The Middle East is no more being recognized just for its vast oil reserves, startups have added another feather to its hat. And they are doing it right since their upcoming startup ecosystem is indeed the talk of the town.
So much so that in the first quarter of 2020 (in spite of Covid-19) MENA’s startups saw a 2% increase in investment over the first quarter of 2019. The first quarter saw an investment of $277 in 108 startups.
Startup ecosystems consist of such factors that work to promote and nurture startups to come up. So, people, organizations, and other startups in that ecosystem supports startups.
Every element works to create new startups and facilitate their growth. It proves to be a very nurturing environment.
Numbers and Investors validate the work being done in the Middle East
The Middle East is one such ecosystem that is garnering a lot of attention. In a research conducted by MAGNiTT, it was found that last year nearly 3000 startups were launched here and more than $870 million was the investment made in these startups.
From governments’ help to international investors Middle East has been showered with a lot of support. The help that entrepreneurs and startups get is not only limited to financial aid but there are also technical support and policy reforms to accelerate growth.
The investors and founders also have praises for the way this startup ecosystem is coming up.
Dany Farah, Ceo Beco Capital believes,“ The MENA ecosystem has matured enough to the point where we can start investing the appropriate amounts in early-stage tech companies to drive successful returns as per our global peers. ”
What facilitates the Startup Ecosystem in the Middle East?
Factors like a large youth population with high internet penetration, lack of existing monopoly, large levels of smartphone usage, a cultural shift towards entrepreneurship, facilitate the flourishing startup ecosystem that exists in the middle east.
The regional government’s need to shift the economies’ focus to something other than their natural resources has also played a role in the rise of this ecosystem.
What are some Middle East Startups to look out for?
- Ekar – Ekar is the first of its kind, carshare application in the Middle East. You can choose the flexible payment option to pay on based on the minutes, hour, week, or month, as is suitable for your needs.
- Cofe – Cofe helps customers to make their coffee ordering experience quicker and more efficient. Their vendors include both independent brands and franchise stores, thus providing a wide range of options to their customers.
- MaxAB – MaxAB is an e-commerce platform that caters to the grocery and wholesale food sector. In the previous year, they have claimed to raise $6.2 million in their seed funding round.
- Dokkan Afkar – Dokkan Afkar is an e-commerce platform that provides a variety of product categories. It aims to make available to its consumer’s creative products that could be used to better express themselves.
Is there room for improvement?
Governments and investors have shifted their attention towards the upliftment of startups in the middle east.
Schemes like extended visa policies for entrepreneurs, government accelerator programs (e.g. Ghadan 21), investment markets, all help to develop the startup ecosystem.
The large amounts of investment helps to further strengthen this claim. Statistics suggest during 2019 the average funding in the MENA (Middle East & North Africa) region was around $1.9 million.
However, there is still scope for improvement and making the ecosystem more nurturing. The regulatory framework is not flexible and this comes in the way of entrepreneurs and startups reaching their true potential.
Since entrepreneurship is still in its initial growth stage, another thing we see missing is a good connected entrepreneurs network. Although this situation is continuously improving.
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Last year, the Middle East saw an all-time high investment in their startups. Together the startups were able to raise a huge sum of $704 million. And going forward there’s optimism for these high numbers to follow.
Hence, both as an investor or a startup Middle East should be on your radar. Alcor comes with 20+ years of experience.
Our office in Kuwait ensures you get to be part of the dynamic growth in the middle east by providing you with seed capital and other investment banking services. We are the largest capital venture firm in Kuwait, come grow with us!