Sukna Capital Targets $100 Million Venture Capital Fund as It Expands Direct Lending Activities

Sukna Capital Financial Company is working to establish a new venture capital fund with a target size of $100 million, as the company moves to expand its activities in startup financing and investment across technology and innovation sectors in Saudi Arabia and the region.

Sukhdi Hansri, Head of Asset Management at Sukna Capital, revealed the plan on the sidelines of LEAP 2026, explaining that the new fund will be the company’s second dedicated venture capital fund.

A Second Venture Capital Fund

Sukna Capital already has a core venture capital fund whose $50 million capital has been fully committed.

The new fund is targeting $100 million, reflecting the company’s focus on increasing the capital allocated to companies with high growth opportunities while maintaining its focus on technology and innovation sectors.

Sukna Capital manages multiple investment strategies spanning venture capital, direct lending, real estate, and private equity, with a focus on companies and sectors linked to digital transformation across the Middle East and North Africa.

Investments Across Technology and Industry

Hansri explained that Sukna’s investments are not limited to technology companies, extending across a range of sectors, including Software-as-a-Service (SaaS), artificial intelligence and other technology companies, as well as industrial companies and acquisition financing.

The company’s investment strategy also focuses on early-stage technology companies, with areas of interest including artificial intelligence, fintech, enterprise software, and advanced technologies.

Debt Fund Targets Additional SAR 250 Million

Alongside its venture capital activities, Sukna Capital is expanding its presence in the direct financing market.

Hansri said the company has a debt fund through which it has invested approximately SAR 100 million to date, and is targeting an additional SAR 250 million over the next six months.

The move reflects the company’s growing focus on private credit, particularly through financing solutions for SMEs and technology companies that have moved beyond the startup stage and entered expansion and growth phases.

In 2025, Sukna Capital received approval from the Capital Market Authority to launch the Sukna Direct Lending Fund, an open-ended direct lending fund targeting SMEs, technology companies, and venture capital funds.

An Open-Ended Direct Lending Fund

The Head of Asset Management at Sukna Capital noted that the company currently has the first open-ended direct lending fund of its kind in the Saudi market, operating as an Evergreen fund.

The open-ended structure allows lending operations to continue without a fixed maximum limit on the amount of financing that can be provided, subject to available opportunities and the fund’s investment capacity.

The fund’s strategy targets part of the financing gap faced by SMEs, with a focus on technology-backed companies, traditional companies with growth opportunities, as well as venture capital and technology private equity funds.

Financing SMEs

Hansri believes the Saudi market offers significant room for the growth of direct lending, particularly within the SME sector, one of the key areas targeted by Sukna Capital.

According to Sukna’s data, the SME financing gap in Saudi Arabia represents a significant market opportunity, while the company focuses on providing non-dilutive financing that enables companies to fund expansion without giving up additional equity stakes.

Debt Complements Venture Capital

Discussing investment opportunities in Saudi technology companies, Hansri said the financing ecosystem needs to combine venture capital and debt as companies move into more mature stages.

He explained that startups rely more heavily on equity financing during their early stages, while the need for debt instruments becomes more important as businesses expand, revenues increase, and operating models become clearer.

He believes building a strong SME market requires financing options that go beyond equity investment, enabling companies to transition from the startup stage into more established growth companies.

Debt Represents 80% of Global Markets

Hansri based his view on the structure of global financing markets, noting that debt represents approximately 80% of markets worldwide.

In his view, expanding the private credit market in Saudi Arabia could provide an additional layer of financing for companies that have reached a stage where venture capital alone is no longer sufficient to fund their growth requirements.

Combining equity investment with debt financing gives companies broader options for managing their capital structures, particularly as they move from product development and business-model validation to larger-scale expansion and operations.

Private Credit Poised for Growth

Hansri expects significant growth in Sukna Capital’s investments over the coming years, with the direct lending fund potentially becoming one of the company’s most important funds.

The outlook is linked to the growth of the Saudi economy and the expansion of the private credit market, alongside rising demand for specialized financing solutions for SMEs and companies seeking growth capital without diluting shareholders’ ownership.

Sukna currently positions direct financing as one of the pillars of its investment strategy, alongside venture capital and other alternative investments.

Expanding the Financing Ecosystem

Sukna Capital’s moves reflect an expansion of its investment model from financing startups through venture capital to providing financing instruments for companies at the growth stage.

The model combines equity and debt financing, enabling the company to invest across different stages of the corporate lifecycle, from technology startups to more mature companies seeking expansion capital.

With the establishment of a new $100 million target venture capital fund, alongside the expansion of its direct lending activities and its target of raising an additional SAR 250 million over the next six months, Sukna Capital is moving to increase the capital it manages and broaden the investment opportunities it targets across Saudi Arabia and the region.