A key focus of Vision 2030 is to create a robust environment for businesses to develop and grow. It aims to broaden the economic base and creates job opportunities. Saudi Vision 2030 has caused significant foreign investment to come to KSA along with several international businesses and investors for the purpose to establish ventures in the country.
The Kingdom of Saudi Arabia\’s venture capital market is quickly expanding as a result of numerous government initiatives aimed at achieving the Saudi Vision 2030. More such initiatives to promote entrepreneurship are being observed than ever before.
Venture Capital – Key Highlights:
Startups in Saudi Arabia increased by 270% while deals increased by 54% by 2021 compared to 2020. H2 2021 was a record half-year with most VC deals closed and funding was collected more than half the year before.
A remarkable number of investors and non-MENA investors have funded Saudi-based initiatives in 2021 From a bird’s eye view, the total rate of startup activity in Saudi Arabia rose significantly. In addition, Saudi Arabia recorded the highest level of market confidence, with 80 percent of people perceiving the outbreak as an opportunity to start a business
Valuation of startups and the uncertainty involved in the valuation process:
Need for valuation for raising funds and attracting investment
Startup Company Valuation aids in calculating the appropriate amount of equity to give an investor in
exchange for funding. Factors like related risk and return on investment are vital to an investor, therefore as
As a result, determining the fair value of a company is critical for all stakeholders involved.
Factors that are accounted for in the valuation of startups are:
Startup Reputation :
For an entrepreneur to survive and flourish in the market, he or she must project a positive image of the company since it is one of the most important aspects investors seek before investing.
Traction :
It relates to how far a startup progressed to date or how much momentum it
has gained through time, bearing in mind its potential customers.
Prototype:
A prototype is critical to the business since it has the potential to influence an investor\’s decision. Before evaluating any startup, one must have a prototype or a minimal viable product available.
Industry :
The industry in which a startup plays a determining role in a reasonable.
company valuation.
Other factors such as pre-valuation revenues, market size, distribution methods, competitors, etc., all contribute significantly to determining a startup\’s fair valuation
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