Saudi Arabia’s Startup Scene Eyes M&A Surge Amidst IPO Shifts

Editorial Team

Last updated 29-12-2025

4 min

Saudi Arabia's startup scene is shifting focus towards mergers, acquisitions, and secondary deals.

Merak Capital highlights investors' preference for private deals over volatile public markets.

Despite Tadawul's struggles, Saudi startups attract foreign investment, raising $1.

2 billion in Q3.

The region's ecosystem is maturing, with acquisitions driven by strategic growth ambitions.

Saudi Arabia could become a regional hub for exits via M&A, not traditional IPOs.

It’s been hard to miss the shift happening in Saudi Arabia’s startup scene lately. Every time I chat with founders around Riyadh—or even in those late-night coffees that, you know, somehow turn into mini strategy sessions—the same point keeps popping up: exits are changing. And not in a small way. Venture investors now reckon mergers, acquisitions, and secondary deals are about to take centre stage, especially as public markets remain a bit of a faff.

That’s very much in line with what Merak Capital has been signalling. The Riyadh-based VC says investors are increasingly preferring private deals over IPOs, mainly because the public markets have become tougher on valuations and far more volatile. Abdullah Altamami, Merak’s founder and CEO, put it plainly when he explained that buyers want to catch high-growth companies before they list, where prices tend to shoot up sharply. I suppose that logic is spot on—why chase rising stocks when you can buy early and quietly?

Merak, which manages around $800 million in assets, expects between five and ten liquidity events in the next year or two, including a mix of IPOs, acquisitions, and secondary transactions. And believe it or not, that lines up neatly with what I’ve been hearing from Arageek readers who work in banking and fintech—it’s almost like the whole market is leaning into consolidation as Saudi Arabia’s ecosystem matures under Vision 2030.

Of course, there’s a flip side. The Tadawul has been struggling, ranking among the weaker emerging market performers this year. IPO activity is still generating about $4 billion, but several fresh listings have stumbled after hitting the market, which only adds to investor caution. No wonder private deals are looking more appealing.

Zoom out a bit and the broader MENA region is also warming up to M&A. Magnitt counted 26 startup-related acquisitions in the first nine months of the year, which suggests both strategic buyers and financial investors are hunting for opportunities. Basma Al-Saeedi from Impact46 echoed that sentiment, saying the ecosystem is hitting a natural maturity point that sparks more acquisitions—whether for scale, tech capabilities, or good old-fashioned competitive advantage.

What’s interesting is how this shift is happening at the same time Saudi Arabia is expanding across sectors like gaming, fintech, cybersecurity, tourism, and even fashion. Some of the country’s biggest names—Jahez, Rasan, Lucidya, Tamara—are living proof that local players can scale and attract serious capital. I still remember visiting a founders’ meetup in Jeddah where someone joked that “Saudi unicorns are starting to feel like buses—none for ages, then two at once.” It was an exaggeration, sure, but you get the vibe.

Despite global headwinds, the regional funding numbers remain impressive. Startups raised a record $1.2 billion in Q3 alone, up nearly 60% from the previous quarter, driven by mega-deals over $100 million. Even more telling, foreign investors finally outpaced local ones—a sign that international confidence is building. Meanwhile, Southeast Asia and Africa have been facing some rough quarters, which makes the Middle East’s momentum stand out even more.

Magnitt described the region’s performance as “striking,” crediting sovereign initiatives, regulatory reforms, and tighter cross-border collaboration. And I reckon they’re right. From what I’ve seen around Arageek coverage, these aren’t just buzzwords—they’re helping startups push forward even when global markets get jittery.

If current trends continue through 2026, Saudi Arabia could very well position itself as the regional hub for startup exits through M&A and secondary deals rather than the traditional IPO route. And honestly… well, I mean, given the market swings we’ve been watching, that might be the more sensible option for now. One thing’s clear: the Kingdom isn’t slowing down, and this consolidation wave feels like just the beginning—even if keeping up with it all can be a bit of a faff sometimes.

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