Why Start-Ups Are Getting the Much Needed Interest in the Middle East

Why Start-Ups Are Getting the Much Needed Interest in the Middle East

15 Dec 2020

Middle East regions, especially Dubai, Abu Dhabi and the countries of the Persian Gulf are increasingly becoming a beachhead for start-ups to set up their businesses. The ease of doing businesses, cosmopolitan atmosphere, access to the large global market and non-existent or very nominal taxes are the reasons why start-ups are favouring these destinations. 

Here are a few more reasons why start-ups are getting the much needed interest in the Middle East: 

  1. Established Businesses Are Collaborating With Start-Ups 

Rapid innovation in various sectors has led many establishments to collaborate with bright upcoming start-ups to leverage their talent and propel their brand. It is also seen as a way to support the local communities. For instance, companies in Beirut are providing office space, sales support and mentorship to promising start-ups. 

Fadi Ghandour, Executive Chairman of Wamda Capital of a leading venture-capital fund, says, “Big companies aren't innovating anymore. Innovation happens at the start-up level. They're going to create wealth and they're going to create jobs. Suddenly, you will have a 21st-century economy.”

Businesses in Sharjah have signed MoUs with several small and medium-sized businesses. To support the budding start-ups, the members of the World Economic Forum’s Regional Council have decided to allocate 10% of their annual procurement budget to SMEs, start-ups and entrepreneurs. 

2. Thriving Entrepreneurship Ecosystem 

Business leaders around the world are appreciative of the encouraging business-friendly attitude and policies of the governments of the GCC nations. The Tunisian government recently passed a 20-measure law to support the development and globalization of Tunisian start-ups. 

A similar act is expected to shape up and encourage a thriving, entrepreneurship ecosystem in Egypt. In Bahrain, the government has formed “Startup Bahrain” initiative to provide entrepreneurs with all the tools and funding to scale up their businesses.

In another development, the Oman government has started involving the start-ups in the decision-making processes to understand the needs of the start-ups and create an empowering ecosystem. Kuwait has come with a great initiative of allocating $7Bn to support entrepreneurs and SMEs. 

3. Booming E-Commerce Space 

E-commerce companies have been growing at a rate no one would have predicted. This has led to intense competition in the regional and international players, particularly the past year, due to the COVID-19 impact. The increase in the e-commerce business has triggered the growth of related sectors like logistics and payment systems. 

Some instead of starting a new e-retail venture consider acquiring or merging with the regional players. A recent example of it would be Amazon – Souq.com deal. Goldman Sachs has cited this $80 million deal as the biggest ever in the Arab world. The deal also included the acquisition of Payfort, the popular online payment gateway in the region. 

Building Destinies and Future

The Middle East is a very diverse region and has enormous unleashed potential. Flexible government policies, investment aid to rigorously planned business models and the availability of immense talent pool are major factors responsible for positioning ME as a force to be reckoned with in the start-up sphere. ME entrepreneurs are ready to take the step, think creatively and drive businesses in a manner that enable greater likelihood of business success and generate higher profits and revenues.

With the start-up game all set to grow even more in the Middle East, the next few years are going to be a game-changer for all countries in the ME region.

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