Startups looking to IPO in Saudi Arabia are plenty — but early-stage readiness remains an obstacle

Startups in Saudi Arabia are keen to go public, but ambition alone isn’t enough to carry the Kingdom’s IPO pipeline across the finish line. That’s the primary takeaway from Endeavor and SVC’s survey of 30 regional founders.

The majority (77%) of surveyed founders are actively exploring a potential IPO, with most targeting an exit within the next two to three years. Only a small minority have ruled out an IPO as their exit strategy, and investor sentiment broadly mirrors founder optimism.

Tadawul remains the darling: The surveyed founders are nearly unanimous in their preference of Tadawul over other exchanges, reflecting a maturing domestic market.

High (but reasonable) valuations are a defining feature

Saudi Arabia’s venture-backed IPOs stand apart from peer markets — including India, Brazil, Indonesia, South Korea, Turkey, and Hong Kong — because of high valuations and capital intensity. The Kingdom recorded more than 2.5x the peer median for pre-IPO valuation, coming in at USD 545 mn. Saudi companies generate around USD 3.10 in valuation per USD 1 invested, placing the Kingdom fourth behind South Korea, Turkey, and Hong Kong.

The gap between pre- and post-IPO valuations is also relatively narrow at 6.99%, indicating disciplined pricing rather than arbitrary calculations. The smaller IPO premium compared to its peers means less capital is typically raised at listing, which can limit post-IPO growth plans and make the market less attractive for high-growth tech companies that depend on larger fundraising.

Saudi capital markets also demonstrate strong capital intensity, with an average of USD 215 mn invested per VC-backed company across equity and debt, ranking second among peer markets behind Brazil. Meanwhile, the pipeline remains early stage but carries strong upside, with only five VC-backed IPOs between 2020 and 2025.

So, what’s the hold-up?

Governance + organizational gaps are holding back IPO readiness: Many founders remain unable to build a compelling IPO case, with leadership teams not adequately set up for the degree and depth of engagement that’s needed with public market investors. Roughly half of firms acknowledge that their current corporate structures fall short of listing requirements, and major components of public-market accountability — enterprise risk management, independent board oversight, dedicated investor relations and legal leadership — are in many cases incomplete or altogether absent.

Co-investments can fill the growth stage capital gap: Over 80% of Saudi VC funding is concentrated at the early stage, creating a series A+ funding gap. Coordinated co-investment among public capital, local venture funds, and banks — supported by public-private programs — would help close that gap and create the recycling dynamic that mature markets depend on.

The path forward also rests on Nomu evolving from being an SME venue into a genuine stepping stone for scaleups. Founders gravitate toward the main market because of its liquidity and depth, but Nomu can become a meaningful staging ground by creating clearer graduation routes to the main market. Meanwhile

AND- A stronger IPO environment can be built through a multiplier effect: The limited number of VC-backed IPOs resulted in fewer founder role models and mentors. Strengthening founder-to-founder knowledge transfer networks and encouraging IPO alumni to reinvest capital, expertise, and networks can create a multiplier effect that drives innovation cycles and future listings, the report says.