Startups in the MENA region have witnessed a lot of attraction recently. Multiple of them have been internationally recognized and acquired by major companies reflecting a robust startup ecosystem in the region. This startup ecosystem holds a lot of importance for a region that has been on the rungs of employability of its youth and is seeking to shift from an oil-based economy.
In such a situation, startups become the knight in shining armor for not only the youth but also determine the future of the region through its economic standing. Thus, a lot of importance has been laid, and trends have been followed to tap into the relevance of these startups in the market.
In this blog KiwiTech aims to provide you insights on what are the new trends followed by startups in the MENA region.
Regional Startups over International Businesses
Any international business cannot address issues relevant to a region with multiple geographical and demographic pain points. In such a situation, regional startups enjoy the advantage of knowing the ground level issues with innovative solutions.
Startups are seen as a catalyst for innovation. The digitalization of the MENA region owes a lot to these innovative startups that generally have young people with a high level of digital connectivity at their topmost level.
Incumbent Businesses to Seek Partnerships with Regional Startups
Innovation as its motive boosts startups’ chances of getting taken over by Incumbent Businesses. It further strengthens the startup ecosystem in the region by combining monetary resources with new and innovative ideas. It provides dual benefits to the investors to fulfill the socio-economic responsibility and tap into new, fresh ideas.
“World Economic Forum’s Regional Business Council (RBC), which includes some of the leading businesses in the region, are pledging to allocate 10% of their annual procurement budget to SMEs, startups and entrepreneurs by 2020.”
MENA-based startups are also witnessing international interest, especially those aiming to provide solutions to Pandemic brought problems. The sectors benefiting most from the high investment are Fintech, eCommerce and healthcare, with a strong founding team with proven problem-solving capabilities.
In addition to this, the return of in-person events such as GITEX and Expo 2020 will accelerate program activity. With the reignition of founders’ cross border activity to scale up, the growth trajectory of the startup ecosystem is looking highly encouraging, according to Philip Bahoshy, CEO and founder of MAGNiTT.
Re-Prioritization of Industries Due to Covid-19
Although, along with the world, the MENA region witnessed a halt in its operations due to Covid-19 restrictions. Yet, it gave birth to newer platforms and infrastructure for startups through digital transformation. Multiple startups rose to heights just in the Pandemic itself through the re-prioritization of industries according to their relevance in the COVID-19 crisis.
The region’s government has put in conscious efforts to provide the right environment and infrastructure for startups in the region to flourish. It reduced the cost of setting up a startup; it supported the ability to scale and incentivized access to capital. These structural changes in the policy provided guidance, connectivity and funding facilities to the startups in their pre-seed and seed stages.
Government-run accelerator Falak invested in early-stage startups and was established to give the startup industry in the country a much needed shot in the arm.
Startups’ progress in the MENA region has been progressive for over a decade. Despite the Covid 19 obstruction, the region has had multiple flourishing startups that have emerged as unicorns, showcasing how promising these startups are.
Taking these trends further, KiwiTech has successfully helped __ startups in the MENA region scale and add to the ever-growing startup economy in the region. If you’re a MENA-based entrepreneur looking to learn more about how KiwiTech supports and accelerates businesses in the region, feel free to contact us. We would love to tell you more!