Saudi Arabia’s HRtech raises $30m, eyes expansion

Saudi Arabia’s startup ecosystem continues to thrive amid government efforts to support the sectors and growing investors’ interest in different sectors.

Jisr, one of Saudi Arabia’s human resources tech firms, recently concluded its series A financing round of SR112 million ($30 million), aiming to delve deeper into diverse sectors.

Described as the most substantial series A funding in the Middle East’s software-as-a-service domain, the financing was spearheaded by Saudi Arabia’s Merak Capital.

Established in 2016 by Mohammed Al-Johi, Jisr claims to be Saudi Arabia’s pioneering HR management platform, serving a clientele of over 3,000 across approximately 16 sectors.

In an interview with Arab News, Al-Johi elucidated how this capital infusion seeks to amplify the company’s operational prowess and growth ambitions.

The entrepreneur aims to leverage the funds to bolster Jisr’s existing operations and to venture into synergistic verticals.

Data issued by the Federation of Saudi Chambers reveals a robust HR market in the Kingdom, valued at over SR6 billion.

“We are redefining the scope of HR software, moving away from just an HR information system software to a suite of products built around employees,” Al-Johi said.

“With this investment, we will speed up delivering our mission of building the HR ecosystem for small and medium enterprises in the region, it will help us serve more customers and improve their productivity when it comes to managing their people,” Al-Johi stated.

“Through Merak’s investment in Jisr, our goal is to advance the modern HR technology system. We aim to achieve this by developing products that enhance every aspect of HR operations, from recruitment and management to payroll processing, all seamlessly integrated with various platforms,” he added.

Abdullah Al-Tamimi, partner and CEO of Merak Capital, shared his vision for a more harmonized market landscape.

“Integrations are expected to continue to play a pivotal role in the ecosystem,” Al-Tamimi said, adding to Al-Johi’s mission of creating a more comprehensive product.

“The more integrated the solution, the more powerful it will be in serving businesses and their needs, whether they are small and medium enterprises or large corporations,” he added.

Al-Tamimi further elaborated on Jisr’s position in the Saudi market, emphasizing the company’s significant potential.

“Jisr is the leading player in the market currently, and we see it maintaining that leadership role,” Al-Tamimi stated.

“As a pioneer, Jisr will be expected to be up to date in the latest offerings for the market, as well as pushing the innovation wheel forward,” he added.

The company currently provides innovative solutions to enhance HR management for businesses. These solutions encompass attendance tracking, adaptable payroll integrations, business trip coordination, and performance analytics tools.

Commenting on Jisr’s future plans, Al-Tamimi indicated that the company is considering introducing additional fintech solutions.

He said: “We expect further fintech solutions from the company and a bigger role from established financial institutions in enabling SMEs through their HR systems and peripheral tools.”

Al-Johi also revealed his company’s future plans, stating that more products and services are already underway.

“We started in 2016 serving very small businesses and covering only the operation side of human capital. We have expanded since then to serve mid-market and build products to digitize the whole HR cycle. We are launching our Jisr Applicant Tracking System and will launch three more products in the next year,” Al-Johi said.

Building on its established customer base, Jisr is poised to further transform the HR landscape, targeting significant growth in 2024.

Since its founding, the company has garnered 350,000 registered employees, with expectations for more registrations in the upcoming year.

“We have been recording more than 150 percent year-on-year growth in the last few years and our platform is used by more than 350,000 employees. Our next target is to have 1 million registered employees,” Al-Johi stated.

The company’s target to almost triple its user base coincides with the significant growth in the Kingdom’s SaaS market.

Global data firm Statista forecasts that the software as a service market in Saudi Arabia will see an annual growth of 5.03 percent from 2023, reaching $519 million by 2028, up from $406 million this year.

Additionally, enterprise software and IT solutions were one of the most funded sectors in Saudi Arabia in 2022, garnering $104 million across 19 deals.

Furthermore, Merak Capital stands as one of Saudi Arabia’s leading investors in SaaS solutions. Al-Tamimi said the company plans to ramp up its activity even further.

“With multiple SaaS companies in our portfolio, we have developed market expertise in how SaaS platforms scale in the region, and more specifically, Saudi Arabia,” he said.

“Merak intends to continue its investment in more and new SaaS verticals, especially business-to-business core solutions that are essential for businesses to operate, with a focus on locally integrated products that can compete with both local incumbents and international new entrants,” he added.