Saudi Arabia through the Saudi Authority for Industrial Cities and Technology Zones (Modon) has sealed a deal to develop smart warehouses with the aim
Saudi Arabia through the Saudi Authority for Industrial Cities and Technology Zones (Modon) has sealed a deal to develop smart warehouses with the aim of meeting the booming e-commerce demand.
The deal will see construction of 14 new high-tech warehouses that will be operated based on a public-private sector partnership model. The new warehouses will be “fully digital and automated,” allowing businesses to access their storage units via a smartphone app. Modon’s latest project is part of a broader investment boost that will drive further automation in the retail sector.
Investments in the country’s logistics infrastructure come at a time when eCommerce in the kingdom is booming. According to a report published by Checkout.com in October, 91% of Saudi consumers now shop online and 14% reported doing so at least once a day.
E-commerce demand
What’s more, in 2022 the country emerged as a favorite destination for venture capital investment. Managing to buck the wider regional trend, Saudi Arabia experienced year-over-year growth in VC investment in every quarter last year and for the first time attracted more VC dollars than its Gulf Cooperation Council (GCC) neighbor, the United Arab Emirates, in the second quarter of 2022.
As MAGNiTT reported last month, total funding in the kingdom rose to $987 million in 2022, a 72% increase compared to the previous year. Behind FinTech and food and beverage funding, the most VC investment went to transport and logistics ($180 million) and eCommerce ($119 million).
Fueled by the country’s thriving eCommerce sector, recipients of VC checks last year included several startups that are catering to rising demand for last-mile delivery services. Delivery firm Mkhdoom and Redbox, a parcel locker operator in the country, are examples of this, raising a $1.1 million seed round and a $5 million pre-Series A round last year, respectively.