Merak Capital Unveils $80M Fashion Fund to Boost Saudi Arabia’s Style Sector

Saudi Arabia’s Cultural Development Fund has teamed up with the Riyadh-based investment firm Merak Capital to roll out an $80 million (SAR 300 million) private equity vehicle targeting the fashion sector. It’s a chunky move, and one that signals the Kingdom’s growing interest in turning culture not just into a national talking point but into a proper economic engine.

The new “Fashion Fund” was unveiled during the Cultural Investment Conference, organised by the Ministry of Culture. As Majed Abdulmohsen Alhugail, the Fund’s CEO, put it, the launch marks “a pivotal step toward building a sustainable and competitive Saudi fashion industry.” With Merak taking on fund management and the Cultural Development Fund stepping in as anchor investor, the initiative covers more than just handbags and hemlines. Investments will span across apparel, accessories, e-commerce platforms, supply chain operators, beauty ventures, and even the sort of tech-based fashion innovations that a decade ago might have sounded far-fetched.

What’s interesting is that the focus sits firmly on growth-stage brands with real traction, especially Saudi names with expansion on their agenda. On the flip side, the fund is equally open to new models that leverage technology to sharpen competitiveness. That feels pretty spot on, given the pace at which consumer habits keep shifting in the region.

I remember when Arageek first began spotlighting MENA startups outside the typical fintech or delivery hype. Fashion founders often told us that capital was a bit of a faff to secure—banks didn’t get them, and investors sometimes preferred “safer” tech bets. So seeing a fund of this scale bolted directly onto Saudi’s cultural vision feels like overdue recognition, one that could unlock doors for designers and entrepreneurs who’ve been toiling away quietly.

The Cultural Development Fund says it wants to back projects that don’t just add economic value but reinforce Saudi identity in global markets. And Merak Capital, already positioning itself as a supporter of sectors with national relevance, is keen to mirror that mission. Both parties emphasise that the effort ties neatly into the country’s National Culture Strategy and the wider Saudi Vision 2030 plan—ambitious frameworks aimed at pushing homegrown creativity to international stages.

That said, fashion is a tricky beast. Trends move fast, supply chains can turn into a headache overnight, and not every label survives the test of scaling. I reckon success will depend less on slogans and more on how agile the fund is in picking winners while giving them enough room to fail, learn, and re-launch. Still, at $80 million, it’s a serious bet that Saudi doesn’t just want local talent glued to moodboards—it wants them competing with global players. And frankly, for many designers who’ve been waiting for this moment, they’ll be chuffed to bits.

If anything, this isn’t just about money. It’s about sending a message: culture and commerce can walk hand in hand, and the Middle East is ready to stitch itself directly into the global fabric of fashion. For the startup scene across the region, that’s definately a story worth watching closely.

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