Neobanks Unleashed: Transforming the Way Saudis Manage Money

Oct 10, 2024

Ghada Ismail

 

Imagine managing your finances entirely from your smartphone, with instant access to banking services at your fingertips. This is the promise of neobanking, a fresh wave of digital-only banks that are reshaping the traditional banking experience. In a world increasingly driven by technology, neobanks leverage cutting-edge innovations to offer streamlined services that prioritize convenience and accessibility.

 

 As Saudi Arabia embraces its Vision 2030 initiative, the Kingdom is witnessing a financial metamorphosis, with neobanks emerging as key players in this digital revolution. By blending technology with finance, these banks are not just changing how people bank—they are redefining what banking means in a rapidly evolving landscape.

 

While many people can easily mix up between neobanks and digital banks, there’s actually a difference between the two things. Neobanks operate entirely online without physical branches, focusing on mobile-first experiences and innovative features, while digital banks may offer online services but can also have physical branches.

 

Neobanking refers to the emergence of digital-only banks that operate without traditional physical branches. These banks leverage technology to offer a wide range of financial services, including account management, payments, lending, and investment options, all through mobile apps or websites. Unlike conventional banks, neobanks focus on providing streamlined, user-friendly experiences, often with lower fees and enhanced accessibility. They cater to tech-savvy consumers who prefer managing their finances online, reflecting a broader shift towards digitalization in the financial sector.

 

The Rise of Neobanking in Saudi Arabia

 

In recent years, Saudi Arabia has witnessed a significant shift in its banking landscape, driven by rapid technological advancements and a growing preference for digital financial solutions. The government’s Vision 2030 initiative aims to diversify the economy and foster innovation, creating a favorable environment for neobanks to flourish. As part of this vision, the Saudi Arabian Monetary Authority (SAMA) has introduced regulatory frameworks to support the establishment of digital banks, encouraging competition and enhancing consumer choice.

 

Key Players in the neobanking & digital banking space

 

Several neobanks and digital banks have emerged in Saudi Arabia since then, aiming to disrupt traditional banking models. Notable players include:

 

STC Pay: Originally a digital wallet, STC Pay has evolved into a comprehensive digital banking platform, offering users a range of services such as money transfers, payments, and investment options.

 

Alinma Bank: While primarily a traditional bank, Alinma has launched a digital-only platform to cater to tech-savvy customers, providing services that are quick, convenient, and accessible.

 

Saudi Digital Bank: This new entrant focuses solely on digital banking services, emphasizing user-friendly interfaces and innovative features tailored to the needs of a younger demographic.

 

Riyad Bank's Digital Services: Riyad Bank offers a range of digital banking services that cater to modern banking needs, enhancing customer experience. The bank targets a diverse customer base looking for a blend of traditional and modern banking services.

 

Benefits of Neobanking

 

Neobanks in Saudi Arabia are gaining traction for several reasons:

 

  • Cost Efficiency: With lower operational costs than traditional banks, neobanks can offer competitive pricing, including lower fees and higher interest rates on deposits.
  • Accessibility: Neobanks provide services that are easily accessible via smartphones, enabling users to manage their finances anytime, anywhere.
  • Innovative Features: Many neobanks incorporate advanced technologies such as AI and data analytics to provide personalized financial insights, budgeting tools, and smart spending alerts.

 

Challenges Ahead

 

Despite the promising growth of neobanking in Saudi Arabia, several challenges remain. Regulatory compliance is a significant hurdle, as neobanks must navigate evolving regulations set by SAMA. Additionally, establishing trust among consumers accustomed to traditional banking methods is crucial. Building brand recognition and demonstrating reliability will be key factors in attracting a loyal customer base.

 

The Future of Neobanking in Saudi Arabia

 

The future of neobanking in Saudi Arabia looks promising, with continued investment in technology and innovation. As the country’s young population embraces digital solutions, neobanks are well-positioned to capitalize on this trend. Collaboration between neobanks and fintech companies can also drive further innovation, creating a dynamic ecosystem that enhances financial services.

 

As Saudi Arabia stands on the brink of a financial transformation, neobanks are not just a passing trend but a key force in shaping the future of banking in the Kingdom. With their focus on technology, user experience, and innovation, these digital-only institutions are meeting the demands of a modern, tech-savvy population. 

 

By fostering competition and enhancing consumer choice, neobanks are paving the way for a more inclusive financial ecosystem. As the landscape continues to evolve, embracing these changes will be essential for both consumers and traditional banks alike. The journey towards a fully digital banking experience is just beginning, and Saudi Arabia is poised to lead the charge into this exciting new era.

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Your voice, your wallet: The power of voice in seamless financial transactions

Noha Gad 

 

The e-payments have become the backbone of modern commerce as they enable everything from online shopping and bill payments to peer-to-peer money transfers and business-to-business transactions. The adoption of e-payments has surged in recent years thanks to their convenience, speed, and security features, such as tokenization and biometric authentication. Both businesses and consumers benefit from the ability to make instant or near-instant payments anytime and anywhere with minimal friction, setting the foundation for a cashless economy. 

Voice payments emerged as one of the latest innovations in the broader e-payments ecosystem. They allow users to perform financial transactions simply by speaking commands to voice-enabled devices like smartphones, smart speakers, or virtual assistants such as Amazon Alexa, Google Assistant, and Apple Siri. 

Voice payments leverage artificial intelligence (AI), natural language processing (NLP), and voice recognition to interpret spoken instructions, authenticate users, and process payments seamlessly without the need for physical interaction with devices. By saying commands, users can enjoy a faster, more convenient, and hands-free transaction experience.

This type of payment integrates with payment gateways and banks behind the scenes to complete these transactions securely, often using voice biometrics and multi-factor authentication to ensure safety.

 

How do voice payments work?

To conduct financial transactions via voice, users must follow few steps:

       *Activation: users activate their voice assistant by saying a wake word or opening a voice payment app and tapping the microphone button.  

       *Instruction: the user clearly states their payment command, specifying the action, the recipient, and the amount to be paid or transferred.

       *Voice recognition and processing: The voice assistant captures the spoken command and converts it into text using voice recognition technology. NLP algorithms then interpret the intent and details of the transaction.

       *Authorization: The assistant securely communicates with the user’s linked financial accounts to authorize the transaction. 

       *Authentication: Security steps, such as voice biometrics, passcodes, or multi-factor authentication, may be required.

       *Transaction processing: Once authorized, the payment instructions are transmitted to the payment service provider, which verifies the details and transfers the funds between accounts.

       *Confirmation: The user receives confirmation via voice feedback or on-screen notification.

 

Although voice payments offer great convenience and innovation in the digital payment space, they also come with several significant challenges and concerns that must be addressed for widespread adoption and trust. This includes:

       *Security risks. The risk of unauthorized transactions grows, as voice commands can be accidentally or maliciously triggered on voice-enabled devices.

       *Privacy. Voice payment systems collect sensitive data, including voice recordings and biometric profiles. Thus, protecting user privacy through secure storage, encryption, and adherence to data protection regulations is critical.

       *Accuracy. Voice recognition still faces challenges regarding accuracy, especially in noisy environments or with diverse linguistic accents and speech patterns.

       *Integration and standardization. The lack of universal standards makes it difficult to integrate voice payments across different devices and platforms. 

 

Future outlook

The future of voice payments is promising, driven by the rapid growth and transformative innovations that are expected to reshape the way consumers and businesses make financial transactions.  The voice payments market is expected to grow significantly, driven by key trends, including advanced biometric authentication, AI-powered personalization, and the integration of blockchain technology.

With the rising popularity of voice assistants and smart devices, along with consumers’ increasing comfort with voice commands, voice payments are expected to become an integral part of daily financial activities. This shift reflects a broader trend toward more natural, seamless, and user-friendly interactions in digital commerce. 

As voice payment technology matures, it will offer unprecedented convenience, enabling users to conduct transactions with simple spoken commands anytime and anywhere. Businesses and financial institutions are poised to leverage these technologies to streamline payment processes, reduce friction, and engage consumers more effectively.

Finally, voice payments are set to become a mainstream, trusted method of payment, fundamentally changing the way society conducts financial exchanges in the upcoming years.

AI-First Startups: The New Blueprint for Innovation

Kholoud Hussein 

 

In the evolving landscape of global entrepreneurship, a new breed of companies is taking center stage: AI-first startups. Unlike traditional businesses that adopt artificial intelligence as an enhancement or add-on, AI-first startups are built on the premise that artificial intelligence is not just a tool but the very foundation of their business models. These startups are not simply using AI to optimize; they are reimagining entire industries by placing algorithms, data, and machine learning at the core of their value proposition.

 

What Makes a Startup “AI-First”?

The distinction between AI-enabled and AI-first is subtle yet transformative. An AI-enabled company might apply machine learning to streamline existing processes, such as automating customer service or improving logistics. An AI-first company, however, is designed with AI as its primary engine of value creation. Its products and services would not exist without AI capabilities—whether it’s predictive healthcare platforms that detect diseases before symptoms emerge, or financial tools that automate lending decisions in real time.

 

This orientation requires more than just technology adoption; it demands a mindset shift. Founders of AI-first startups begin by asking, “What problem can AI solve that humans alone cannot?” From there, the business model, operational structure, and customer interactions are built around the unique strengths of artificial intelligence.

 

The Competitive Edge of AI-First Models

Placing AI at the center offers several advantages. First, AI-first startups benefit from exponential scalability. Algorithms learn, improve, and adapt at a speed no human team can match, making it possible to handle vast data volumes and complex decisions with minimal incremental costs.

 

Second, these companies often create high barriers to entry. Proprietary data sets, refined models, and constant feedback loops mean that competitors without the same AI infrastructure face difficulty catching up. Consider the healthcare AI startup that trains on millions of patient records; its predictive accuracy becomes more robust over time, creating defensible value.

 

Third, AI-first startups are positioned to unlock entirely new markets. In sectors like education, AI tutors can scale personalized learning experiences to millions of students simultaneously. In agriculture, machine-learning models enable precision farming that boosts yields while conserving resources. In finance, algorithm-driven startups are redefining credit scoring, wealth management, and fraud detection.

 

Challenges on the AI-First Journey

Yet the AI-first path is far from frictionless. Building such companies demands heavy upfront investment in data infrastructure, talent, and computational resources. Unlike conventional startups that can bootstrap with minimal technology, AI-first ventures often require specialized machine learning engineers and access to high-quality datasets—both of which are scarce and costly.

 

Moreover, questions around trust and transparency loom large. Customers, regulators, and investors increasingly demand explainable AI. Startups that fail to demonstrate ethical standards risk reputational damage and regulatory pushback. Data privacy and security are also paramount, as breaches or misuse can dismantle consumer confidence overnight.

 

Another challenge lies in the talent war. Skilled AI professionals are among the most sought-after globally, and early-stage companies must compete with tech giants that can offer far greater compensation. Startups that succeed often do so by creating mission-driven cultures that attract talent motivated by the impact they can make, rather than salary alone.

 

Why Investors Are Paying Attention

Despite challenges, investors are flocking to AI-first startups. The global surge of funding into generative AI is a testament to the belief that these companies will shape the next decade of innovation. For venture capitalists, the appeal lies in the asymmetry of outcomes: the potential to back companies that can dominate entirely new categories.

 

A McKinsey report estimates that AI could contribute up to $4.4 trillion annually to the global economy. Startups that position themselves at the frontier of this transformation stand not only to capture market share but also to dictate the rules of new industries.

 

The Future Belongs to the AI-First

As industries across the world digitize, the difference between surviving and thriving may come down to how deeply companies embed artificial intelligence into their DNA. AI-first startups are not waiting for incumbents to lead the way; they are rewriting the script entirely.

 

For founders, this represents both an opportunity and a responsibility: to leverage AI in ways that solve real-world problems, create equitable growth, and maintain trust. For investors and policymakers, the rise of AI-first startups signals a paradigm shift—one where the most valuable companies of the future may not just use AI but will exist because of it.

 

Salasa.. A Saudi fulfillment platform revolutionizing e-commerce and logistics in GCC

Noha Gad

 

In the heart of the Middle East, Saudi Arabia is positioning itself as a global logistics hub, supported by strong government backing, extensive infrastructure development, and ongoing reforms in laws and regulations. The National Industrial Development and Logistics Program (NIDLP) aims to enhance the performance of logistics hubs and improve local, regional, and international connectivity across trade and transport networks, leveraging the Kingdom’s strategic location as the crossroad of three continents.

Tech-powered platforms like Salasa are revolutionizing traditional logistics by integrating advanced digital tools with deep market expertise, redefining speed, transparency, and operational efficiency.

As one of the leading e-commerce fulfillment platforms in Saudi Arabia, Salasa connects businesses to a sophisticated fulfillment network, turning complex logistics into seamless customer experiences.

 

To explore this transformation, Sharikat Mubasher interviewed Salasa’s founders, Hasan Alhazmi and Abdulmajeed Alyemni, to learn more about the platform’s business model, innovative offerings, and its role in transforming the logistics industry in Saudi Arabia.

Alhazmi, who also serves as Salasa’s CBO, shared insights into the platform’s evolution from a 3PL delivery provider to the logistics partner of choice for over 1,000 merchants, having fulfilled and shipped more than 50 million products domestically and internationally since inception.

 

First, what motivated you to establish Salasa? And what are the key logistics challenges that the platform addresses? 

Salasa began as a simple 3PL company delivering e-commerce orders by car and motorcycle. When one of our clients faced challenges with picking and packing, we stepped in to handle it. That light bulb moment revealed a clear opportunity: fulfillment could be offered as a dedicated service. My partner and I left our jobs at the time to build that model from the ground up.

From those first few shipments, we have grown into a network that has fulfilled over 50 million products, built on the belief that merchants should be able to scale without being weighed down by operational complexity. Today, our high-speed dark stores and mega fulfillment centers solve the exact pain points we saw in those early days: slow delivery times, fragmented courier options, and the cost burden of running in-house logistics. We combine that infrastructure with smart technology to give merchants what they need most: speed, reliability, and the ability to grow without limits.

 

How did Salasa enhance its products and services to transform the e-commerce logistics industry in Saudi Arabia? 

We are focused on building an infrastructure and technology ecosystem that work seamlessly together. 

On the physical side, we expanded to 15 dark stores and three mega fulfillment centers, ensuring we can reach the majority of customers in Saudi Arabia within hours, not days. 

On the technology side, we are rolling out solutions that automate courier selection, further optimize delivery routes, detect upcoming merchant campaigns, and predict inventory needs based on demand trends.

These tools will give merchants more control and visibility. No more guesswork. Merchants can track their orders in real time, anticipate stock needs, and respond to demand spikes with confidence. Over time, this combination of speed, transparency, and flexibility will raise the bar for what merchants expect from a logistics partner in the region.

 

How does Salasa uphold exceptional customer experience and operational excellence as it scales? 

Operational excellence at Salasa is embedded in every process we design. Our systems are built to minimize errors, cut delivery times, and ensure clear communication at every stage, with tools like voice AI proactively confirming pickups and deliveries for seamless coordination. 

As we scale, we avoid the common drop in service quality by investing heavily in technology and monitoring, staying close to the market, and listening to our customers. By identifying gaps, addressing bottlenecks, and acting quickly on feedback, we maintain the reliability merchants depend on and the on-time delivery customers expect, every single time.

 

For his part, Co-founder and CEO Alyemni shared more about the company’s growth strategy and his thoughts about the future of the logistics and e-commerce landscape in Saudi Arabia and the wider region. 

 

You successfully raised a $30 million Series B round. What motivated investors to invest in Salasa? And how will this fresh capital support your expansion plans?

Investors were drawn to Salasa because we have proven the model at scale. Salasa is not a gamble; it is a winning bet. We have built one of the fastest fulfillment networks in the region, backed by a proprietary tech stack that is actively redefining how e-commerce logistics operates. We have shown consistent growth, high merchant retention, and an ability to expand without compromising service quality.

 

This new capital allows us to move faster on three fronts:

*Infrastructure – expanding our network to handle higher volumes and cover more geographies.

*Technology – accelerating the development of our tech stack, from smart courier routing to predictive inventory positioning and automated merchant workflows.

*Talent – bringing in specialized expertise to strengthen our capabilities in operations, technology, and market expansion.

 

The goal is simple: to scale without losing the precision and quality that define Salasa today.

 

What are the new markets or segments that Salasa targets as part of its growth strategy? 

We are pursuing growth in three main ways: 

 

First, by deepening our presence in Saudi Arabia, reaching merchants in every major city, and scaling infrastructure to handle growing order volumes.

 

Second, by expanding into select GCC markets where there is clear demand for tech-enabled fulfillment.

 

Third, by enabling cross-border trade (inbound and outbound), which allows local sellers to seamlessly reach customers in new international markets, while also enabling global brands to enter Saudi Arabia with faster, more cost-effective delivery.

 

Beyond geography, we are also broadening our service offering, monetizing our proprietary Order Management System (OMS), and introducing adjacent solutions like omni-channel inventory management, AI-powered product content optimization, and campaign recommendations. These expansions position Salasa to serve merchants end-to-end, whether their customers are across the city or across borders.

 

How do you see the logistics and e-commerce fulfillment landscape in Saudi Arabia and the broader GCC region? 

Logistics in the region is moving away from fragmented, courier-led models to integrated fulfillment. Strong economic growth and major infrastructure investments are accelerating that shift. With E-commerce trade surging, Saudi Arabia alone sees over 250 million shipments a year, and higher incomes and connectivity will push that number higher.

Merchants are also changing how they operate, focusing on building their brands and products, while leaving logistics to specialized, tech-driven partners like Salasa. This shift is raising the bar for speed, reliability, and visibility, turning logistics from a challenge into a competitive advantage.

 

In your opinion, what are the key trends and innovations that shape the Saudi logistics sector? And how can cloud-powered and data-driven technology transform this promising sector? 

There are three major trends shaping the sector right now. First is the rise of instant delivery. Same-day and even two-hour windows are becoming more common in urban centers. Second is the growth of cross-border e-commerce, which brings both opportunities and operational complexity. Third is the deeper integration of AI and automation into every logistics function.

Cloud-powered and data-driven systems are the enablers here. They let us unify operations that were once fragmented, including warehousing, courier management, and inventory positioning, and run them as a single, intelligent network. When you layer in AI, you can anticipate demand, route orders in the most cost- and time-efficient way, and even optimize how merchants present their products online. This is how logistics moves from being a cost center to being a driver of growth.

Global Founders, Saudi Future: Inside the Rise of International Startups in the Kingdom

Kholoud Hussein 

 

Saudi Arabia’s startup magnetism is no longer a hypothesis; it’s measurable. In the first half of 2025, Saudi Arabia outperformed the wider MENA venture market, with startup funding up 116% year-on-year and deal activity matching that of the UAE for the first time, according to MAGNiTT’s H1 report. The financing tide is mirrored by regulatory throughput: the Ministry of Investment (MISA) issued 14,321 investment licenses in 2024—up nearly 68% year-on-year—signaling that more companies (including early-stage entrants) are choosing to plant a flag in the Kingdom. 

 

Perhaps the clearest indicator for founders themselves is the “Entrepreneur License”—a dedicated path for foreign startups. By mid-2025, 550 foreign startups had been licensed under this regime, a 118% jump versus mid-2024, per Monsha’at. That momentum sits alongside other founder-friendly gateways—from 100% foreign ownership in many sectors to the introduction of a Startup Visa category in 2025—lowering the friction of entry and signaling policy continuity. 

 

Capital as a calling card

Capital formation is a necessary condition for cross-border startup expansion, and Saudi has been deliberate in putting capital on the table. At LEAP 2025, authorities announced $14.9 billion in AI and digital deals and commitments, an umbrella under which global and regional startups can commercialize at speed. One emblematic example: U.S. AI-chip startup Groq secured a $1.5 billion commitment tied to expanding AI inference infrastructure in the Kingdom and scaling delivery from a new Dammam data center. “It’s an honor for Groq to be supporting the Kingdom’s 2030 vision,” CEO Jonathan Ross said of the partnership. 

 

Saudi Arabia’s broader risk capital picture is improving as well. Across MENA in H1 2025, startups raised about $2.1 billion through 334 deals—a 134% year-on-year rise—with Saudi Arabia leading the region’s funding totals, even when excluding debt. On the private-equity side, the Kingdom captured 45% of MENA’s H1 2025 PE transactions, pointing to late-stage depth that reduces exit anxiety for international founders considering relocation or market entry. 

 

Policy that travels well

For foreign founders, regulatory clarity matters as much as capital. Saudi’s investment regime has shifted from “if” to “how”—codifying 100% foreign ownership in many activities and streamlining licensing under MISA’s ISIC-based framework. The results show up in the pipeline: MISA’s quarterly updates highlight a brisk cadence of new permits; in Q4 2024 alone, 4,615 licenses were issued, nearly 60% more than the same quarter a year earlier. 

 

Two adjacent policy levers also matter for founders: premium residency and regional headquarters (RHQ). Applications for Saudi’s premium residency surpassed 40,000 between early 2024 and mid-2025, broadening the talent funnel for executives and technical leaders that foreign startups need to recruit locally. Meanwhile, the RHQ program continues to pull decision-making centers into Riyadh, with 34 additional RHQ licenses granted in Q2 2025—building a critical mass of buyers, partners, and procurement teams inside the Kingdom. 

 

Wide open sector doors

  • AI and data infrastructure. The Groq transaction is not an outlier; it’s a signal. The Kingdom has positioned itself as an AI build-site—from hyperscale data centers to model development capacity—backed by new national champions like HUMAIN and a dense pipeline of digital infrastructure. For international AI startups, the implication is straightforward: Saudi is willing to co-invest in critical plumbing if the commercial payoff is local.

 

  • Industrial and advanced manufacturing. Beyond software, Saudi Arabia keeps issuing industrial permits at a pace—1,346 in 2024 alone, with SR50 billion ($13.3 billion) in fresh investment—creating a market for foreign startups that sell enabling tech (vision systems, robotics, supply-chain AI, maintenance analytics) to local manufacturers. 

 

  • Proptech and urban services. A wave of foreign proptechs is eyeing Saudi Arabia’s fast-digitizing real-estate market. UAE-born Huspy, for instance, has publicly prioritized Saudi in its expansion roadmap, citing regulatory modernization and demand for transaction-speed tools for brokers and agents. “Saudi Arabia is undergoing a major transformation in real estate… Our goal is to partner with local professionals and give them tools that help them close deals faster,” CEO Jad Antoun said, noting the company’s near-term entry plans into Riyadh. 
  • Tourism and consumer platforms. With regions like Aseer receiving focused development to diversify beyond the megacity narrative, B2C and B2B2C startups in traveltech, creator-led commerce, and experience marketplaces can find “white space” beyond Tier-1 cities—valuable for foreign firms seeking first-mover brand equity. 

What foreign founders say

The confidence narrative is not just macro headlines; it’s founder-level calculus. Groq’s Ross frames Saudi as a co-builder in the AI stack, not merely a customer, emphasizing alignment with Vision 2030’s production goals rather than transactional procurement. Huspy’s Antoun points to a practical wedge: digitizing an industry that still has offline bottlenecks, using a partnership model with local professionals to localize workflows rather than impose a foreign UX. Venture investors echo this pull; as one regional funder told AGBI, Saudi Arabia is “one of the few countries in the world where you can actually see the growth,” with VC deals on track to cross $1 billion and potentially scale tenfold by 2030.

 

Friction points that matter

No market is turnkey, and international founders should assess Saudi Arabia’s specifics with the same rigor they would apply to the U.S., India, or the EU.

  • Regulatory sequencing: While entry has eased, startups still need the right license stack (commercial registration, sectoral approvals, and—where applicable—sandbox permissions) and must align their activity with MISA’s ISIC classifications. This is navigable, but it requires a sequencing plan and local counsel. 
  • Localization beyond language: Winning tends to hinge on product-market fit, not translation alone. Antoun’s comments on local agent workflows in Saudi real estate illustrate the point: foreign startups that embed local process logic (payment rails, KYC norms, fulfillment SLAs) grow faster and face less churn. 
  • Talent immigration and leadership depth: New visa channels—including the Startup Visa and premium residency—reduce friction, but founders should still time senior hires around licensing milestones and RHQ decisions to avoid costly lag between strategy and presence. 
  • Enterprise sales cycles: In sectors where government or large enterprises are anchor customers (such as health, education, utilities, and petrochemicals), procurement is structured, security review-heavy, and relationship-intensive. The upside is that once inside, retention can be exceptional; the downside is that proof-of-value must be unambiguous. LEAP’s deal flow shows that the door is open, but readiness is on the founder. 

The geography of opportunity

Saudi’s market is not one city: it is a set of distinct demand nodes—Riyadh for headquarters and B2B sales; Eastern Province for energy, data centers, and industrial tech; Jeddah for logistics and commerce; and fast-developing regions like Aseer for tourism, environmental tech, and outdoor economy platforms. The Dammam data center build tied to Groq underscores why East Coast proximity can be strategic for AI infrastructure and industrial IoT startups. 

 

RHQ policy compounds this geography. As more multinationals and unicorns set up regional headquarters in Riyadh, foreign startups get closer to procurement teams that control multi-country budgets—meaning a Saudi entry can be a GCC springboard, not a single-market detour. 

 

Signals in the numbers

The velocity of new company formation and licensing is widening the aperture for cross-border startups:

  • Licenses: 14,321 total investment licenses in 2024; +67.7% YoY. 
  • Foreign startup licenses: 550 by mid-2025; +118% YoY. 
  • Industrial base: 1,346 industrial licenses in 2024; SR50B new investment; >44,000 expected new jobs. 
  • Venture flow: Saudi H1 2025 startup funding +116% YoY; deal count at record H1 levels. 
  • AI anchor deals: $14.9B in AI/digital commitments announced at LEAP 2025; Groq’s $1.5B Saudi commitment. 

These are not vanity metrics; they translate into contract velocity, partner density, and hiring pipelines that a seed-to-Series-B founder can actually use.

 

How foreign startups are entering

1) Direct incorporation with Entrepreneur License: Best for startups with product clarity and near-term revenue paths. It allows 100% ownership and straightforward compliance if your activity fits the ISIC mapping. 

2) JV or distribution through sector leaders: In sales-heavy verticals (fintech infrastructure, insuretech, defense-grade cyber, industrial AI), foreign startups often partner with a local incumbent to pass procurement gates faster while building their own entity for future scale.

3) RHQ plus operating subsidiary: For scaleups serving GCC-wide customers, anchoring leadership in Riyadh while operating tech teams in multiple cities can shorten enterprise sales cycles and centralize government engagement. The rising number of RHQ licenses signals this pattern is gaining steam.

 

The founder’s checklist

  • Proof of local value: Be explicit about what you enable: faster approvals for banks, lower downtime in factories, shorter closing cycles for agents. Saudi customers buy outcomes, not roadmaps. (Huspy’s focus on broker productivity is illustrative.) 
  • Compliance by design: Build KSA-specific workflows into the product (Arabic interfaces, e-invoicing, ZATCA rules, data residency where needed) rather than layering them as post-sale custom work.
  • Talent stack: Budget early for a bilingual customer success lead and a regulatory ops specialist; they will pay for themselves by compressing the time from POC to MSA. Startup and premium residency visas expand this hiring universe. 
  • Capital partnerships: Treat local funds and corporate venture arms as design partners, not just check-writers. The Groq-Aramco Digital alignment shows how strategic capital can unlock infrastructure and demand simultaneously.  

What success looks like

A sustainable Saudi play for a foreign startup usually has four features: 

(1) local problem definition (not copy-pasted from another geography

(2) embedded compliance and language support

(3) a domestic revenue base that can survive currency or geopolitical shocks elsewhere

(4) partnerships that make a Saudi presence a GCC (and eventually global) revenue engine. 

 

The policy regime makes this viable; the capital base makes it scalable; the customer appetite makes it repeatable.

 

The numbers suggest the window is open. MAGNiTT’s H1 2025 data shows Saudi’s venture engine running hotter than regional peers. MISA’s licensing pipeline continues to swell, and specialized channels—entrepreneur licensing, new visa categories, RHQ—shrink the “distance” between a foreign founder and their first Saudi purchase order. On the ground, founders are already speaking a language of execution: Groq’s Jonathan Ross emphasizes co-building, while Huspy’s Jad Antoun talks about fixing specific frictions with local partners. 

 

Finally, Saudi Arabia has moved from being a promising market to a working market for international startups. For founders who can anchor locally, localize deeply, and partner intelligently, the Kingdom is not just another expansion pin on the map—it’s a growth core.

 

Introduction to AI Ethics: Why It Matters More Than Ever

Ghada Ismail

 

We trust AI more than we realize. It’s in our phones, suggesting what to watch, in our cars helping us navigate, and in our offices automating tasks. Soon, it will be making even bigger decisions; about healthcare, finance, and how entire cities run.

But here’s the catch: can we trust it to always be fair, safe, and responsible? That’s where AI ethics comes in.

 

What Exactly Is AI Ethics?

At its simplest, AI ethics is about making sure we’re using AI in ways that benefit society without causing harm. Think of it as the rulebook—or at least the compass—that keeps this powerful technology heading in the right direction.

Some of the key ideas include:

 

  • Fairness: Making sure AI doesn’t discriminate or reinforce bias.
  • Transparency: Helping people understand how decisions are made, rather than leaving it all to a “black box.”
  • Privacy: Protecting personal data so it isn’t misused.
  • Accountability: Being clear about who is responsible when things go wrong.
  • Safety: Ensuring systems are secure, reliable, and not open to abuse.

 

Why It Matters Now

AI is spreading fast, and the stakes are high. A poorly designed system can deny someone a loan, overlook a qualified job candidate, or spread misinformation at scale. Without trust, the benefits of AI could be overshadowed by public fear and resistance. Getting ethics right isn’t about slowing down progress, but rather about building AI people can actually rely on.

 

Why This Matters for Saudi Arabia

Saudi Arabia is aiming to be one of the world’s leading AI hubs, and ethics is a key part of that journey. With the Saudi Data and AI Authority (SDAIA) leading the charge, the Kingdom is working on frameworks that balance innovation with responsibility. As AI becomes embedded in smart cities, healthcare, finance, and beyond, ensuring it is ethical and transparent will be crucial for winning trust, both locally and globally.

 

What’s Next

This post only scratches the surface of a big conversation. AI ethics isn’t just theory, it’s about the choices we make today that will shape how we live tomorrow. In the next article, “Building Ethical AI in Saudi Arabia: Regulation, Innovation, and Responsibility,” we’ll take a closer look at how the Kingdom is putting these principles into action, the challenges it faces, and why getting it right could define Saudi Arabia’s role in the global AI race.