The release of the inaugural 'State of Web3 in Saudi Arabia' by Adaverse marks a significant milestone in showcasing Saudi Arabia as a top destination for Web3 entrepreneurs, investors, and talent globally. This report offers a detailed examination of the Kingdom's dynamic Web3 environment, emphasizing its appeal for international players looking to enter, invest in, and launch ventures in Saudi Arabia.

Adaverse Report Highlights:

Web3 Potential:

Saudi Arabia stands out as a favorable market for Web3, attributed to its youthful and highly digitalized population (63% under 30, 99% internet-connected), supportive government policies conducive to Web3, and ample funding avenues. In the first quarter of 2024, MENA startups secured $429 million across 163 deals, with Saudi startups capturing 51% of the total funding, indicating the lucrative opportunities available in the region.

Key Sectors:

The report emphasizes several sectors in Saudi Arabia ripe for Web3 disruption:

1. Gaming: Currently valued at $1.8 billion, with a projected growth to $6 billion by 2027.
2. Fintech: Boasting a market size of $746 million, witnessing growth in payment solutions, lending platforms, and business tools.
3. E-commerce: In 2023, e-commerce generated $10 billion, with 34.5 million Saudis engaging in online shopping, expected to grow at a robust CAGR of 13.5% until 2027.
4. Proptech: Valued at $763 million, proptech plays a crucial role in attaining Vision 2030's economic objectives.

Startups:

The Saudi Web3 startup landscape showcases a notable focus on user-centric applications, signaling rising interest in DeFi, GameFi, and SocialFi. However, there exists a scarcity of foundational infrastructure and protocol startups, presenting significant opportunities for aspiring entrepreneurs and investors.

Investors:

The Web3 ecosystem in Saudi Arabia is witnessing substantial growth fuelled by a blend of local and international investors. This synergy creates a conducive environment for startups, blending local market insights with global expansion opportunities in alignment with Vision 2030's objectives of fostering economic diversity and innovation.

Talent Demand:

Feedback from startup and investor interviews underscores a high demand for Web3 talent coupled with a shortage in this sector. This gap highlights opportunities for educational initiatives to upskill local talent and attract global talent to Saudi Arabia for employment.

Future Outlook:

Despite a positive outlook, challenges such as regulatory ambiguities, the need for enhanced awareness and education on Web3 technologies, and concerns about technological infrastructure and cybersecurity persist. These challenges, however, present avenues for entrepreneurs and investors to shape the future of Saudi Arabia's Web3 ecosystem.

Vincent Li, Founding Partner of Adaverse Remarks:

Vincent Li, the Founding Partner of Adaverse, expressed excitement about their expansion into the Middle East, specifically Saudi Arabia, driven by the population's tech-savviness and the government's progressive stance. Li believes that Web3 technology can revolutionize various sectors in Saudi Arabia, aligning with Vision 2030's goals of digitization and innovation.