We at The Proptech Connection are in ongoing engagements and dialogues with partners in the MENA region, all of which are looking to leverage tech across their new projects and existing portfolio.
Futuristic cites are hot and happening, from Japan to Greece, from Saudi to Singapore. The most notable example is NEOM, an inspiring megacity with a new vision, brought to life in the heart of Saudi Arabia.
The city says it stands for boundless ambition and unyielding innovation. It's a place where you’ll find yourself living in the future. NEOM is supposed to grow into a city where cutting-edge technology converges with sustainable living and where ancient traditions blend seamlessly with futuristic ideals. Saudi Arabia plans to complete the first phase of the $500 billion dollar city by 2025.
This mega city strives to become a global hub for innovation, attracting entrepreneurs and forward-thinking pioneers. With a focus on sustainability, NEOM embraces renewable energy sources, smart city technologies, and a commitment to preserving the environment.
Innovations in fields such as AI, biotechnology, and renewable energy are necessary to make a transformation in the way we live happen. PropTech will play a pivotal role in the development of the futuristic megacity
Impact on the start-up landscape
With the building of the futuristic city, the Saudi start-up landscape has changed dramatically. We have spoken with several local players and there is a lot of excitement and activity in the market, but not the scale (often time) to service some of the major client demands.
The start-up sector in the Kingdom of Saudi Arabia has grown rapidly and had a combined value of more than $11 billion in 2022. While many other countries were experiencing a slowdown in the tech sector during this year, Saudi-based startups raised $972 million in funding, which is a 1.5x increase from 2021.
Of the tech companies in Riyadh, 50% was founded in the past five years, but only 18% of these became a scale-up. The Organization for Economic Co-operation and Development (OECD) calls scaleups those companies that have been growing over three consecutive financial years at an annual rate above 20% in terms of turnover, or number of employees.
One of the biggest challenges that startups in the country are facing is securing enough technical talent. NEOM has attracted top talent from around the world, hence 90+ % of start-ups are hiring talent overseas.
Two months ago, Saudi revealed its plans for making 'The Connector’, a high-speed 57-kilometer railway line that will stretch along the Red Sea coast and connect NEOM’s port city of Oxagon with The Line. The railway line will create more than 4,000 direct and indirect job opportunities.
The railway will be built, according to NEOM's net zero policy. In the same month pre-development studies have started for seven upcoming solar photovoltaic parks in the Tabuk and Duba regions. Spanning over 420 km2, the designated sites are supposed to generate more than 20 GW of energy, accounting for approximately 65% of land usage.
More than technology
NEOM always has the goal is to create construction processes that are more productized and continuous. We are working with a number of global institutions on this and have some of the leading insights.
Overall, NEOM's presence has provided a supportive ecosystem for Saudi startups, nurturing growth, attracting investment, and fostering a culture of innovation.