Fintech at the Frontier: 48 Hours at 24Fintech

I just returned home from the inaugural 24Fintech conference in Saudi Arabia and I’m reflecting on the rapid growth of the fintech industry in the region.

The Kingdom is positioning itself as a hub for the growth of the fintech sector – and there are several reasons I’m excited.

1. Government and regulatory support

Saudi Arabia’s fintech ecosystem extends beyond aspiring entrepreneurs.

The government’s Vision 2030 goal is to encourage the creation of 500 fintechs by the end of the decade. Saudi Arabia is already halfway there – with 224 – which is already above their interim target.

One of the biggest booths at the event was The Saudi Central Bank (SAMA). While early, they’re ostensibly looking to support the ecosystem from a regulatory perspective. They’ve launched a regulatory sandbox — currently housing 19 fintechs and supporting 50 since its launch in 2018.

2. The development of local unicorns

In my book Exit innovation (HBR), I have documented the phenomenon of startup concentration—once a critical mass of scaling startups is achieved, there is often an explosion of high-value companies in the coming years. There are many factors that contribute to this. For example, local venture capital firms that backed the first few startups (and one of them can be written off as an exception) are seeing their first exits, creating a recycling of capital in the region. What’s more, a generation of executives who have been trained in scaling startups are ready to step into their own companies or mentor the next generation—and have the confidence to do so.

The Saudi startup ecosystem is showing early signs of this concentration and exits. The kingdom now boasts at least two homegrown unicorns—Tamara and stc pay, both fintechs (with Tabby joining the club after relocating to Saudi Arabia in 2023). This formation of unicorns is likely just the beginning. With 13 Saudi startups preparing for IPOs in the next two years and a healthy local IPO and M&A market, we are witnessing the early stages of what could be an exciting growth phase.

3. The size of the local market

To win in the MENA region, one common strategy is to expand into Saudi Arabia. Its size, combined with a young, tech-savvy population and high smartphone penetration, makes it a target for both local and international fintech players.

One example – Kingdom is, as far as I know, the only emerging market that supports two Buy Now, Pay Later (BNPL) unicorns (Tabby and Tamara). This is a testament not only to the size of the market, but also to the appetite of customers for the product.

Anecdotally speaking, many of the offers I receive from MENA startups include a plan to expand into the region.

4. The Growing Venture Capital Ecosystem

Saudi Arabia has over 120 VC funds that have backed over three thousand startups. Saudi Arabia was the top regional VC funding ecosystem, with almost $1.4 billion in capital last year (up 33% from 2022). Fintech was a key beneficiary, representing over $700 million.

This growth in VC fintech activity is not just coming from local sources. Many global investors are actively involved. One of the two panels I attended was with Monika Brand Engel, co-founder of Quona Capital. She highlighted the growing interest of international VCs in the region – and like Fluent Ventures (the fund I work with), is already investing in the region.

5. Local entrepreneurs are adopting global models with a Saudi twist

Saudi entrepreneurs do not copy and paste global fintech models, but adapt them to the Kingdom’s unique needs and regulatory environment.

My second panel was on creative approaches in fintech with local entrepreneurs. Smeetha Ghosh, co-founder of Cashee, an app aimed at young users in the banking sector, explained that Cashee, while inspired by global players like Greenlight (US) and Henry (UK), has taken a localized approach – both on the regulatory side and distribution through banking partnerships.

Fintech (like all technology) is not copy-paste. Local context matters. BNPL, which developed in the region, had to be adapted to Sharia law, for example. This mix of global inspiration and local adaptation is key to a dynamic fintech ecosystem.

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The energy I witnessed at 24Fintech was palpable. Given its inherent strengths – a deep local market with a young population, a growing venture capital ecosystem, real exits and government support, the next few years in fintech in the Middle East in general and Saudi Arabia in particular are sure to be interesting.