RIYADH: One of the largest obstacles facing startups as they get closer to the crucial stage of an IPO is the shift from a founder-driven, fast-paced business to one that has to satisfy the exacting requirements of public markets. This transition frequently necessitates a basic mental adjustment, especially in areas like financial discipline, governance, and regulatory compliance. Many businesses in Saudi Arabia’s quickly changing startup environment will soon have to overcome the transforming process of going from a small, agile startup to a publicly listed enterprise.
In the past, entrepreneurs looking for cash used strategic acquisitions as their main exit strategy. But as more late-stage businesses grow to size, initial public offerings (IPOs) are quickly becoming a practical and alluring choice. The route to public markets is becoming a more popular option for businesses seeking to expand beyond their founding teams and get the funding required for growth as the Kingdom’s entrepreneurial scene develops.
Mohammed Al-Meshekah, founder and general partner of Outliers, an early investor in Saudi Arabia’s Tabby, which is currently valued at $3.3 billion and on track for an IPO, stated, “Many startups struggle in this arena because what worked in their early years — fast decisions, aggressive growth, and loose structures — won’t hold up under public scrutiny.”
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