The Road To Successful Exits In Saudi Arabia: Lessons From Impact46's Investment Strategy As a leading VC firm in Saudi Arabia, Impact46 has proudly backed startups on their path to the stock market, which is a milestone that presents itself as a celebration of the company's growth and legitimization of its sustainability.
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Venture capital (VC) firms have often been described as the lifeblood of innovation, providing not only funding, but also strategic support to startups with the potential to disrupt markets and industries. And the ultimate testament to a VC firm's success is its ability to guide companies to "successful exits," often through a sale or an initial public offering (IPO).
We at Impact46 are committed to supporting top Saudi startups and reinforcing the incredible potential they have. As a leading VC firm in Saudi Arabia, Impact46 has proudly backed startups on their path to the stock market, which is a milestone that presents itself as a celebration of the company's growth and legitimization of its sustainability.
The first investment and exit we did at Impact46 was through the Saudi Arabia-based financial services marketplace Lendo. Impact46 was the first institutional backer for the company in 2019, recognizing the fintech revolution opportunity in Saudi, and the impact of crowd-lending on the SME sector. We invested at the idea stage, and exited after multiple investment rounds. This exit allowed the company to better align with its other stakeholders, and demonstrated the importance of creating value, and attracting potential buyers or investors who recognize that value.
The second exit for Impact46 was Tamara, another startup where we were the first institutional investor who invested at the ideation stage, and then followed on in further multiple rounds, before selling our shares to a global payment service provider. This exit emphasized that a local player like Tamara has the consumer needs understanding as well as the technology expertise required for transforming retail experiences, and it also highlighted how Saudi startups could effectively cater to contemporary consumer needs. This transaction in 2021 sent waves through the startup community, as it showed the viable path for local and global collaborations in the fintech field.
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Additionally, KSA-based online food delivery company Jahez's debut on the stock exchange -with a market cap of SAR8.9 billion- allowed it to achieve a stellar exit within three years of impact46's investment, which amounted to SAR137 million in exchange for 40% of the company. Securing an IPO in the Saudi parallel market (Nomu) is a milestone showcasing the strategic vision in identifying scalable ventures. As one of Saudi Arabia's leading food delivery apps, Jahez demonstrated incredible growth dynamics that aligned with global trends towards on-demand services. The company's successful IPO is indicative of a healthy appetite amongst investors for innovative tech-driven companies from Saudi Arabia.
Our most recent listing transaction is KSA-based fintech firm Rasan's public listing on the primary Saudi market with a valuation range up to SAR2.8 billion. Impact46's strategic investment of SAR90 million in the company in 2021 anticipated the pressing need for the insurance sector to adopt tech solutions. Rasan's advancements in tech-driven insurtech solutions appeal to modern customers' evolving preferences, and demanding dynamic response from traditional sector players. Today, Rasan stands as the first and largest insurance aggregator in KSA by gross written premiums (GWP), boasting a market share of approximately 47% in motor for its insurance platform, Tameeni.com.
The past transactions only emphasize the promising future of Saudi Arabia's BIZ Experiencesial ecosystem. These evolutions in the market demonstrate the global potential of Saudi-based startups, and they also attract further investment and support from both local and international players. The opportunity to pave a local homegrown exit , and to forge a path towards an international exit have all been demonstrated by the previous portfolio and startup scene. Now, we look forward to fostering further growth and development with the upcoming revolutionary technology companies in Saudi Arabia.
