5 Things You Need to Know about the Arab Startup Scene

Entrepreneurship hasn’t always been the first word that comes to mind when thinking about the Middle East. In recent years, however, this has begun to change.

According to Go Gulf, 64 percent of adults in the MENA region would prefer to own their own businesses than to work for someone else. In searching for more independence, career autonomy, and wages, an increasing number of professionals from across the Arab region are turning to entrepreneurship.

As a result, the Middle East has entered into a startup renaissance, with new and exciting businesses bursting onto the scene each year. Here are a few things that you need to know about the Arab startup scene as it continues to flourish:


  1. The region’s young people are leading the charge.

The entrepreneurial boom in the Middle East is thanks, in no small part, to the vast number of youths bringing their own startups to life. Roughly 60 percent of the region’s population is comprised of individuals under the age of 30. Half of this population are between the ages of 15 and 29, a demographic that includes more than 100 million individuals.


In the face of economic stagnation and a lack of job growth across the region, these Arab youths have been affected by rising unemployment levels, which rose to 30 percent in 2017. As a result, Middle Eastern youth have taken matters into their own hands by pursuing entrepreneurship as a career option.

Some of the region’s youngest entrepreneurs are responsible for such thriving startups as Coterique, an e-commerce platform, and Sarwa, which helps locals delve into the world of investments. What’s more, young Arab entrepreneurs are helping create more job opportunities for other young people just like them.


  1. Mobile technology is playing a huge role in its success.

Arab youth aren’t the only major factor influencing the growth off the Middle Eastern startup scene. Over the last several years, technology has become an increasingly central facet of daily life for communities across the region.

In 2015, the region had 238 million smartphones, an adoption rate of only 39 percent. By 2020, however, this number will nearly double to 467 million, bringing adoption to 65 percent overall.

Innovations such as mobile technology are helping shape the Arab startup ecosystem. They allow companies to develop new mobile applications and other online services for the public at large.

According to Bloomberg, tech startups in the Middle East raised an impressive $3 billion in funding in 2016 alone. Mobile devices continue to incorporate even more previously unconnected communities. As a result, the region’s tech-based startups will only reach larger volumes of customers and see more growth.


  1. The Middle East is home to several unicorns.

The Middle East is home to thousands of startups, some of which have made incredibly profitable exits. Only a few, however, have earned one of the most coveted statuses that a startup can achieve: unicorn. Referencing the rarity and somewhat magical nature of the mythical creature of the same name, unicorns are businesses that have reached a value of at least $1 billion.

Careem is one such startup: it achieved this coveted status within just five years of its inception. Headquartered in the UAE, Careem is the region’s premier ride-booking app. Now a major competitor to the likes of Uber, the startup employs over 1.2 million drivers called “Captains,” who provide on-demand rides to users in more than a dozen countries worldwide.

Other local unicorns include IronSource, a provider of software distribution services, and Infinidat, an enterprise storage services platform.


  1. The Arab startup scene has already made headlines around the globe.

The Arab startup scene has caught the attention of global audiences. Numerous acquisitions, exits, and partnerships have made headlines in recent years. In 2017, another one of the region’s unicorns, Souq.com, became a big name worldwide after U.S.-based e-commerce platform, Amazon, acquired it for $580 million.

Established in 2005, the startup quickly emerged into biggest provider of e-commerce services in the Arab region. Under Amazon, Souq.com has sought to improve its business by connecting with the firm’s existing network of buyers and sellers.


Talabat, a meal ordering platform, was involved in another one of the biggest acquisitions in the Middle East. The startup sold for $170 million to Germany’s Rocket Internet group in 2015, surpassing Yahoo’s acquisition of Maktoob as the most expensive exit at the time.

More recently, BECO Capital of the UAE partnered with global software firm Microsoft to provide additional support to the Arab startup scene. BECO, which supports budding startups with early-stage funding, is working with Microsoft to connect Arab tech startups with investors and improve their economic impact in the local region.


  1. It boasts some of the top startup hubs in the world.

The UAE has one of the most prolific startups ecosystems in the Middle East. Not only is it home to a diverse population of entrepreneurship-hungry expats, but it is also perfectly positioned to fuel business growth across the other Gulf nations.

In addition, the UAE is known as the easiest place to conduct business in the Arab region. After securing the 21st spot in 2018, the country rose to 11th place on the World Bank 2019 Ease of Doing Business ranking, When paired with the fact that it has the greatest number of investors in the Middle East, it’s no wonder that the UAE has become a global hub of entrepreneurship.

Egypt has also become a major startup hub, particularly in the realm of technology. Opportunities abound for entrepreneurs who want to tap into the emerging internet economy and mobile tech sector.

The local startup scene is maturing, with several high-profile startups already on the market. In 2018, for example, Vezeeta took in a record-breaking $12 million for its digital health services. Egypt’s startup ecosystem will only continue to thrive as more talented locals bring their most innovative ideas to the table.