Undercapitalized opportunities in Saudi Arabia’s growth sectors

Shariah investment prospects are available for several critical Saudi sectors, which are driving the Kingdom’s Vision 2030 structural demand, as they remain underfunded despite offering strong growth potentials.

Ziad Malak, investment banking head at Sico Capital, told IFN Investor there is no shortage of capital in this region – but this capacity has yet to fully tap into the compelling pockets of value that remain underexplored. “The gap is not about liquidity, it is due to lack of deal origination and structuring.”

Food security and agri-tech stand out, attracting less than 5% of MENA venture capital despite the Kingdom importing 80–90% of its food. Gaps extend across midmarket industrials, logistics and healthcare.

In logistics, a market set to exceed US$30 billion this decade, capital is concentrated in large infrastructure and giga-projects, leaving midmarket operators underserved. Industrials show a similar pattern, with SMEs contributing significantly to GDP but relying primarily on bank financing.

Healthcare, projected to surpass US$50 billion by 2030, continues to see investment focused on major hospital platforms, with mid-sized providers and specialized services drawing limited private equity interest. While fintech and digital infrastructure are gaining regulatory support but still lack sufficient private investment.

“Mining is a space that deserves significantly more attention. The Kingdom sits on vast untapped mineral wealth with active government backing, yet it continues to attract far less investor interest than its fundamentals warrant”

Tourism and hospitality round out the picture, extending beyond giga-projects to the broader ecosystem of services and businesses being developed, Ziad noted.

A challenge for investments is that the distinction between conventional and Shariah compliance is becoming less of a binary choice and more of a structuring consideration from day one.

“We are seeing issuers who previously relied on conventional instruments now actively choosing Sukuk, not just to access Islamic liquidity pools but because the investor base is deep, diversified and increasingly global.”

For equity transactions, Shariah screening is influencing how deals are structured, particularly around leverage thresholds and business activity filters.

“The implication for advisors is that Shariah compliance can no longer be an afterthought; it needs to be embedded in the structuring process early. Hybrid instruments that blend equity-like returns with Shariah compliant frameworks are an area of growing interest and one where we expect to see meaningful innovation over the next few years.”

Execution and timing are equally critical in volatile markets, said Zaid – with companies that maintain clean financials, with a compelling equity story and well-organized data rooms being best positioned to move decisively.

“Pre-IPO placements, cornerstone investors, and dual-track exit strategies provide optionality and help de-risk execution.”