Monthly Deep-Dive

The MENA Startup Environment

Startups play a significant role in driving economic growth in emerging economies. They foster a spirit of innovation and create the jobs that push their countries forward. If a country truly wants its startups to be successful, it needs to create the right infrastructure and ecosystem to attract and develop its entrepreneurs. The Middle East has proven to understand this quite well. Across the region, hundreds of startups have launched in the past few years. While most may fail, some have already become unicorns with billion-dollar valuations. The combination of talent, hustle, and support from the government has turned the region into a thriving tech hub.

How Are Governments Helping?

MENA countries understand that government support is vital to nurture the startup ecosystem successfully. In September 2014, the Mohammed bin Rashid Centre for Government Innovation was established to stimulate the culture of innovation within the government sector. This trailblazing move sparked several other initiatives such as:

Free Zones: Established geographical areas where certain business restrictions, taxes, and employment conditions do not apply. For example, the Dubai Multi Commodities Centre (DMCC) offers 0% corporate and personal tax for 50 years.

Khalifa Fund: This organization is a not-for-profit SME development agency set up by the Government of Abu Dhabi to spread freelance culture and encourage business innovation in the UAE. Funding is available for all UAE nationals, and the agency has launched more than 800 awareness campaigns that cater to college students.

Abu Dhabi Investment Office (ADIO): This institution recently launched the Dh535 million Ghadan Ventures Fund. The goal of this fund is to support Abu Dhabi’s growing Venture Capital (VC) and startup ecosystem. The fund’s objective is to ensure local startups have access to more investors with programs designed to increase the availability of capital for Abu Dhabi based startups. They are also allowing new fund managers seeking to establish themselves within this sphere.

4 Startups Thriving in the Middle East

With such abundant support from the government, various startups have already grown to multi-billion dollar corporations. Furthermore, many have managed to attract foreign investment and gain recognition on the same playing field as some of their Silicon Valley counterparts.

Souq: Known as the Amazon of the Middle East, this online marketplace offers a platform for sellers to own a shop online instead of having a physical presence. It is enabling customers in the UAE to access one million products directly on the Souq site and pay via credit card or cash on delivery. In 2017, Amazon acquired the online retailer for $580 million, sunsetting the Souq brand in favor of promoting www.Amazon.ae as an extension of the overall Amazon brand.

Fetchr: This international express, mail delivery, and logistics services company has received significant funding from US investors. The young startup tackles delivery challenges in Arab countries, where streets often lack formal addresses. Customers can download the app and pinpoint their location on a Google map, allowing Fetchr drivers to rely on GPS to deliver packages.

Careem: The ride-sharing behemoth, Uber, has recently acquired its biggest regional rival, Careem, for $3.1billion. This transaction marks the highest-valued tech deal ever to take place in the region. Careem has over 30 million users, over one million drivers and operates in 90 cities across 15 countries. It has also branched out into food and package deliveries, bus services, scheduled rides, and credit transfers — in several instances launching services ahead of Uber.

Dubizzle: Launched in 2005, this has become the leading classifieds website platform for peer-to-peer buying and selling of products. On Dubizzle, goods, skills, and money are exchanged and traded in new ways that don’t require centralized institutions or intermediaries.

With the UAE seeking to diversify its oil-based economies, young and tech-savvy entrepreneurs are starting new businesses and getting investor backing. Ultimately, this type of environment is why Jibrel chose the UAE to fulfill our vision of bringing financial assets on-chain. We are proud to be one of the startups to call the UAE home and are excited about what the future holds!