Talk First, Business Later: How to Enter the Saudi Arabian Market for Startups

As part of the Kazakhstan Global project, we continue exploring the Saudi Arabian market. In our interview with Aslan Sultanov, founder of White Hill Capital (which manages Tumar Venture Fund), we touched on some key aspects of this unique market. But what about Saudi Arabia’s IT ecosystem? Which tech solutions are in the highest demand? Is it true that Saudis are willing to invest massive amounts in startups? And most importantly — can founders from Kazakhstan realistically expect to secure large investments there? To answer these and many other questions, we spoke with investors, experts, and startup founders who have hands-on experience in the Saudi market.

Today, we’re talking with Igor Ovcharenko, CEO of Al-Farabi Innovation Hub, which has become a bridge between our region and the Middle Eastern market. Our guest shared insights on how easy (or difficult) it is for Central Asian startups to integrate into an ecosystem with a different business culture, how to localize their products, and how to land those crucial first sales. He also explained why it’s best to avoid talking business in initial meetings, why hiring a local partner is essential, and the value of the hub’s acceleration program, Al-Farabi ScaleUp. Recently, seven startups from Kazakhstan, Uzbekistan, and Azerbaijan completed the program — and they also shared their experiences and impressions of the Saudi Arabian market with us.

«Saudi Arabia’s Key Economic Players Are Family Conglomerates That Own Businesses Across Multiple Industries»

— What aspects of doing business in Saudi Arabia might be the most surprising for startups from Central Asia?

— Sales and market entry strategies that work in Central Asia and Europe have proven to be less effective here. For example, in Kazakhstan or Uzbekistan, having a recommendation from a high-ranking official or a major businessman can open doors to negotiations and often speed up closing a deal.

It’s a different story in MENA — you have to build relationships yourself. Initial negotiations often happen in informal settings — over dinner or even at 11 p.m. with a hookah. At first, you talk about everything except business. The key is to find common ground and build a personal connection. You have to wait until you hear the crucial question: ‘How can I help you?’

Another key discovery is the importance of family businesses. Saudi Arabia’s key economic players are family conglomerates that own businesses across multiple industries. For example, the same family might run a bank, a factory producing satellite spare parts, a chain of car dealerships, and a farm. These families are also well-connected within their industries. This means that if a startup secures a contract with one part of a large business, it could gain access to multiple sectors at once. Once again, the ability to connect with the right people and build strong relationships is crucial.

— Are there any tips or tricks for startups to build the warmest possible relationships with businessmen in Saudi Arabia?

— Be patient. Deals don’t happen quickly, and the decision-making process can take months. In other countries, you might expect a response within a day or two after reaching out. But here, it’s different. You might send five or six messages and hear nothing back — then, two weeks later, the person suddenly messages you with, ‘Hi, how are you?’ and jumps straight into business with, ‘Let’s discuss.’ They don’t see it as ignoring you — it’s just their pace, and your message wasn’t urgent in their world.

Active participation in events, public speaking, interviews, and an overall visible presence in public life is highly valued here. Decisions about cooperation are often made not just based on documentation but on personal meetings and recommendations. For example, if someone saw you at an event or even just met you at a café over coffee, that interaction could play a role when it comes time to make a decision.

It’s a big plus if you can relocate. Being available is key — you should be ready for late-night meetings, casual chats, and conversations without a set agenda. For Saudis, even details like where your children go to school matter. If they’re enrolled in a local school, it signals that your intentions are serious.

A local partner can also help you build connections, but these experts usually expect a share in the business. That’s why it’s crucial to choose the right person carefully — after all, they’ll become a co-owner of your startup.

«We Were Looking for Mature Teams Who Want More Than Just Theory»

— There seem to be many nuances that can be confusing when entering the market for the first time. How does Al-Farabi Innovation Hub help startups adapt to Saudi Arabia?

— The hub serves as a comprehensive entry point for startups looking to break into the regional market. It’s our soft-landing platform, designed to help companies adapt, find partners, and develop a scaling strategy. One of our key initiatives is the Al-Farabi ScaleUp acceleration program, which helps scale-ups — companies that have already moved beyond the early startup stage — build trusted relationships with local players and integrate into the business ecosystem.

Looking ahead, we plan to expand our offerings by launching new initiatives, such as roadshows (presentation tours).

— Is there a high demand from startups to join these accelerator programs?

— We received over 100 applications, conducted 35 interviews, and selected 13 companies.

We weren’t just looking for teams with great products — we wanted startups that genuinely see Saudi Arabia and the MENA region as their next step for scaling and expanding into international markets. Entrepreneurs often apply to accelerators ‘just in case,’ but for us, commitment matters. We look for startups with a clear understanding of their niche, real products, and annual sales of over $1M.

Our main selection criteria:

• The product has already achieved product-market fit, with existing clients and a clear business model.
• Founders know exactly why they need this market — they’re not just exploring options but actively building an entry strategy.
• A focus on B2B and B2G — we ruled out B2C projects from the start since they don’t require an accelerator and can operate remotely.

We selected experienced teams that need more than just theory — they need real connections, contacts, and support in adapting to the market. They could enter this market on their own, but our goal is to fast-track their journey, shorten the time to results, and accelerate their integration into the MENA ecosystem.

«No One Expected Signed Contracts Within Two Months — The Market Is Complex and Decisions Are Slow»

— Which startups successfully completed the program?

— Of the 13 startups selected, 10 joined the program, and 7 successfully completed it. Those who dropped out struggled to adapt to market conditions and weren’t prepared for such an intensive workload.

In the end, the following projects remained:

From Kazakhstan:

1) FACEPLATE – a platform for monitoring and managing electric grids, designed for national operators and large companies. It already has an established business in Central Asia.

2) InteractiveRange – an EdTech startup that teaches children cybersecurity through hands-on scenarios. They aim to expand into the corporate and educational sectors in MENA.

3) Biometric Vision – a KYC solution(user identification) for banks and FinTechs, using biometrics and AI-driven data analysis for user identification.

4) OpenSky – a marketplace connecting private jet owners and users. With Saudi Arabia actively developing its aviation market, interest in this solution is high.

From Uzbekistan:

1) Sales Doctor – a software developer specializing in business automation and sales accounting for the retail sector.

2) Smartup – an ERP system designed to automate distribution and inventory management for FMCGs and retail companies.

From Azerbaijan – Push30, a mature startup offering corporate fitness subscriptions for company employees. Their solution allows employers to provide flexible and convenient access to sports facilities.

— What were the key focus areas when working with these projects during the accelerator?

— The program lasted about three months — starting online and then moving offline to Riyadh. The online stage was conducted in partnership with Plug & Play, one of the world’s largest accelerators. They organized educational sessions and helped startups gain a deeper understanding of the MENA market.

We kicked off the offline stage with an assessment to understand exactly what each startup needed — who they wanted to meet, which companies interested them, and which investors were the right fit. Some had a list of potential clients, while others had a general understanding of the niche but no specific contacts. We helped them refine their focus and build a market entry strategy.
Next, we facilitated market entry by organizing meetings and helping startups adapt to the local business culture.

— What did startups achieve as a result of the acceleration program?

— No one expected contracts to be signed within two months — the market is complex, and decisions take time. But most importantly, startups gained real contacts and a clear roadmap on who to engage with and how to move forward. Many plan to return after Ramadan to solidify their progress.

Throughout the program, startups had dozens of meetings with potential partners, investors, and clients. For example, 40 investors attended the demo day. Events like these aren’t just formalities — they are important, and decisions can be made there. Negotiations are ongoing, but some startups already have promising deal prospects. One startup is in talks for a pilot project with a major Saudi company, while three finalists are discussing investment terms.

«Online Communication Isn’t Enough — Personal Meetings Are Key»

Participants of the Al-Farabi ScaleUp program also shared their impressions. Daniyar Kasenov, founder of the cybersecurity education platform InteractiveRange, noted that they gained a clearer understanding of the legal and cultural nuances of doing business in Saudi Arabia and secured access to key mentors and investors.

— It was surprising to see how quickly you can build trust with potential partners if you understand market specifics and approach valuable offers the right way. We formed a partnership with the cybersecurity company Solidrange, which will help us adapt our product for corporate clients in Saudi Arabia. We also secured a collaboration with Classera, the region’s largest EdTech platform. Our next goal is to register a legal entity in Saudi Arabia, launch pilot projects with educational institutions, and attract local investors, — says Daniyar Kasenov.

Adil Gasymov, founder of the corporate fitness platform Push30, is also pleased with the results of the Al-Farabi ScaleUp.

— What we value most are the connections we’ve built. The support from the organizers was especially helpful in introducing us to key players in the fitness industry. It’s rewarding to see strong interest in our project from local investors. We realized that online communication isn’t enough—personal meetings are crucial. We also noticed that business processes here move slower than in our other markets. Right now, we’re preparing for our local launch, finalizing company registration, completing due diligence with investors, and working toward signing our first deals.

Yerzhan Janzakov, founder of FACEPLATE (a solution for digital identity verification), shared that he gained valuable skills and experience — the ability to effectively present his product:

— The theoretical part helped us better understand the Saudi market and improve our communication skills. We realized the importance of thoroughly researching regulations and licensing, which will require significant time and effort. Another challenge is competing with local players who are already well-integrated into the ecosystem. Right now, we’re finalizing our company’s registration and fine-tuning the product to align with local standards.

Takeaways

1. Don’t rush to sell — focus on building relationships. In MENA, business is built on trust, and the first step isn’t making a sale but establishing a personal connection.
2. Adapting to the local market is key. Success depends on the ability to tailor your product and value proposition to the specific needs and preferences of local clients.
3. Patience is a key factor for success. In Saudi Arabia, decisions aren’t made quickly — the process can take months and requires both patience and persistence.
4. Personal meetings are crucial. Online communication isn’t always effective — you need to be available for in-person meetings, especially in informal settings, to build trust.
5. A local partner is a must-have. These intermediaries are usually looking for long-term relationships and a stake in the business.