Saudi Arabia’s STV Launches $100M Equity-Free NICE Fund for Startups

Majd Alshikh

Last updated 4-05-2025

3 min

STV's NICE Fund I offers $100 million to tech startups without taking equity.

Backed by SAB Invest, NTDP, and others, the fund uses a Sharia-compliant finance model.

Companies repay based on revenue milestones, aligning with Islamic finance principles.

The Saudi government aims to boost innovation through strategic public-private partnerships.

The fund targets high-potential sectors like fintech and logistics until late 2025.

When you're launching your own startup, there's often the nagging worry of how much equity you might have to sacrifice just to keep your dreams afloat. That's why there's something genuinely exciting about the latest venture from Saudi Arabia's venture capital firm STV. It has just unveiled NICE Fund I, a $100 million initiative that's shaking things up, offering tech entrepreneurs funding without asking for an equity stake in return. Game-changer? Quite possibly.

Backed by heavyweight partners such as SAB Invest’s Alternative Financing Fund, the National Technology Development Program (NTDP), and various family offices, the NICE Fund introduces the region's startups to a Sharia-compliant financing model. Rather than taking chunks of ownership in promising young companies, the fund uses what's called the NICE instrument—that stands for Non-Dilutive Investment in Callable Equity—to support entrepreneurs in a non-traditonal way. Basically, you get the cash injection you need, then repay it flexibly, guided by the revenue milestones your startup achieves.

One of the real draws of this scheme is its alignment with Islamic finance principles, blending ethical investing with good business sense. It's designed to appeal to more conservative investors who are looking not just for profit, but for the reassurance that their money is being used responsibly.

This fresh approach also shines a spotlight on the Saudi government's keen intention to fuel the Kingdom's innovation through strategic public-private partnerships—think along the lines of Singapore's tried-and-tested tech ecosystem model—investing primarily in sectors bursting with potential like fintech and logistics.

They plan to start deploying this capital until late 2025, offering much-needed funding to startups aiming to scale up, both locally and regionally. Among those who might stand to benefit are innovative companies like Tuba, founded by Fayez Al-Anazi in 2025, a startup using artificial intelligence to streamline the process of healthcare management. Another promising name is Erad, tackling the Gulf region's colossal credit shortfall—an estimated $250 billion problem—by providing small businesses with easier, data-driven lending platforms.

Arageek readers who've ever sweated over surrendering equity will recognise instantly what makes this NICE Fund a rather welcome departure from the usual venture capital rules—all upside and no dilution. A sigh of relief all round for tech entrepreneurs, I'd imagine.

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