Saudi Arabia Becomes A New Magnet For Web3 Startups, Shifting The United Arab Emirates As The Main Destination

Saudi Arabia is a new magnet for Web3 Startups (Photo; Doc. Itp Net)

JAKARTA - Saudi Arabia has increasingly emphasized its dominance as the top venture investment destination in the Middle East and North Africa (MENA) regions. According to a recent report from Adaverse, this kingdom is now the center of Web3 startups seeking funding. Despite its significant growth, the Web3 industry in Saudi Arabia is still facing major challenges that require collaboration from various parties.

Adaverse reports reveal that the Web3 ecosystem in Saudi Arabia is growing rapidly. In 2023, the kingdom managed to attract 54% of total venture capital funding in the five main countries of MENA. Data from Neurons by Digital Digest showed that in the first quarter of 2024, Saudi startups accounted for 51% of total US$429 million (approximately Rp6.9 trillion) investments in MENA startups, and cover 36.2% of investment deals in the region.

The United Arab Emirates (UAE), which is usually the top investment destination in the region, is now in second place with 37% of total funding and 34% of the investment deal. Saudi Arabia is increasingly attractive to Web3 startups seeking funding.

This spike is driven by factors that create an entrepreneurial and investment-supporting ecosystem, making Saudi Arabia a very attractive place for Web3 startups who want to take advantage of strong funding opportunities, "said the report.

According to Bitcoin.com News information, despite its rapid growth, the Web3 industry in Saudi Arabia is still facing significant challenges, especially regulatory uncertainty. Technological developments in the industry often exceed regulatory capabilities, including in Saudi Arabia. This report encourages Saudi authorities to establish clear and comprehensive regulations to create a stable environment and support growth in the Web3 sector.

In addition, this report highlights the importance of simplifying user experience and developing intuitive interfaces. By increasing ease of use, Web3 startups are expected to attract a wider user base, including those who do not have technical expertise.

Like many other countries, the Web3 industry in Saudi Arabia is also facing a shortage of experts. This report recommends educational initiatives and special training programs. Collaboration between academics, industry experts, and organizations can help develop special curricula in blockchain and decentralized systems," he added.

If these challenges can be overcome, the Web3 startup in Saudi Arabia will be in a unique position to capitalize on available capital, large market sizes, and strong consumer purchasing power. Saudi Arabia appears ready to be the center of Web3 growth in the MENA region, although regulatory challenges and human resources still have to be solved.