(Bloomberg) --
Saudi Arabia's stock exchange is in talks with venture capital investors and technology firms in order to recast its small-cap market as a hub for the Middle East's burgeoning startup industry, according to people familiar with the matter.
The kingdom seeks to encourage tech companies to raise money on the exchange's smaller Nomu market instead of doing private funding rounds, the people said asking not to be identified as the information is private.
The Riyadh bourse, also known as Tadawul, doesn't currently offer incentives to list on Nomu, but is telling some startups they could receive regulatory waivers to ease the listing process, the people said. The exchange is expected to continue to encourage firms in other industries to list on Nomu. Tadawul did not immediately respond to requests for comments.
When Nomu launched in 2017, it was intended to offer smaller firms an easier route to going public, with less restrictive listing rules and looser disclosure requirements than on the main market. Jahez International Company for Information Technology, a food-delivery firm, is set to be the first technology company to go through the process. The company hired the local unit of HSBC Holdings Plc as financial adviser for the share sale in May.
Read More: First Saudi Tech Startup That Could Go Public Picks HSBC for IPO
Saudi Arabia is keen to attract more tech investment, encouraging young entrepreneurs to start up their own businesses as a way to help create jobs and diversify the economy. It announced partnerships with firms including Apple Inc. and Google parent Alphabet Inc. to open training academies for software development and coding earlier this year.
SoftBank Group Corp. made its first investment in the kingdom in September, leading a $125 million financing round for customer communication platform Unifonic.
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