Saudi Arabia continues its bold investment drive into the technology and leisure sectors, with its latest venture involving a $55 million injection into HyperSpace, a start-up specializing in digital theme parks within shopping centers. This strategic move is part of the country’s ongoing efforts to diversify its economy away from oil dependency.
The funding for HyperSpace primarily comes from Riyadh Season, a government-supported entertainment initiative operating under the auspices of Saudi Arabia’s sovereign wealth fund. Riyadh Season is spearheaded by Turki al-Sheikh, who also chairs the General Entertainment Authority.
HyperSpace is carving a niche by designing immersive parks that blend digital and physical entertainment, catering to Saudi Arabia’s youthful and tech-savvy population. The company’s debut venture in Dubai, spanning 40,000 square feet, has already drawn nearly half a million visitors, each paying $34 for the experience, within the past nine months.
The concept behind HyperSpace is to transform traditional shopping centers by injecting an ‘experience-driven’ aspect, vital for attracting today’s consumers. According to Alexander Heller, HyperSpace’s co-founder and CEO, shopping destinations must find the “cool factor” to entice visitors.
Saudi Arabia’s push into sectors like electric vehicle production, sports, and tourism aligns with its broader ambition to become a global gaming hub. This year alone, the country invested $4.9 billion to acquire the US-based games developer Scopely.
However, there are questions surrounding Saudi Arabia’s ability to attract large numbers of foreign tourists, as it strives to lure 100 million visitors annually by the end of the decade. Not being a traditional tourism destination, the Kingdom faces challenges in achieving this ambitious goal.
HyperSpace’s expansion strategy is not confined to Saudi Arabia; the company plans to venture into the US and beyond. Heller emphasized that Riyadh’s significance as a partner lies in the centrality of shopping centers to Saudi culture, where active engagement in social media is also prevalent.
As online shopping has surged, shopping malls globally have faced challenges in retaining footfall. HyperSpace aims to revitalize these spaces with its innovative blend of digital and physical entertainment.
The recent funding round was led by Galaxy Interactive, a New York-based venture capital firm with a gaming focus, and featured participation from other international investors.
HyperSpace is gearing up to open a new park in Riyadh within six weeks, followed by another location in Dubai in the coming months.
