Nomu Parallel Market: Saudi SME Listings, Requirements, Growth Companies, and Investment Opportunity

Nomu: Saudi Arabia’s Growth Company Market

Nomu, the parallel market of the Saudi Exchange, was designed to serve as the Kingdom’s primary listing venue for small and medium enterprises (SMEs) and growth-stage companies that have not yet achieved the scale and maturity required for a main market (Tadawul) listing. Since its launch in February 2017, Nomu has evolved from a nascent concept into a functioning market with dozens of listed companies, meaningful trading activity, and a demonstrated role as an exit pathway for venture-backed startups.

This page provides a comprehensive analysis of the Nomu market — its listing requirements, operational mechanics, listed universe, trading dynamics, migration pathway to the main market, and its evolving significance within the broader Saudi capital markets ecosystem.

Purpose and Design

Nomu was created to address a specific gap in Saudi Arabia’s capital markets infrastructure: the absence of a public listing venue appropriate for smaller, faster-growing companies that do not meet the main market’s listing standards. The main market’s requirements — including minimum profitability history, minimum market capitalization thresholds, and extensive corporate governance obligations — are calibrated for large, established companies and are prohibitively demanding for most SMEs and growth-stage businesses.

Nomu addresses this gap by offering simplified listing requirements, lighter ongoing compliance obligations, and a market structure that accommodates the characteristics of smaller and less-liquid companies. The market serves several interconnected purposes.

Capital Access for Growth Companies. Nomu provides growth-stage companies with access to equity capital from qualified investors, enabling them to fund expansion plans, invest in technology and infrastructure, and pursue strategic objectives that require external capital beyond what the private market can provide.

Exit Pathway for VC Investors. Nomu has emerged as a critical exit pathway for venture capital investors in Saudi startups. The ability to take portfolio companies public on Nomu — even before those companies achieve the scale required for a main market listing — provides VC funds with a liquidity mechanism that was previously unavailable in the Saudi market.

Pipeline for Main Market. Nomu serves as a preparatory stage for companies that aspire to graduate to the main market. The experience of operating as a listed company — with the associated regulatory compliance, investor relations, and governance requirements — prepares Nomu-listed companies for eventual migration to Tadawul’s main market.

Market Development. At a macro level, Nomu contributes to the development of Saudi Arabia’s capital markets by expanding the number of publicly listed companies, increasing the diversity of listed sectors, and broadening the investor base by attracting capital that might otherwise remain in private or informal investment channels.

Listing Requirements

Nomu’s listing requirements are designed to be achievable for growth-stage companies while maintaining sufficient standards to protect investor interests.

Company Requirements. To list on Nomu, a company must be a Saudi joint stock company (or convert to joint stock company status prior to listing), must have been in operation for at least one year (with audited financial statements for that period), must meet minimum capital requirements (the minimum market capitalization at listing is SAR 10 million, significantly lower than the main market’s requirements), and must demonstrate adequate corporate governance arrangements.

Notably, Nomu does not require a profitability history. This is the single most significant difference from the main market’s listing requirements and is the feature that makes Nomu accessible to growth-stage startups that are investing heavily in expansion and have not yet achieved sustained profitability.

Offering Requirements. The Nomu listing process requires a minimum public offering of 20 percent of the company’s shares (compared to 30 percent for the main market), with shares offered to qualified investors through a book-building process. The minimum number of shareholders at listing is 50 qualified investors.

Nominated Advisor. Every Nomu-listed company must appoint a nominated advisor (Nomad) — a CMA-licensed firm that serves as the company’s ongoing advisor and market-maker. The Nomad’s responsibilities include guiding the company through the listing process, providing ongoing advisory support on regulatory compliance and corporate governance, and making a market in the company’s shares (providing continuous bid and ask quotes to support trading liquidity).

Ongoing Obligations. Nomu-listed companies are subject to ongoing disclosure requirements, including the publication of quarterly financial statements, the disclosure of material events, and the filing of annual reports. These obligations are less extensive than those applying to main market-listed companies but are sufficient to provide investors with the information necessary for informed investment decisions.

The Listing Process

The Nomu listing process follows a structured pathway that typically takes three to nine months from initiation to trading commencement.

Phase 1: Preparation (2–4 months). The preparation phase involves the appointment of advisors (Nomad, legal counsel, auditor), the conversion of the company to joint stock company status (if not already structured as such), the preparation of audited financial statements, the development of a prospectus meeting CMA requirements, and the completion of corporate governance arrangements.

Phase 2: CMA Review (1–3 months). The CMA reviews the prospectus and supporting documentation, assessing the adequacy of disclosures, the quality of financial reporting, and the appropriateness of the company’s governance arrangements. The CMA may request additional information or modifications during the review process.

Phase 3: Offering and Allocation (2–4 weeks). Following CMA approval, the company and its Nomad execute the offering process, marketing the offering to qualified investors and conducting a book-building exercise to determine the offer price and allocate shares.

Phase 4: Trading Commencement. Following completion of the offering and settlement of share allocations, trading commences on the Nomu platform. The Nomad begins its market-making activities, providing continuous bid and ask quotes during trading hours.

Listed Universe

Nomu’s listed universe has grown significantly since the market’s 2017 launch, with dozens of companies now trading across diverse sectors.

Sector Distribution. Nomu’s listed companies span technology (including enterprise software, fintech, and digital services), healthcare (including medical services and pharmaceutical companies), industrial (including manufacturing and construction companies), consumer services (including food delivery, retail, and entertainment), and professional services (including consulting, education, and human resources).

The sector diversity of Nomu’s listed universe reflects the breadth of Saudi Arabia’s private-sector economy and provides investors with exposure to segments of the economy that are underrepresented on the main market. Technology companies, in particular, are more prominently represented on Nomu than on the main market, reflecting the younger profile of the technology sector and the appropriateness of Nomu’s lighter listing requirements for growth-stage technology businesses.

Notable Listings. Several Nomu listings have attracted significant attention from the investment community. Jahez, the food delivery platform, was the most prominent venture-backed company to list on Nomu, achieving a valuation that generated meaningful returns for its VC investors. Other notable listings have included technology services companies, healthcare providers, and specialized industrial businesses.

Trading Dynamics

Nomu’s trading dynamics reflect the market’s characteristics — smaller company sizes, restricted investor access, and market-making-dependent liquidity.

Investor Restrictions. Trading on Nomu is restricted to qualified investors, defined as institutional investors (including banks, investment funds, and government entities), companies meeting defined net-asset thresholds, natural persons meeting defined net-worth or investment experience criteria, and clients of CMA-licensed financial advisors who invest through managed accounts. The qualified-investor restriction limits the market’s liquidity relative to the main market but also reduces the risk of uninformed retail speculation in smaller, more volatile securities.

Trading Volumes. Nomu’s daily trading volumes are significantly lower than those on the main market, reflecting the smaller number of listed companies, the restricted investor base, and the lower average market capitalization of listed companies. Daily trading value across all Nomu-listed companies typically ranges from SAR 50–200 million, compared to SAR 5–15 billion on the main market.

Price Volatility. Nomu-listed companies tend to exhibit higher price volatility than main market-listed companies, reflecting the lower liquidity, smaller market capitalizations, and higher growth (and risk) profiles of Nomu-listed companies. The CMA’s price fluctuation limits (which restrict daily price movements to defined percentage bands) apply to Nomu, providing some protection against extreme intraday volatility.

Market-Making. The Nomad market-making obligation is a critical element of Nomu’s liquidity infrastructure. Market-makers provide continuous bid and ask quotes, ensuring that investors can buy and sell shares even during periods of low organic trading activity. The effectiveness of market-making varies across Nomu-listed companies, with more actively-traded companies benefiting from tighter spreads and deeper quote sizes.

Migration to the Main Market

One of Nomu’s most strategically important features is the migration pathway — the process by which Nomu-listed companies can transfer their listing to Tadawul’s main market once they meet the main market’s listing requirements.

Migration Requirements. To migrate from Nomu to the main market, a company must meet the main market’s listing standards, including minimum market capitalization, profitability history, minimum free float percentage, and enhanced corporate governance requirements. The migration process involves CMA review and approval, and the company must prepare and file a new prospectus meeting main market disclosure standards.

Migration Track Record. Several Nomu-listed companies have successfully migrated to the main market, demonstrating the viability of the Nomu-to-Tadawul growth pathway. These migrations have typically been well-received by the market, with migrating companies benefiting from increased trading liquidity, broader investor access (main market trading is open to all investor categories, not just qualified investors), and enhanced visibility.

Strategic Implications. The migration pathway creates a compelling growth narrative for Nomu-listed companies: list on Nomu to access public capital and establish market presence, then migrate to the main market as the company matures. This narrative is attractive to both companies (which benefit from a staged approach to public market participation) and investors (who can invest at the growth stage and benefit from the liquidity improvement associated with main market migration).

Nomu’s Role in the VC Exit Ecosystem

Nomu’s significance for the Saudi venture capital ecosystem extends beyond its function as a listing venue. The market has become a critical component of the Kingdom’s exit infrastructure.

Validation of the Public Market Exit. The successful listing of venture-backed companies on Nomu has demonstrated that the public market exit pathway works in the Saudi context. This validation is important for the VC ecosystem’s credibility — investors need confidence that portfolio companies can achieve public listings before committing capital.

Valuation Benchmarking. Nomu listings provide public market valuations for growth-stage Saudi companies, creating benchmarks that influence private market valuations across the ecosystem. The existence of public comparables makes it easier for VC investors to value private portfolio companies and for founders to negotiate funding rounds.

Liquidity for Early Investors. Nomu listings provide liquidity for early-stage investors (including angels, seed funds, and early VC investors) who may need to realize their positions before the company achieves the scale necessary for a main market listing. This liquidity function is essential for the VC ecosystem’s capital recycling — returns from successful exits are reinvested in new startups, sustaining the flow of capital through the ecosystem.

Comparative Analysis: Nomu vs. International Growth Markets

Nomu’s design and performance can be understood through comparison with similar growth company markets internationally.

AIM (London Stock Exchange). AIM, the London Stock Exchange’s growth company market, is the longest-established and largest parallel market globally, with over 800 listed companies. AIM’s nominated advisor system directly inspired Nomu’s Nomad requirement, and many of AIM’s regulatory features — including simplified listing requirements, market-making obligations, and the migration pathway to the main market — have been adapted for the Saudi context. Nomu’s trajectory mirrors AIM’s early development, with growing listing volumes and improving market quality.

NYSE American (formerly NYSE MKT). NYSE American provides a listing venue for smaller US companies, offering reduced listing standards relative to the main NYSE board. The parallel between NYSE American and Nomu is instructive — both markets serve as stepping stones for companies aspiring to graduate to the main board.

TSX Venture Exchange (Canada). The TSX Venture Exchange provides a particularly relevant comparison, as it serves as a public listing venue for early-stage resource and technology companies in Canada. The TSX-V’s experience demonstrates both the potential and the challenges of growth company markets — the market has produced several successful companies that graduated to the main TSX board but has also experienced periods of low liquidity and pricing inefficiency.

Lessons for Nomu. The international experience suggests several lessons for Nomu’s development. First, growth company markets require sustained institutional commitment — regulatory support, market-making programs, and investor education must be maintained over multiple years to build market credibility. Second, the quality of the Nomad/advisor ecosystem is critical — the effectiveness of nominated advisors in screening listing candidates and maintaining ongoing company quality directly influences market reputation. Third, the migration pathway to the main market is a key value driver — companies and investors value the option to graduate, and successful migrations reinforce the market’s credibility.

Regulatory Developments

The CMA has introduced several regulatory developments designed to enhance Nomu’s attractiveness and functionality. These include the relaxation of certain listing requirements to make the market more accessible, the introduction of market-making incentive programs to improve liquidity, the expansion of the qualified investor definition to broaden the investor base, the introduction of dual-class share structures that allow founders to maintain voting control after listing, and the streamlining of the CMA review process to reduce time-to-listing.

Forward Outlook

Nomu’s forward trajectory is closely tied to the growth of the Saudi SME sector and the maturation of the venture capital ecosystem. The number of listed companies is expected to continue growing as more growth-stage businesses recognize the benefits of public listing and as the VC ecosystem produces an increasing flow of exit-ready companies.

Key developments to watch include the pace of new listings, the volume and quality of migrations to the main market, the development of secondary market liquidity, and the continued evolution of the regulatory framework. Nomu’s success will be measured not just by the number of listed companies but by the market’s ability to serve as a genuine capital formation and exit platform — providing growth companies with the funding they need to scale and providing investors with the liquidity and returns they require.

The potential for Nomu to evolve into a market of significant scale and international interest should not be underestimated. If the current trajectory continues — with listing volumes growing, market-making improving, and migration events demonstrating the pathway to the main market — Nomu could become one of the most important growth company markets in the emerging world within the next five years. The combination of a deep pipeline of listing candidates (driven by the maturation of the Saudi VC ecosystem), institutional support from the CMA and the Saudi Exchange, and the growing sophistication of the qualified investor base creates conditions that are highly favorable for the market’s continued development. Investors who develop expertise in Nomu-listed companies now will be well-positioned to capture the returns that growth company investing can generate in a market that is still in its early stages of institutional adoption.

For the main market, see Tadawul Overview. For IPO activity across both markets, visit IPO Pipeline. For venture capital exit analysis, see Exit Landscape. For foreign investor access, see Foreign Investors. For market reforms, visit Market Reform.