Saudi Arabia's burgeoning start-up ecosystem plays pivotal role in driving digital transformation as digital health market is projected to grow by 9.06 per cent.
November 13, 2023
A remarkable transformation is underway in the heart of Saudi Arabia. The intersection of artificial intelligence (AI) and healthcare has brought about a paradigm shift in the way we approach medical diagnosis, treatment, and patient care. A wave of innovative homegrown start-ups in the kingdom is harnessing the power of AI to create ground-breaking healthcare solutions that not only cater to the local population but also hold the potential to make a global impact.
The digital health market in Saudi Arabia is projected to grow by 9.06 per cent from 2023 to 2027, resulting in a market volume of US$1.16 billion. With the generous support of the Saudi government and a fertile ecosystem for innovation, entrepreneurs are finding themselves at the forefront of a healthcare revolution.
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Saudi Arabia's healthcare system has evolved significantly over the years, but challenges such as access to quality healthcare in remote areas and efficient management of patient data persist. In 2016, well before the COVID-19 pandemic forced health services online, a small start-up was laying down its roots in Riyadh.
Cura is a locally developed telemedicine platform that uses AI-powered telemedicine to bridge the gap between patients in remote areas and medical specialists through virtual consultations, democratising healthcare access and reducing the burden on urban medical facilities. Today, it is the largest platform in Saudi Arabia and has over 150 doctors serving up to 430 medical consultations a month.
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"We aim to help redefine the model of care in which patients access healthcare services in Saudi and move towards a digital-first approach where seeing a doctor online becomes people’s first choice and to move as many health services as possible to be in patients' hands," says Wael Kabli, Chief Executive and Founder of Cura. The COVID-19 pandemic catalysed the app’s growth, and in 2021, Cura raised an impressive US$4 million in a series A funding round led by local venture capital firms ELM and Wa'ed, the entrepreneurship arm of Saudi Aramco.
Another Saudi trailblazer, Nala.ai, is an artificial intelligence platform that enables instant medical diagnosis in Arabic. Developed in collaboration with a panel of dozens of medical practitioners, the AI-powered platform streamlines diagnostics and access to healthcare and serves over 200,000 patients.
"Our mission is to reduce the cost of healthcare by tenfold while providing an exceptional healthcare experience,” Othman Abahussein, founder and CEO of Nala, says. "Our whole team is in Riyadh, and all of our human capital investments go into local talent. We made a bet on local talent, and I can say with full confidence that it pays very well."
The company raised US$1 million in its first funding round in the same year of its launch. In May 2023, Nala was acquired by Integrative Health, a local network of patient-centred digital-first urgent care centres for an undisclosed amount.
Over the past few years, there has been a steady increase in venture capital investment in Saudi’s healthcare sector, providing start-ups with the financial resources needed to scale their operations and bring their innovative solutions to market.
Improving the healthcare sector in collaboration with private sector investors is a significant component of Saudi Arabia's Vision 2030 initiative, which aims to diversify the kingdom's economy and lessen its dependency on oil. As part of its Vision 2030 strategy, the Saudi government is actively investing in AI technology and infrastructure. Saudi Arabia has allocated US$50.4 billion in its 2023 budget to healthcare, with a focus on smart technologies.
Venture capital in Saudi Arabia began with a few renowned family offices filling funding gaps not met by institutional banks. They mainly invested in manufacturing and trading, leaving Internet and software businesses to bootstrap or use friends' and family's money. Saudi Arabia now has around 65 venture capital firms, angel investment groups, incubators, and accelerators that have invested in start-ups. The bulk, over 90 per cent, were founded in 2017 and 2018. BADIR's accelerators, KAUST's Entrepreneurship Centre, Saudi Aramco's Entrepreneurship Centre, OQAL Angel Investor Network, Wa'ed Ventures, Women Spark Angel Investor Network, Vision Ventures, and Ra'ed Ventures were pioneers before the kingdom’s roll-out of Vision 2030 in 2016.
Nine funds totalling US$2.4 billion were unveiled during a recent LEAP 2023 event in Riyadh to support start-up growth, while VC funding in Saudi companies surged 72 per cent in 2021 and 2022, totaling US$987 million across 144 deals.
Related: Embracing the future: Saudi Arabia's digital healthcare revolution
The kingdom also boasts a young and tech-savvy populace that is hungry for digital services, making it appealing to investors. Ninety per cent of young people surveyed by the Global Entrepreneurship Monitor thought that starting a business in Saudi Arabia was simple, putting the country first among global economies. Furthermore, 80 per cent of respondents saw the potential to establish a business as a result of the pandemic's effects.
"We have seen tremendous month-over-month growth during the lockdown, and we can’t wait to keep innovating our technology and services to help people in need live the healthiest and most convenient lifestyle we can possibly offer them," Mohammad Zekrallah, co-founder and Chief Technology Officer at Cura, says. “It’s definitely exciting times for the digital health industry in the region nowadays, especially post-COVID-19 pandemic."
The year 2023 has been the best-performing year for Saudi Arabian venture capital, aggregating US$446 million in H1 alone. Seventy-five per cent of the investments in Saudi start-ups came from local investors, suggesting the potential for a robust sandbox-style domestic market for innovation that can be iterated and expanded beyond the kingdom.
According to Dr. Nabeel Koshak, CEO and board member at Saudi Venture Capital (SVC), a Saudi government investment company, the Kingdom’s leading position in the VC scene in the region comes as a result of the many governmental initiatives launched to stimulate the start-up ecosystem.
SVC was established in 2018 and aims to stimulate and sustain financing for start-ups and SMEs from pre-Seed to pre-IPO by investing US$1.6 billion through investment in funds and co-investment in start-ups. To date, SVC invested in 43 funds that have invested in 674 companies through 1,257 deals. In November 2022, SVC invested US$10 million in TVM Capital Healthcare’s Afiyah Fund to invest in innovative companies in the healthcare sector in the Kingdom of Saudi Arabia. Koshak explains that this is one of a series of investments to develop and sustain financing for start-ups and SMEs in strategic sectors, such as healthcare.
Source: Magnitt
The convergence of AI and healthcare is reshaping the landscape of medical services, and Saudi Arabia's burgeoning start-up ecosystem is playing a pivotal role in driving this transformation. Aspiring young entrepreneurs in Saudi Arabia have a golden opportunity to leverage AI's potential to develop innovative healthcare solutions that not only cater to local needs but also have the potential to shine on the global stage.
Through the power of AI and other advanced technologies, these start-ups are revolutionising healthcare delivery, improving patient outcomes, and creating new opportunities for economic growth. With government initiatives and venture capital funding support, the future looks bright for healthtech start-ups in Saudi Arabia. As they continue to innovate and collaborate, these start-ups will play a crucial role in shaping the future of healthcare in the Kingdom and beyond.
The rise of healthtech start-ups in Saudi Arabia has the potential to revolutionise healthcare delivery and improve patient outcomes in several ways:
Enhanced access to healthcare: Teleconsultation platforms like Cura and Labayh are breaking down geographical barriers, allowing patients to access healthcare services remotely. This is particularly beneficial for individuals in rural areas or those with limited mobility.
Improved efficiency and accuracy: Start-ups like Nala.ai are harnessing AI and machine learning algorithms to improve the accuracy and efficiency of medical diagnosis, leading to faster interventions and better patient outcomes.
Streamlined healthcare journeys: Platforms such as Tabib Group and Clinicy are simplifying the healthcare journey by digitising workflows and providing personalised solutions. This reduces administrative burdens, enhances patient satisfaction, and improves the overall healthcare experience.
Empowering healthcare professionals: Healthtech start-ups are empowering healthcare professionals by providing them with advanced tools and technologies. This enables physicians and clinics to deliver high-quality care, improve patient engagement, and optimise practice management.
Saudi Arabia, with its rapidly growing population and increasing healthcare needs, presents fertile ground for healthtech start-ups to thrive. The government, recognising the importance of a robust healthcare system, has made significant investments in infrastructure development and healthcare reforms. As a result, the healthcare sector has become a priority, attracting both local and international investors.
Cura: Transforming access to healthcare
One of the most exciting healthtech start-ups in Saudi Arabia is Cura, a mobile app that offers remote consultation services with doctors. With over 150 doctors across 34 medical specialties, Cura provides users with convenient access to medical guidance and consultations. The app has gained significant traction, serving over 430 consultations in a month. Cura's success highlights the potential of teleconsultation services in improving healthcare accessibility and reducing barriers to quality care.
Labayh: Empowering mental health
Labayh is another notable start-up in the Saudi healthtech scene, focusing on teleconsultation services for mental health. The platform offers online consultations with psychologists, psycho-educational resources, and corporate wellness programmes. By leveraging technology, Labayh aims to address the growing mental health challenges faced by individuals and organisations. The start-up's dedication to mental health exemplifies the wide range of healthcare services that technology is revolutionising.
Nala.ai: Innovating diagnosis tools
Nala.ai is a Saudi healthtech start-up focused on developing innovative diagnosis tools. By harnessing AI and machine learning algorithms, Nala.ai aims to improve accuracy and efficiency in medical diagnosis. The start-up's cutting-edge technology has the potential to enhance the diagnostic process, leading to faster and more accurate medical interventions. Nala.ai's work exemplifies the transformative power of AI in healthcare.
Tabib Group: Redefining medical concierge
Tabib Group is a Saudi start-up that offers medical concierge services, providing personalised healthcare solutions to individuals and families. By leveraging technology and partnerships with leading healthcare providers, Tabib Group aims to streamline the healthcare journey, offering convenience and peace of mind to its clients. The start-up's commitment to customer-centric healthcare reflects the changing expectations of patients in the digital age.
Clinicy: Empowering physicians and clinics
Clinicy is a Saudi healthtech start-up that focuses on empowering physicians and clinics through innovative digital solutions. The start-up provides various services, including practice management software, electronic health records (EHR), and patient engagement tools. By digitising healthcare workflows, Clinicy aims to improve efficiency, enhance patient care, and reduce administrative burdens for healthcare providers.
This article appears in the latest issue of the Omnia Health Magazine, read more here
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