The Middle East’s Startup Scene: Hub for Technological Innovations
The Middle East startups are growing fast. They are overcoming barriers from cultural differences to resources scarcity with the intentions to tap into a growing local market for technology. Multiple tech startups have successfully made their way into the Middle Eastern geography. GV, formerly Google Ventures, an investor-arm of Google has taken an impressive initiative to provide required funding to startups. Therefore, this region is experiencing a tech boom like never before. Also, crowdfunding is playing an essential role to support this rising tech revolution which is gradually moving ahead among the youth in a form of enthusiasm and further helping in reshaping their lives and cultures in the Middle East.
According to research by MAGNiTT [1], an annual investment of start-ups in the Middle East region is fast reaching to $1 billion industry. The research excludes Israel, which has its own well-established start-up ecosystem. Last year the amount was inflamed more than quadrupled into tech firms, reaching $870 million. However, the vast majority of this $625 million were flooded into just two firms: online retailer Souq; and Careem — the Dubai based rival to Uber which operates in 53 cities across the Middle East, North Africa (MENA) and South Asia.
Amazon’s acquisition of Souq.com was reported to be in the region of $650-$750 million on the global map this year. Souq is one of the Middle East and North Africa region (MENA’s) top online retailer and competes with Amazon in a few key markets. Most of the investment in MENA start-ups go to one country. According to MAGNiTT [1], the United Arab Emirates (UAE) has secured half of all tech funding in the region over the past three years.
UAE is ranked the easiest country in the region in which to run a new business, it is perhaps unsurprising that it attracts the most funds. According to The Economist survey from the World Bank data [2], high levels of bureaucracy combined with lack of government support in many MENA countries create an environment more hostile to start-ups than in many other parts of the world.
However, there are signs that governments are altering their approach in a bid to be more globally competitive. For example, earlier this year Egypt introduced a new bankruptcy bill that abolishes imprisonment for company founders whose businesses fail.
Middle Eastern cities have a long way to go before they can compete with leading global start-up hubs. Not a single Arab nation featured in The Global Startup Genome Ecosystem Report 2017(3), a survey which ranks global cities according to their ability to create environments in which start-ups thrive.
The only city from the wider Middle Eastern region to feature was Tel Aviv, in Israel, which punches far above its weight in the global tech industry. The good news is there is plenty of room for growth, just 8% [4] of businesses in MENA have a digital presence and only 1.5% of MENA’s retail sales are online. The digital market is estimated to add $95 billion in annual GDP by 2020.
Gateway TechnoLabs has many clients in the middle east working on various projects for more than a decade. Our continued participation reflects absolute commitment to adopt smart technologies and solutions and introducing them to a public platform. Various industry expertise such as Auto, Retail, Travel and Logistics, Product Engineering and Startups have led us to cater clienteles in the middle east region. Contact us to know more about our contribution in middle east startups.
