set by ministries or government agencies. Thus, your pricing must align with public sector regulations and transparency requirements. However, private sector projects have more flexible budgets but often focus on cost efficiency.
3. Structuring a profitable and competitive bid. Your bid must include a transparent cost breakdown, clearly outlining costs related to software development, licensing, hardware and infrastructure, maintenance, and training.

Navigating the negotiation process 

Winning an IT project bid is not just about submitting a strong proposal, it also requires strategic negotiation to finalize terms, secure the contract, and maximize profitability. 

Effective negotiation can differentiate a bidder from competitors by showcasing flexibility, value, and commitment to project success. To navigate this phase successfully, you have to:

• Effectively engage with key stakeholders by conducting thorough research, building relationships, and customizing value propositions.
• Adjust proposals post-bid submission. Even after submitting a bid, there is room for adjustments and refinements. Procurement teams may request modifications related to project scope, pricing, timelines, and compliance requirements.
• Leverage competitive advantages. Winning negotiations often depends on showcasing unique strengths such as a proven track record, innovation and technology leadership, customization and scalability, and after-sales support, and training.

Common mistakes to avoid

Even the strongest IT proposals can fail due to avoidable mistakes. Common pitfalls include a lack of compliance with Saudi regulations, unclear pricing structures, and overpromising deliverables without a clear execution plan.

Finally, you can be a strong contender in Saudi Arabia’s rapidly growing IT sector by crafting a compelling proposal, mastering pricing strategies, and avoiding common pitfalls. With the right preparation and a clear understanding of the bidding landscape, you can secure valuable contracts and contribute to the Kingdom’s digital transformation goals.

Kholoud Hussein 

Generative Artificial Intelligence (GenAI) is rapidly transforming industries worldwide, and Saudi Arabia is embracing this technological revolution with strategic vigor. Aligned with the Kingdom's Vision 2030 initiative to diversify its economy beyond oil dependence, GenAI is making significant inroads into various sectors, particularly within the private domain and the burgeoning startup ecosystem. This article explores the sectors most impacted by GenAI in Saudi Arabia, supported by recent data and insights from industry leaders, and discusses potential sectors poised for future transformation.

The Rise of GenAI in Saudi Arabia

Under the ambitious leadership of Crown Prince Mohammed bin Salman, Saudi Arabia is positioning itself as a global hub for artificial intelligence. The Kingdom's strategic initiatives, such as "Project Transcendence," aim to attract substantial investments from global tech companies to bolster domestic AI infrastructure, including data centers and startups. This aligns with the broader Vision 2030 plan to diversify the economy and reduce dependence on oil. 

The Public Investment Fund (PIF) has announced plans to launch a $40 billion fund to invest in AI, potentially partnering with venture capital firms like Andreessen Horowitz. This initiative underscores the Kingdom's commitment to establishing a robust AI ecosystem, fostering innovation, and attracting global tech leaders to its domestic market. 

Sectors Most Affected by GenAI

1. Technology Sector

The technology sector stands at the forefront of GenAI adoption in Saudi Arabia. According to research by Strategy& Middle East, the sector could see an increase in operating profit by up to SAR 15 billion by 2028 through the development and commercialization of new GenAI use cases and the growing demand for advanced hardware and infrastructure. Additionally, Saudi tech firms could streamline their research and development (R&D) capabilities, enhance solution design, and automate internal processes, potentially reducing costs by up to 30%. 

2. Media and Entertainment

The media and entertainment sector is poised to benefit significantly from GenAI. The same Strategy& report indicates that this sector could experience an increase in operating profit of up to SAR 6 billion by 2028. GenAI enables firms to develop more original Arabic content, personalize customer experiences, and improve operational capabilities. This advancement aligns with the Kingdom's national agenda to establish itself as a media and entertainment hub. 

3. Telecommunications

Telecommunications companies in Saudi Arabia are leveraging GenAI to enhance customer insights and infrastructure utilization. The adoption of GenAI could lead to an increase in operating profit of up to SAR 11 billion by 2028. By analyzing customer behavior, telecom operators can personalize campaigns and enhance cross-selling opportunities, particularly within the small and medium-sized enterprises (SME) market, projected to reach SAR 10 billion by 2028. 

4. Healthcare

The healthcare sector in Saudi Arabia is also experiencing the transformative effects of GenAI. Globally, AI is being utilized for predictive diagnostics, personalized treatment plans, and efficient patient management. In Saudi Arabia, integrating GenAI could enhance healthcare delivery, optimize resource allocation, and improve patient outcomes, aligning with the Kingdom's goals to modernize its healthcare infrastructure.

5. Finance and Banking

The finance and banking sector is transforming with the integration of GenAI. AI-driven algorithms are enhancing fraud detection, risk assessment, and customer service through chatbots and personalized financial advice. Saudi banks and financial institutions are investing in AI technologies to streamline operations, reduce costs, and offer innovative services to customers.

Impact on Startups and the Private Sector

The startup ecosystem in Saudi Arabia is rapidly evolving, with a significant focus on deep tech innovations. A report by the Ministry of Communications and Information Technology, in collaboration with King Abdullah University of Science and Technology, reveals that up to 50% of deep tech startups in the Kingdom are working on artificial intelligence and the Internet of Things (IoT). These startups have collectively secured more than $987 million in funding, reflecting a robust commitment to technological advancement.

The number of active startup investors in Saudi Arabia reached 104 in 2023, marking a 41% increase from 2018. Public funds heavily support this expansion, as the government is committed to nurturing tech startups and scale-ups. Furthermore, the number of researchers in the country has risen by 75% since 2015, with plans to expand the research infrastructure to accommodate 140,000 researchers by 2030, up from the current 20,000.

Insights from Saudi Officials and Business Leaders

Saudi officials and business leaders are vocal about the transformative potential of GenAI. Richard Attias, CEO of the Future Investment Initiative (FII) Institute, emphasizes the importance of AI in addressing global challenges and fostering inclusive investments. He highlights the role of AI in driving innovation and efficiency across various sectors, aligning with the Kingdom's vision for economic diversification. 

The Kingdom's strategic collaborations, such as the partnership between Aramco and Groq to build the world's largest AI inference data center, underscore the commitment to establishing a robust AI infrastructure. These initiatives are part of a broader strategy to position Saudi Arabia as a leader in AI investment, complementing the country's oil wealth and ensuring relevance in the post-oil era. 

Potential Sectors for Future GenAI Impact

Beyond the sectors currently experiencing significant GenAI integration, several other industries in Saudi Arabia are poised for transformation in the near future. As the Kingdom continues its AI-driven economic diversification, the following sectors are expected to see increasing disruption and opportunities for growth.

1. Automotive Industry

Saudi Arabia’s ambitious plans to establish a homegrown automotive industry, with initiatives such as Ceer Motors, will likely benefit from GenAI. Generative AI can revolutionize vehicle design, predictive maintenance, and supply chain optimization.

• Generative Design: AI can optimize vehicle components for strength, weight, and fuel efficiency, improving performance and reducing material waste.
• Smart Manufacturing: AI-powered automation in assembly lines can enhance precision and efficiency while lowering production costs.
• Autonomous Vehicles: As part of the Kingdom’s Vision 2030 Smart City initiatives (such as NEOM and The Line), GenAI will play a key role in self-driving technology, traffic management, and mobility solutions.

With the Saudi government investing billions into electric and autonomous vehicles, this sector is primed for AI-driven innovation.

2. Education and E-Learning

Saudi Arabia has been actively integrating AI into education, with a strong push toward personalized learning experiences and AI-powered content generation.

• Adaptive Learning Platforms: AI can tailor lessons to individual student needs, ensuring better retention and engagement.
• Automated Content Generation: GenAI tools can develop course materials, summarize lectures, and even generate interactive quizzes.
• AI-powered tutoring: Chatbots and AI tutors can provide 24/7 academic support to students across various disciplines.

With the Kingdom investing heavily in digital education platforms, GenAI could redefine the way students and professionals learn in Saudi Arabia.

3. Real Estate and Urban Development

The Saudi real estate sector is undergoing rapid expansion, driven by mega-projects like NEOM, Qiddiya, and the Red Sea Project. AI is expected to streamline construction planning, optimize resource allocation, and enhance property management.

• AI-Generated Architectural Designs: Generative AI can automate building designs, improving efficiency and reducing project timelines.
• Smart Cities: AI-driven traffic control, energy management, and security systems will play a crucial role in urban development.
• Property Valuation and Market Predictions: AI-powered analytics can provide accurate real estate forecasts, assisting investors and developers in making informed decisions.

As Saudi Arabia aims to create futuristic, AI-driven urban environments, GenAI will be integral to shaping the Kingdom’s real estate landscape.

4. Retail and E-Commerce

Saudi Arabia’s booming e-commerce market, projected to reach $20 billion by 2025, is already leveraging AI for customer experience enhancement and supply chain optimization.

• Hyper-Personalized Shopping: AI can analyze customer behavior and generate real-time personalized recommendations.
• AI-powered chatbots: Virtual assistants can handle customer inquiries, recommend products, and process transactions, improving efficiency.
• Inventory and Logistics Optimization: AI models can predict demand trends, automate restocking, and reduce waste, making supply chains more efficient.

With Saudi startups and enterprises investing heavily in AI-driven retail solutions, the sector is poised for even greater transformation in the near future.

5. Energy and Sustainability

As Saudi Arabia transitions toward renewable energy and sustainability goals, GenAI will play a pivotal role in optimizing energy management and reducing carbon footprints.

• AI-Optimized Power Grids: Machine learning algorithms can predict energy demand, allowing for efficient power distribution.
• Predictive Maintenance for Renewable Energy: AI can monitor and predict failures in solar farms, wind turbines, and smart grids, reducing downtime and maintenance costs.
• Sustainable Resource Allocation: AI-driven simulations can optimize water and energy usage across industrial and residential sectors.

Saudi Arabia’s commitment to green energy through projects like the $5 billion NEOM Green Hydrogen plant highlights GenAI's crucial role in the energy sector.

Finally, Generative AI is fundamentally reshaping industries across Saudi Arabia, accelerating economic diversification and boosting productivity. While sectors like technology, media, telecommunications, healthcare, and finance have already witnessed significant AI integration, emerging fields like automotive, education, real estate, retail, and energy are set to experience profound transformations.

With the Saudi government investing in AI research, local startups, and global partnerships, the Kingdom is on track to become a global AI hub. However, challenges remain in terms of regulation, talent development, and infrastructure, which must be addressed to fully capitalize on GenAI’s potential.

As Saudi Arabia continues its digital revolution, AI-powered industries will drive innovation, economic growth, and long-term sustainability, positioning the Kingdom as a leader in the global AI economy.

Kholoud Hussein 

In today's data-driven business landscape, the ability to transform raw data into actionable insights has become a cornerstone of success, particularly for startups aiming to navigate competitive markets. Data analytics services play a pivotal role in this transformation, enabling organizations to make informed decisions, optimize operations, and drive growth. In Saudi Arabia, a nation undergoing rapid economic diversification under Vision 2030, the integration of data analytics is proving instrumental in fostering innovation and entrepreneurship.

The Power of Data Analytics in Modern Business

Data analytics involves examining raw data to uncover patterns, correlations, and trends that inform strategic decision-making. By applying statistical and computational methods, organizations can interpret complex datasets, leading to a deeper understanding of business processes, customer behaviors, and market dynamics. This analytical approach not only enhances operational efficiency but also fosters innovation by identifying new opportunities and optimizing strategies. 

Data Analytics: A Catalyst for Startup Success

For startups, data analytics is not just a tool but a critical asset that can significantly influence their trajectory. Here's how data analytics services are transforming raw information into actionable insights:

1. Informed Decision-Making

Startups often operate with limited resources, making precise decision-making crucial. Data analytics provides empirical evidence that guides strategic choices, reducing reliance on intuition and increasing the likelihood of success. By analyzing market trends, customer feedback, and operational metrics, startups can make data-driven decisions that align with their business objectives. 

2. Enhancing Customer Experiences

Understanding customer behavior is vital for startups aiming to establish a loyal customer base. Data analytics enables the examination of customer interactions, preferences, and feedback, allowing startups to tailor their products or services to meet customer needs effectively. This personalization fosters customer satisfaction and loyalty, which are essential for long-term success.

3. Operational Efficiency

Identifying inefficiencies within operations can be challenging without proper analysis. Data analytics helps startups pinpoint areas where resources may be underutilized or processes can be streamlined, leading to cost reductions and improved productivity. For instance, analyzing supply chain data can reveal bottlenecks, enabling startups to implement solutions that ensure smoother operations. 

4. Risk Mitigation

Startups face various risks, from market volatility to operational challenges. Data analytics facilitates risk assessment by identifying potential issues before they escalate. By monitoring key performance indicators and market signals, startups can proactively address risks, ensuring business continuity and resilience. 

Data Analytics in Saudi Arabia's Startup Ecosystem

Saudi Arabia's commitment to fostering a robust startup ecosystem is evident through its investments in technology and innovation. The data analytics sector in the Kingdom is experiencing significant growth, driven by the expanding IT infrastructure and a heightened focus on evidence-based decision-making. Experts project that the sector will grow at a compound annual growth rate (CAGR) of 30.04% from 2024 to 2032, indicating a promising future for data-driven enterprises. 

Mozn, a Saudi-based startup, exemplifies the successful integration of data analytics in business operations. Specializing in artificial intelligence and data analytics, Mozn provides solutions that help organizations make informed decisions. By leveraging data analytics, Mozn enables businesses to enhance efficiency and drive growth, showcasing the transformative potential of data-driven strategies. 

Insights from Saudi Business Leaders

Saudi business owners recognize the value of data analytics in achieving business objectives. A prominent Saudi entrepreneur noted, "Incorporating data analytics into our operations has been a game-changer. It has allowed us to understand our customers better and streamline our processes, leading to increased efficiency and profitability."

Another business leader highlighted, "The insights gained from data analytics have been instrumental in guiding our strategic decisions. It has given us a competitive edge in the market, enabling us to anticipate trends and adapt accordingly."

Challenges and Considerations

While the benefits of data analytics are substantial, startups may encounter challenges in its implementation:

• Data Quality: Ensuring the accuracy and completeness of data is essential for reliable analysis.
• Resource Constraints: Implementing data analytics requires investment in technology and skilled personnel, which may be challenging for startups with limited resources.
• Data Privacy: Adhering to data protection regulations is crucial to maintain customer trust and avoid legal repercussions.

Addressing these challenges necessitates a strategic approach, including investing in quality data management systems, training staff, and establishing robust data governance policies.

To conclude, data analytics services are indispensable in transforming raw information into actionable insights, particularly for startups striving for success in competitive markets. In Saudi Arabia, the integration of data analytics aligns with the nation's Vision 2030 goals, fostering innovation and economic diversification. By leveraging data analytics, startups can make informed decisions, enhance customer experiences, optimize operations, and mitigate risks, thereby establishing a strong foundation for sustainable growth.

As we continue our exploration of the building blocks of startup success, our next discussion will delve into the role of educational platforms and skill-building initiatives in empowering entrepreneurs. We will examine how access to knowledge and continuous learning contribute to entrepreneurial success, particularly in the context of Saudi Arabia's evolving business landscape.

Ghada Ismail

A groundbreaking idea, strong financial backing, and an eager market may seem like the perfect formula for startup success. Yet beneath these promising elements lies a crucial factor that determines whether a startup thrives or fails: the people driving it.

Leadership and team dynamics are the unseen forces that shape every decision, process, and relationship within a company. Founders who build cohesive teams and embrace effective leadership practices create environments where innovation flourishes and employees remain motivated. Conversely, startups plagued by leadership conflicts, misaligned visions, or toxic work cultures risk collapse even when their products or services show great potential.

How Leadership and Team Issues Emerge

Problems often arise when founders struggle to define roles, align visions, or manage conflicts. Leadership inexperience can lead to poor decision-making, unclear communication, or a failure to set realistic goals. Similarly, weak team cohesion may result in internal friction, disengagement, or frequent turnover.

Research by CB Insights shows that 23% of startups fail due to team issues, including leadership conflicts and skill gaps. A startup with two co-founders, for example, may face tensions if one envisions aggressive growth while the other prefers a more conservative pace. Without alignment, this disconnect can ripple through the entire company, affecting strategic direction and morale.

A study by Harvard Business Review found that startups with clearly defined leadership roles and well-structured teams are 2.3 times more likely to scale successfully. Meanwhile, fragmented teams often suffer from duplicated efforts, miscommunication, and wasted resources, ultimately slowing growth.

Key Strategies to Build a Stronger Leadership and Team Foundation

1. Establish Clear Roles and Responsibilities: Define leadership roles early and ensure each leader understands their scope. This reduces overlap and confusion. Founders should align on decision-making authority and areas of accountability to minimize power struggles.
2. Prioritize Communication: Regular team check-ins, open dialogue, and transparent decision-making help prevent misunderstandings and keep teams aligned. Successful startups often implement structured communication routines such as weekly stand-ups, performance reviews, and team-wide updates to ensure alignment.
3. Invest in Leadership Development: Even experienced founders can benefit from mentorship, coaching, or management training to strengthen their leadership skills. Programs like Endeavor Saudi Arabia provide guidance to founders, helping them refine their leadership approach.
4. Build a Collaborative Culture: Encourage teamwork through shared goals, team-building activities, and a supportive environment where ideas are valued. Studies by the Institute for Corporate Productivity (i4cp) have shown that companies that actively promote collaboration are five times more likely to be high-performing.
5. Address Conflict Early: Tensions are inevitable, but unresolved disputes can fester. Creating a structured process for resolving conflicts ensures issues are managed before they escalate. Conflict resolution frameworks like the "Radical Candor" approach encourage open yet empathetic conversations to resolve friction productively.

The Radical Candor is a communication framework developed by Kim Scott, designed to help leaders give feedback that is both direct and caring. The concept encourages managers to challenge their team members while simultaneously showing they care about them personally. The framework is built on two key dimensions:

• Care Personally: Building strong relationships by genuinely caring about your colleagues as individuals.
• Challenge Directly: Offering clear, honest, and sometimes tough feedback that helps people improve.

The Power of Strong Leadership and Teamwork

Startups that cultivate clear leadership structures and foster a united team are far better equipped to handle the pressures of early-stage growth. Research by McKinsey & Company shows that companies with effective leadership teams are 1.9 times more likely to achieve above-average financial performance, emphasizing the value of well-managed teams.

In the unpredictable world of entrepreneurship, strong leadership, and cohesive teams are not just assets, they're essential for survival. Up next, we'll explore how ignoring customer feedback can silently sabotage even the most promising startups. Stay Tuned!

Kholoud Hussein 

Saudi Arabia’s giga-projects—Neom, The Line, and Qiddiya—are redefining the Kingdom’s economic landscape, aligning with Vision 2030’s goal of diversifying the economy and reducing reliance on oil. While these projects promise futuristic urban planning, cutting-edge technology, and world-class tourism, they also create unprecedented opportunities for startups and SMEs.

Saudi entrepreneurs are tapping into these mega-developments to provide innovative solutions in smart city infrastructure, entertainment, fintech, logistics, and sustainability. This article explores how these projects are fostering startup growth, the role of Saudi business leaders in seizing these opportunities, and the government’s efforts in empowering entrepreneurs.

1. Neom and The Line: A Smart City Ecosystem for Innovation

Neom is a $500 billion mega-city that is poised to become a global hub for technology, AI, and green energy. One of its most ambitious projects is The Line, a 170-kilometer-long, car-free smart city that integrates AI-driven automation, renewable energy, and futuristic urban mobility.

For startups, Neom represents a testing ground for innovation in AI, IoT, and sustainable infrastructure. Entrepreneurs in sectors such as autonomous transportation, AI-driven governance, and urban sustainability can leverage Neom’s open innovation framework to develop and scale their businesses.

Startup Perspective

Sultan Alasmi, CEO of Zid, an e-commerce enabler, highlights the immense potential of Neom for startups: "Saudi Arabia’s giga-projects, especially Neom, offer a once-in-a-lifetime opportunity for startups to develop solutions that integrate with smart city frameworks. Entrepreneurs who innovate in AI-driven commerce, logistics, and urban tech will be at the forefront of the new economy."

As Neom continues to attract global investment, Saudi startups specializing in green energy, sustainable construction, and AI-driven automation will be key players in its long-term development.

2. Qiddiya: A Billion-Dollar Playground for Tourism and Entertainment Startups

With a projected 17 million annual visitors by 2030, Qiddiya is Saudi Arabia’s answer to Dubai’s entertainment sector. Spanning 334 square kilometers, Qiddiya will feature theme parks, motorsports, esports, live performances, and cultural experiences.

Startups in hospitality, ticketing, VR-based entertainment, and travel tech stand to gain significantly from this multi-billion-dollar project. Saudi Arabia is positioning itself as a regional hub for entertainment, and entrepreneurs who capitalize on immersive experiences, AI-driven tourism services, and fintech solutions for travel will thrive.

Startup Perspective

Ebrahim Al-Jassim, founder of Ninja, a quick commerce startup, sees entertainment logistics and hyper-personalized services as a massive growth area: "Qiddiya is more than an entertainment hub; it’s a new ecosystem for hospitality, logistics, and smart payments. Startups that can enhance visitor experiences with AI, VR, and seamless payment solutions will dominate this space."

With Saudi Arabia investing over $8 billion in the entertainment sector, Qiddiya offers massive potential for travel tech startups, luxury tourism brands, and digital payment innovators.

3. Opportunities in Smart Cities, Tourism, and Infrastructure

Smart Cities & Infrastructure

Neom and The Line are pioneering AI-driven governance, hyper-connectivity, and zero-emission infrastructure. Startups that specialize in energy-efficient buildings, smart grid technologies, and AI-based security solutions can integrate their products into these developments. "Our startup, Retailo Technologies, is already working on logistics solutions that cater to the evolving needs of Saudi Arabia’s giga-projects. Supply chain innovations will be crucial in supporting large-scale developments like Neom and The Line," according to Abdulaziz Hadhrawi, Founder of Retailo Technologies. 

Tourism & Hospitality Tech

Saudi Arabia’s plan to attract 100 million tourists by 2030 means massive investments in luxury tourism, wellness retreats, and eco-tourism startups. Entrepreneurs in AI-driven personalized travel experiences, sustainable hospitality, and VR tourism can tap into this market.

Khaled Abou Kassem, Co-founder of AlGooru, said: "The Saudi tourism sector is experiencing rapid growth. Startups that integrate AI, blockchain-based booking systems, and immersive digital experiences will be ahead of the curve."
 

4. Government Policies Supporting Saudi Entrepreneurs

Investment Incentives

The Ministry of Investment of Saudi Arabia (MISA) provides a 100% foreign ownership license for startups setting up in SEZs (Special Economic Zones). This policy has led to a 65% increase in foreign startup investments in 2024.

Special Economic Zones (SEZs) Provide Tax-Free & Duty-Free Benefits: SEZs like King Abdullah Economic City (KAEC) and Neom's Industrial Zone are startup-friendly hubs that offer tax incentives, regulatory benefits, and easy business incorporation.

Venture Capital & Funding for Startups

Saudi Arabia has witnessed a record $3.8 billion in venture capital funding in 2024, with much of it directed towards startups in logistics, fintech, AI, and green energy. Mohammed Aldossary, Co-founder of Sary, stated: "Saudi Arabia’s startup scene is evolving rapidly, thanks to government-backed funding initiatives like Monsha’at and the Saudi Venture Capital Company (SVC). Access to capital is better than ever for ambitious entrepreneurs."
 

5. Overcoming Challenges: What Startups Need to Consider

While Saudi giga-projects present incredible opportunities, startups must navigate challenges such as:

•  Regulatory Compliance: Large-scale projects require businesses to meet international quality and sustainability standards.
• Talent Acquisition: The demand for AI specialists, sustainable engineers, and fintech experts is outpacing local supply.
• Competition from Global Corporations: Startups must differentiate their solutions to compete against established multinational firms.

Advice from Saudi Startup Leaders

Janardan Dalmia, CEO of Trukkin, said: "Startups must move fast, network aggressively, and seek partnerships with giga-project stakeholders. Neom and Qiddiya won’t wait for entrepreneurs who aren’t ready to scale."
 

In the same vein, Hala Zahran, Lead for Arab Bank Accelerator, commented: "Government-backed accelerators like the Saudi Industrial Development Fund (SIDF) and PIF’s investment arms are creating a world-class startup ecosystem. But to succeed, founders must be willing to adapt quickly to regulatory and business changes."
 

The Future of Saudi Startups in Giga-Projects

Saudi Arabia’s giga-projects are not just urban developments—they are catalysts for economic diversification and technological innovation. As Neom, The Line, and Qiddiya continue to take shape, startups and SMEs will play a pivotal role in shaping the future economy.

For entrepreneurs willing to innovate, collaborate, and scale, the Saudi startup ecosystem is ripe with opportunity. Whether in AI-driven smart cities, fintech for tourism, or green energy infrastructure, the future belongs to those who seize it now.

Noha Gad

A valuation is a fundamental metric that reflects the company’s current and future potential. It serves as a crucial tool for financial planning, strategic decision-making, and interactions with investors, employees, and other stakeholders.

Valuing a company goes beyond simple revenue figures and considers a range of financial, operational, and market-driven factors that determine how much a business is worth. Whether you are an entrepreneur, investor, or corporate executive, understanding these factors is crucial for making informed financial and strategic decisions.

For a company owner, valuation is a reflection of years of dedication, innovation, and strategic decisions. It is the tangible measure of their vision realized, a benchmark for future growth, and often, the key to unlocking the next phase of their entrepreneurial journey. Whether preparing for a funding round, considering a merger, or simply understanding the business' intrinsic worth, a clear grasp of valuation drivers is paramount.

For an investor, valuation is the cornerstone of due diligence and return on investment analysis. It is the lens through which they assess a company's potential, weigh its risks, and determine the viability of their capital commitment. Investors meticulously examine various metrics, from revenue projections to market share, to ascertain if a company's asking price aligns with its actual and future performance.

In this blog, we will break down the key factors shaping the company’s valuation, explaining how they impact business worth and why both company owners and investors need to pay close attention to them. 

Company valuation from an owner’s perspective

As a business owner, you need to understand your company's worth for reasons such as raising capital, selling the business, bringing in investors, or strategic planning. Owners often focus on methods that highlight the company’s financial health, growth potential, and intrinsic value.

Key Valuation Methods

• Earnings-based valuation. This encompasses the discounted cash flow (DCF) analysis, which determines value based on projected future cash flows, and the capitalization of earnings through which owners divide current earnings by a capitalization rate (rate of return expected by investors).
• Market-based valuation. It includes the comparable company analysis (CCA) which compares the business to similar companies in the industry based on valuation multiples.
• Asset-based valuation. This valuation is based on the net asset value (NAV) and liquidation value. NAV is suitable for asset-heavy businesses such as real estate or manufacturing, helping owners calculate total assets minus liabilities. Meanwhile, liquidation value determines the company’s worth if all assets are sold. It is often used for worst-case scenarios like bankruptcy.

To maximize valuation, owners should strategically emphasize their company's growth potential and distinct competitive advantages, while simultaneously maintaining strong financial records and reducing liabilities. Furthermore, if seeking investor capital, it is imperative to demonstrate clear scalability and a proven path to profitability, as these factors are paramount in attracting and securing favorable investment terms.

Company valuation from an investor’s perspective

Investors look at valuation differently as they focus on return on investment (ROI), risk, and growth potential. Their goal is to assess whether a company is undervalued, fairly valued, or overpriced before investing.

Key Valuation Methods

• Price-to-earning (P/E) ratio which compares the company’s stock price to its earnings per share (EPS). Investors use it to determine if a stock is overvalued or undervalued compared to competitors.
• Enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). This method measures overall business value, including debt, and is usually used to compare businesses across industries.
• Discounted cash flow (DCF) analysis. Investors use DCF to evaluate the future cash flow potential before making investment decisions.
• Dividend discount model (DDM). It values a company based on expected future dividends and discount rates.
•  Risk-based evaluation. Investors assess factors like industry trends, management efficiency, and market risks. They also evaluate a company’s competitive advantage, such as strong branding, customer loyalty, or cost leadership.

Finally, understanding the company’s valuation is essential for both business owners and investors. It helps owners attract funding, negotiate better deals, and plan for growth, while investors use it to assess risks and identify profitable opportunities. A well-informed valuation ensures smarter financial decisions and long-term success in a competitive market.

Ghada Ismail

Getting your pricing right is one of the toughest calls a founder has to make and it can make or break your business. Set the price too high, and you risk pushing customers away. Go too low, and you may struggle to cover costs or risk being seen as cheap. Finding that sweet spot is crucial, yet many startups stumble here.

The Danger of Overpricing

Overpricing can easily turn potential customers away. If people feel your product isn’t worth the price, they’ll look elsewhere. This is especially risky for startups trying to build a customer base. Higher prices can also raise expectations, and if your product or service doesn’t exceed those expectations, it can hurt your brand.

One common mistake is pricing based solely on costs without considering the customer's perception of value. Customers don’t just evaluate the price; they weigh it against what they believe they’re getting in return. Overpricing without adding value can leave your business looking out of touch. 

The Pitfalls of Underpricing

On the other side, pricing too low can backfire. While it might seem like a great way to win customers early on, underpricing can leave you with little margins or even losses. Worse still, customers might assume your product isn’t up to par. And once you've set those low prices, bumping them up later without upsetting loyal customers can be tricky.

Underpricing can also create a perception problem. Customers may wonder, "Why is this so cheap?" and assume it lacks quality or staying power. For instance, a bakery pricing its cakes below market rates may attract bargain hunters but struggle to establish itself as a premium dessert destination.

Finding the Sweet Spot

The key to good pricing is understanding your costs, knowing your market, and figuring out what customers are willing to pay. Many successful startups use a value-based pricing model, which ties your price to the perceived benefits your product offers. This strategy can help position your offering as worth the investment without scaring off price-conscious buyers.

Market research is crucial here. Founders should analyze competitors, survey potential customers, and study buying behaviors to gauge what their audience is willing to pay. Testing different price points or offering tiered options can also provide insights into what drives sales without scaring off leads. This means creating multiple pricing plans or packages that cater to different customer needs and budgets. For example, a SaaS startup might offer:

Basic Plan: A lower-cost option with essential features for entry-level users.

Standard Plan: A mid-tier package with additional features for growing businesses.

Premium Plan: A higher-priced option with advanced features, dedicated support, or exclusive perks.

This strategy allows customers to choose what best fits their needs, while giving your business opportunities to upsell as users grow or require more value. Tiered pricing is common in tech, subscription services, and even physical products with 'starter,' 'pro,' or 'deluxe' options.

Testing and Adapting

Pricing isn’t something you set and forget. Early-stage businesses should experiment with different pricing models, keep an eye on customer reactions, and adjust accordingly. Special offers, discounts, or premium tiers can help you figure out what resonates best with your audience.

Many successful startups approach pricing as an ongoing process. They gather customer feedback, analyze trends, and adjust their prices when necessary. Some introduce loyalty programs or bundle offers to increase perceived value without directly raising prices. By staying flexible and responsive, startups can adjust their pricing over time.

Wrapping things up…

Pricing mistakes are common, but they’re fixable. By staying tuned into customer feedback and making thoughtful adjustments, you can find a price point that reflects your product’s value and keeps your business sustainable. But even with great pricing, poor execution can derail everything. In the next episode, we'll dive into how operational chaos can drag startups down and what founders can do to keep things running smoothly.

Ghada Ismail

Kuwait's largest online classifieds platform, 4Sale, has become a household name in the region's digital marketplace landscape. Spearheading the platform's technological evolution is Khaled Gomaa, Chief Technology Officer at 4Sale. 
 

A seasoned tech leader with 16 years of experience across all stages of business growth, Khaled has a strong passion for creating products that drive business value. He founded his first company at 18 years old and has since contributed to various technology-driven projects, including social media, marketplaces, AdTech, LegalTech, chatcommerce, and e-commerce sectors.
 

Throughout his career, Khaled has worked with systems and platforms handling billions of requests, and startups searching for the optimum product-market fit; providing him with vast experience in developing solutions meeting corporate and customer goals.
 

In this exclusive interview, Khaled shares insights into the platform's journey, its most popular features, and how it has evolved to meet changing consumer expectations. He also discusses 4Sale's innovative use of emerging technologies like AI and machine learning, while offering valuable advice for aspiring tech entrepreneurs in the region.

1.    For those who might not be familiar, can you share the story behind 4Sale and what inspired its creation?

4Sale was founded by our CEO - Tarek Sakr – in 2014, following his memorable – but incredibly frustrating - consumer experience, many years ago, of attempting to purchase a second-hand car in Kuwait.

He found the experience so challenging and non-user-friendly that it sparked an entrepreneurial idea. He took a particular interest in subsequently researching the then-embryonic online car sales market – before launching his own website. This grew into what is now Kuwait’s largest online classifieds platform – a platform where people come together to buy and sell goods and services.

Since its inception, 4Sale has supported over 2 million registered users in listing 14 million items and services. Over 7 million devices have accessed the platform through app downloads or website registrations, driving 30 million page views each month.

Trading is a way of life in Kuwait, and creating an online, localized marketplace was a compelling opportunity. Tarek believed technology could capitalize on these cultural strengths and – with online classifieds - there are also virtually no restrictions on product categories to integrate into the business model.

We are committed to the power of personalization. By using cutting-edge technology, we customize our products to match each user’s unique preferences, creating a seamless and tailored shopping experience. Our mission is clear: to make it easy for individuals to find and access the products they love.

2.    What categories or features are currently the most popular on 4Sale, and why do you think they resonate so well with users?          

Consumer tastes often shift with the seasons and annual events. For example, during Ramadan, our platform sees a major surge in gift sales, amid increased demand for items such as Misbah. This year - we expect the same pattern. Among the top five gifts in Kuwait were watches, Misbah, pens, leather bags, and wallets—each symbolizing enduring elegance and practicality.

Given 4Sale’s heritage in automotive, it is a core part of our DNA and remains one of the most popular verticals on our platform. Last year, our dominance was further cemented via partnerships with car dealerships.

In addition to that, our Contracting vertical grew 7% in revenue year over year, demonstrating shows how we're driving more customers to our service providers, boosting their business and their confidence in our platform.

3.    How has the platform evolved to meet the changing expectations of users over the years?    

We know—by paying close attention to the data—that today’s customers desire (i) highly specific, tailored interactions, (ii) to be genuinely understood, and (iii) easy and seamless access to purchases. By refining our processes through data collection, we can offer timely, relevant recommendations that create a more personal and enjoyable customer experience.

In this context, people are using the platform as a price reference; it has become essential for knowing what is sold where.

This evolution has also allowed local businesses to gain increased visibility—whether offline or online—by highlighting their services and showrooms, including certified listings from trusted sources offered by 4Sale.

As our rapid growth continues, we will scale up our entire infrastructure in line with our 2025 goal of reaching two million monthly active users across additional verticals. This would represent an impressive market share in a country of just five million people—and our infrastructure will be ready for it.

4.    In your opinion, what makes classifieds and e-commerce platforms like 4Sale essential in today’s economy?
People will always trade, even if their methods change. As digitization has increased, we have led in technology. Today’s customers also want effortless experiences - be it buying or selling – and we simplify the buying and selling process for users. Our cutting-edge technology powers advanced algorithms so the process is as tailored and easy as possible.

5.    Are there any new products or features in the making to be launched soon?

We are continuously working on new features and are currently preparing some very exciting updates to enhance our primary verticals—automotive and real estate.  These updates will allow users to compare prices and know more about the availability of products, as we are committed to helping service providers gain more market visibility in Kuwait. Obviously, we can’t reveal too much right now - but stay tuned!

6.    How do you see emerging technologies like AI, blockchain, or Web3 shaping the future of marketplaces like 4Sale?

We already use GenAI to identify distinct user groups based on demographics, behavior, cultures, nationalities, and preferences, enabling tailored marketing campaigns for events and cultural festivals. This approach enhances the overall customer experience by considering their interests, pastimes, hobbies, and collections.

We are also enhancing our machine-learning-driven content moderation system. A key challenge we are tackling involves customers either (i) unintentionally providing incorrect ad details or (ii) misusing the ad modification feature. For example, when users edit their listings, they may significantly alter the content—at times, effectively creating an entirely new ad under the guise of an update.

To mitigate this, we are developing a model that evaluates ad modifications, determining whether changes are routine or substantial enough to require blocking. Additionally, the model helps filter inappropriate content across text, images, and other media, ensuring our platform maintains high-quality standards.

As you can see, the use cases of AI are very broad, and we are excited about these developments. They will enhance marketplaces, making them increasingly appealing to customers.

7.    What’s your vision for 4Sale’s future, within Kuwait?
We want to increase the number of verticals we operate in – having now expanded to 197 categories. We will continue to drive innovation - elevating our technology to maintain (and enhance) our status as the leading classifieds service in Kuwait.
As a highly trusted brand that is integrated into users’ everyday behavior, we also want to get closer to transactions and offer even more value-added services during those transactions.  This includes a strong focus on business sustainability for our service providers, helping them get more customers and visibility.
If we can keep doing all these things, as we have been doing, then the future will be very exciting.

8.    Is there anything you’d like to share with aspiring tech entrepreneurs or those looking to create similar platforms in the region?  

I'd start by saying that instead of building from scratch, focus on optimizing and improving what already exists to accelerate development, control costs, and enhance reliability. This approach is crucial for capitalizing on the incredible pace of technological advancements in our region, which has enormous growth potential that can benefit from these developments. This situation is both a privilege and a responsibility. Entrepreneurs need to be hardworking, thoughtful, and creative to capitalize on these trends. Hard work pays off—just be patient and keep going.