Egyptian startups are becoming more cautious about expanding into Saudi Arabia after some companies entered the market too early, spent heavily and underestimated differences between the two countries, according to Dina El-Shenoufy, co-founder and general partner at F6 Ventures.
The trend peaked in 2022 and 2023, when economic uncertainty and currency devaluation in Egypt pushed founders to seek revenue diversification. Investors also encouraged expansion, particularly when Saudi or other Gulf investors were part of a startup’s cap table.
Saudi Arabia offers strong purchasing power, high card usage and widespread familiarity with online services. However, customer targeting, culture and marketing language differ from Egypt, making expansion expensive when companies get the strategy wrong.
El-Shenoufy said Egyptian startups should first stabilize their domestic operations, build a financial cushion and spend time understanding Saudi customers. Companies treating the Kingdom as a quick escape from problems at home are more likely to struggle.
Rabbit illustrates the risks. The Cairo-based quick-commerce startup announced a Saudi entry in April 2025, but FWDstart later reported that it had exited. Rabbit has not formally confirmed the withdrawal or explained the reasons.
F6 Ventures now focuses more heavily on Saudi founders and long-term residents who understand the market. The firm also requires pre-seed startups to have at least a minimum viable product, while assessing execution, unit economics and the potential to scale efficiently.
Source: Arab News
