Saudi Technology Ventures (STV), the region’s largest tech-focused venture capital firm and a backer of unicorns like buy-now-pay-later platform Tabby, has marked the final close of its inaugural non-dilutive fund to offer growth capital to technology companies in the region.
The Riyadh-headquartered VC firm, with over $800 million in capital, has raised $100 million for the STV NICE Fund I, it said in a statement. The fund aims to allow companies to grow their business while avoiding equity dilution.
The investment vehicle secured the backing of Saudi Awwal Bank’s investment arm SAB Invest and several family offices. SAB Invest deployed the capital through its Alternative Financing Fund.
The Non-Dilutive Investment in Callable Equity (NICE) structure allows investors to back high-growth opportunities in the tech sector while generating regular income within a Sharia-compliant framework.
NICE is a first-of-its-kind instrument in the Middle East and North Africa region that provides an attractive alternative to traditional venture debt. NICE gives founders the option, but not the obligation, to buy back this equity in installments over the maturity period.
Fintech unicorn Tabby was the first company to receive such non-dilutive financing from STV.
The non-dilutive capital vehicle initiative is supported by the National Technology Development Program (NTDP) and aims to address the financing gap for tech startups in the Kingdom, STV said.
“Our strategic backing of non-dilutive initiatives will create a sustainable, scalable funding platform to meet the increasing demands of tech startups in the Kingdom,” said Ibrahim Neyaz, CEO, NTDP.
The fund has already invested in several tech startups, including an end-to-end automotive services company Morni, smart shipping lockers network RedBox and car subscription platform Invygo. STV also backed construction tech platform BuildNow through the NICE structure.
STV, established in 2018 by Saudi Telecom Company, is the largest privately held technology VC investment firm launched in the Middle East to date.
