By Hasan Haider / 500 Startups - Image Credit: 500 Startups
SOURCE: 500 Startups - The MENA Ecosystem: The Year Ahead
2017 was a landmark year for the MENA startup ecosystem. That hectic pace of development has continued, even accelerated in the first month of 2018. Having been in the MENA startup space in one form or another since 2007, looking back on what has happened in the past year astonishes me. The rapid pace of development, growth and maturity that took place over the last year is astounding. So, below I wanted to document a few of the main developments I’ve seen from my personal perspective in 2017, which I hope to see continue in 2018.
An increasing government focus on entrepreneurship
TL;DR – Almost every government across the MENA region has woken up and is actively supporting the startup ecosystem.
Governments across the region have fully woken up this year and have started to actually implement projects to help their nascent startup ecosystems grow. In 2017, we saw the emergence of Saudi Arabia as a key player in the regional startup space, with the focus that Crown Prince Mohammed bin Salman has placed on technology and innovation as a pillar of economic growth. Projects from the SME Authority, MiSK, and even the private sector have led to the emergence of a real funding ecosystem, and we hope to see more in the next year with the launch of the SMEA Fund of Funds program.
Bahrain has also launched the Startup Bahrain initiative, an interesting collaboration working both from the government’s perspective and forming a grassroots movement on the ground. This, in addition to a unique fund of funds program and a fintech sandbox environment has led to Bahrain’s emergence as an interesting ecosystem in the GCC.
The UAE has had some significant developments over the last year, with several initiatives not only from Dubai, but also other emirates such as Abu Dhabi, Sharjah and Ras Al Khaimah. Dubai, with its flagship Dubai Future Foundation, has been a driving force in the region, with projects such as the Dubai Future Accelerator program and Area 2071 leading the way in building a nurturing environment for MENA startups in the emirates.
In North Africa, we saw Morocco emerge as a hub not just for MENA, but with a wider focus on Africa. We’re seeing projects such as a fund of funds launched in partnership with the World Bank to develop a venture capital ecosystem in Morocco starting to take shape, and we expect to see a lot more in the next year. Projects in Tunis, such as the Founders Institute and Flat6Labs, backed by BIAT as a driving force in that ecosystem, are starting to develop more founders at a higher quality than before.
In Egypt grassroots private sector led initiatives took the lead in building the ecosystem there, with Rise Up becoming a key integrator and supporter across the ecosystem. We saw the launch of Egypt Ventures, a government backed initiative to support VC funds, accelerator programs and invest in startups, as well as a few new VC funds start to make their first investments, such as Algebra Ventures and Averroes Ventures. A new angel group, Alexandria Angels, was also launched and we hope to see more in the future. The government also launched the Sherketak accelerator program to further support startups in Egypt. The nation has emerged as a true ecosystem, with amazing founders, a healthy funding ecosystem, with active participation from that both the private sector and government sectors entities.
In Jordan, we began to see an increase in momentum, with Oasis500 working on expanding further and the launch of the Beyond Capital fund of funds program and we hope to see more in 2018. With the acquisition of Carriage, the Kuwait-based food delivery startup, Kuwait has now had more $100m+ tech startup exits than any other market in the GCC. The Kuwaiti ecosystem has developed into a strong source of deals and, dedicated, motivated founders, as well as new angel investors actively investing in the region. Qatar was also active in the region through Qatar Foundationand the Qatar Science and Technology Park, with new funds and an enlightened view of now only focusing on Qatar but supporting the development of startups across the MENA region. A new market, Oman, launched the Oman Tech Fund program, a VC fund and Accelerator program, as well as IDO a government and private sector backed VC fund. Oman has always been a great place to visit, and we hope to see more founders emerge from Oman and more founders from the region use it as a base of operations.
What I’d like to see more of however is collaboration and co-operation between the startup and ecosystem project across the region. The issue is that no single market on its own is attractive enough or big enough to emerge. We need to see projects and initiatives that focus on the Arab world and MENA region as a whole, not just country-specific programs.