RIYADH: The Middle East and North Africa’s startup ecosystem is ending the first quarter of 2025 with significant momentum, marked by high-value deals, strategic acquisitions, and international expansion plans across multiple industries.

From fintech innovation to food and beverage consolidation and media sector growth, these developments underscore the region’s evolving startup landscape and its increasing global influence. 

Nayla Finance secures $4 million to transform SME lending in Saudi Arabia

Riyadh-based fintech startup Nayla Finance has raised $4 million in a seed funding round led by Sanabil Venture Studio by Stryber. The investment will support the company’s mission to address Saudi Arabia’s substantial small and medium-sized enterprises financing gap, estimated at $30 billion. 

The funding includes $2.7 million allocated for micro-business debt financing. 

Nayla Finance is deploying artificial intelligence and alternative data sources to develop credit scoring for small businesses, with particular emphasis on the food and beverage, e-commerce, and retail sectors. 

The firm’s co-founder and CEO, Shaqran Alyahya, emphasized the company’s distinctive approach, saying: “We are building what others hesitate to — empowering important drivers of the Saudi economy with financial solutions designed for their reality.”

The startup’s digital-first platform eliminates traditional banking hurdles by offering streamlined applications, real-time risk assessment, and sector-specific financial products. 

Nayla’s co-founder and chief risk officer, Khalid Naili, added: “By leveraging technology, alternative data, and advanced risk models, we are redefining creditworthiness and unlocking financing for businesses that drive the economy.” 

The firm leverages data-driven credit evaluation and a fully digital platform to streamline financing access for small businesses, eliminating the bureaucratic hurdles associated with conventional banking systems.

Epik Foods acquires Sauce Capital in $15 million deal

UAE-based Epik Foods has made a strategic move to strengthen its position in the Gulf Cooperation Council’s food and beverage sector by acquiring Abu Dhabi’s Sauce Capital. The transaction was supported by $15 million in fresh funding from Ruya Private Capital.  The acquisition creates one of MENA’s largest F&B operators, combining 75 brands under a single umbrella. It significantly enhances Epik’s presence in Saudi Arabia through Sauce Capital’s established operations in the Kingdom. 

The expanded group now operates across 50 locations in the UAE, Saudi Arabia, and Oman, encompassing quick-service restaurants, digital food brands, meal kits, and catering services. 

NKN Media secures $9.5 million for global growth

Dubai-based NKN Media has announced a significant funding milestone, having secured 35 million Emirati dirhams ($9.5 million) with plans to raise an additional 50 million dirhams. 

This capital injection will fuel the company’s ambitious international expansion strategy, reflecting the growing influence of MENA-based media enterprises.

NKN Media is extending its successful Dubai Property Expo to leading global markets, including London, Turkiye, New York, and Moscow. 

It is also launching several new intellectual properties, including the Ultimate Realty Awards in May, the third season of Icons of the UAE in September, and the Majlis Premium startup fundraising forum in October. 

Growing at an excellent pace, our expansion reflects the demand for high-quality media experiences.

Abdul Majid Khan, Group CEO of NKN Media

Additionally, the company is expanding its presence in the inflight media sector, building on the success of its Spice Route magazine to capture premium travel audiences worldwide. 

Group CEO of NKN Media, Abdul Majid Khan, said that the company was at a “defining moment in its journey.”

He added: “Growing at an excellent pace, our expansion reflects the demand for high-quality media experiences. With our recent success, we are not only scaling our flagship events but also venturing into new markets and media verticals.”

According to the CEO, the firm’s focus remains on “delivering impactful content and world-class events that drive business growth.”

He further noted that the next phase of NKN Media expansion would be about scale, innovation, and global reach.

The company benefits from partnerships with major networks, including India Today, Republic TV, and NDTV, along with operations in seven countries across the Middle East, Asia, and North America.

EHC Investment acquires Al-Fanar Gas Group

In a notable deal for the UAE’s energy sector, EHC Investment, through its energy arm Emirates International Gas, has completed the full acquisition of Al-Fanar Gas Group, Abu Dhabi’s largest gas distributor and maintenance provider. This strategic move significantly strengthens EHC’s position in the UAE’s evolving energy landscape.

The acquisition combines Al-Fanar Gas Group’s 30 years of market experience with EIG’s resources and vision, creating a powerhouse in gas distribution and infrastructure services.

Ali Al-Gebely, managing director and board member of EHC Investment, said: “This acquisition will allow us to strengthen that commitment while unlocking new avenues for growth and innovation.”

He added: “Together, we can utilize our combined capabilities to expand our reach and to pioneer next-generation solutions that meet the dynamic demands of our clients and contribute to the nation’s energy ambitions.”

The deal aligns with the UAE Energy Strategy’s goals of infrastructure modernization and operational efficiency enhancement.

RIYADH: Mergers and acquisitions in Saudi Arabia recorded a 55 percent annual rise in 2024 as deal value hit $9.6 billion, fueled by foreign investors and key sector activity.

According to Marsh’s Transactional Risk Insurance report, 59 M&A transactions closed in the Kingdom, with 25 percent of deal activity concentrated in the industrial sector, 20 percent in technology, and 14 percent in consumer and retail — all areas aligned with the country’s Vision 2030 economic transformation strategy.

This helped to fuel an increase in transactional risk insurance across the Gulf Cooperation Council region, with demand climbing 78 percent, the analysis showed.

The robust M&A industry throughout the Middle East and North Africa in 2024 was in contrast to trends in other regions, with a report released by GlobalData in December showing such transactions — as well as those involving private equity and venture financing — recording an annual fall of  8.7 percent during the first 11 months of the year.

In an interview with Arab News, Luke Sutton, head of transactional risk for the Middle East and Africa at Marsh, said: “Foreign investors accounted for 32 percent of Saudi Arabia’s $9.6 billion in M&A activity, including several deals involving consortiums of local and international buyers.”

He added: “The most active non-Saudi acquirers were from the US, UAE, and UK, with 25 percent of inbound investment concentrated in tech, 15 percent business services, 15 percent industrials, 10 percent energy and natural resources, and 10 percent transportation.”

Across the wider GCC, inbound investment accounted for 25 percent of all insured M&A transactions, reflecting a growing presence of foreign buyers in regional dealmaking.

“Saudi Arabia is a market with very significant and well-hedged M&A potential; and government-sponsored capital expenditure is expected to bring opportunities to market as the country focuses on diversification,” Sutton said.

He also highlighted the effect of recent regulatory changes, noting that efforts to boost foreign direct investment have opened up Saudi Arabia to global buyers.

“Warranty and indemnity is a staple feature of M&A transactions in the US, Europe, and Asia. So it is natural that those buyers have imported this trend into the Saudi market,” he said.

According to the expert, the Saudi Insurance Authority’s approval of W&I insurance for the Kingdom’s incorporated buyers is also expected to significantly increase domestic adoption.

Sutton said that transactional risk insurance not only reduces risk, but also plays a key role in expediting deal execution. By covering potential post-sale liabilities, W&I insurance allows parties to avoid lengthy negotiations over indemnities.

When asked if insurance helps speed up closure, he replied: “Yes — very significantly. Buyers and sellers — and their legal advisers — can focus on other facets of the transaction, knowing that the insurance market can back-stop seller representations and indemnities.”

According to Sutton, as Saudi Arabia pursues diversification, warranty and indemnity insurance is increasingly used to manage deal risks — giving buyers protection from hidden issues and sellers a clean, liability-free exit.

As part of Vision 2030, Saudi Arabia has made attracting foreign investment a national priority.

Reforms such as 100 percent foreign ownership in select sectors, streamlined licensing procedures, and a new law that places local and foreign companies under a unified regulatory framework are aimed at boosting the Kingdom’s global competitiveness and reducing its dependence on oil revenue.

The launch of special economic zones, privatization of state assets, and incentives for international companies to establish regional headquarters in Riyadh have all contributed to rising foreign direct investment flows.

Saudi Arabia is targeting an increase in annual FDI from $26 billion in 2023 to $100 billion by 2030. This openness has coincided with the region’s rise as a global investment hub, largely driven by sovereign wealth funds.

The Public Investment Fund, alongside other major Gulf sovereign wealth funds, is no longer just a passive investor, but a key player in cross-border M&A, frequently taking controlling stakes and co-leading big-ticket international transactions.

M&A insurance activity in the GCC

Marsh reported that it had placed more than $550 million in insurance capacity for insured transactions in Saudi Arabia and the UAE, representing a total deal value of $2.25 billion, with a median deal size of $450 million.

SWFs were instrumental in driving deal activity, according to the firm, with 2024 marking the highest level of global deal making by these organizations in more than a decade.

While insured deals still leaned toward the domestic, Marsh noted a growing shift. The investment mix is evolving toward a 50/50 split between domestic and inbound capital, fueled by international partnerships and increased foreign participation in strategic sectors.

The rising presence of private equity funds has also influenced the demand for risk insurance. Their focus on clean exits and post-deal protection has made W&I insurance an increasingly standard part of deal structuring.

“While historically many deals were completed without insurance due to limited insurer appetite and perceived high costs; in the last two years, there has been a significant increase in requests for quotes on deals within GCC,” said Nirav Modi, private equity and mergers and acquisition services practice leader at Marsh.

Regionally, while the total number of M&A deals in the Middle East and Africa fell 13 percent in 2024, deal value jumped 42 percent to $33 billion, as investors prioritized larger, more strategic transactions, according to the report.

Saudi Arabia played a major role in this growth, particularly through infrastructure and public-private partnership initiatives under Vision 2030.

These trends have been matched by a notable evolution in the region’s insurance landscape, as market capacity and competition have grown in response.

According to the report, the number of insurers underwriting deals rose from five in 2021 to nearly 15 in 2024, resulting in broader coverage options and a sharp decline in premiums. Marsh reported a mean premium rate of just over 1.3 percent, down more than 60 percent from three years ago.

Strategic sponsors, including SWF-backed corporates, made up 66 percent of insured buyers, highlighting the role of institutional investors in driving deal flow and relying on insurance to manage complex transactional risks.

As global M&A rebounds in 2025, Saudi Arabia is expected to remain a top destination for international capital, particularly in clean energy, logistics, digital infrastructure, and advanced manufacturing.

With continued regulatory support and a strong push for diversification, M&A insurance is poised to play a pivotal role in facilitating secure, high-value transactions across the Kingdom.