The number of startups in the MENA region are increasing, according to ‘Statista’. This explains why there are 5,531 startups in the UAE, Egypt and Saudi Arabia alone, according to ‘Magnitt’.
The United Arab Emirates alone has the highest number of startups out of all the countries in the MENA region.
Take ‘Careem’ Company as an example, which is considered as the first MENA unicorn (a term that means a company surpassed a billion-dollar evaluation), is a UAE-based startup, which was acquired by Uber for a mind-blowing 3.1 billion dollars.
So, that means that startups have ecosystems. To be more accurate, every country has its own startups’ ecosystem, and you need to know your country’s ecosystem very well, in order to network, expand your business more efficiently and find investors for your startup.
What is a startup ecosystem?
Startup ecosystem refers to the formation that happens between people and startups in any stage or type of startup in a location, whether it is being physical or virtual, and their interaction with each other as a system to create more startups.
Looking at the MENA region, we can see some developed ecosystems like the one in the UAE. However, we also can see how Saudi Arabia’s startups’ ecosystem trying to rival the UAE.
Saudi Arabia’s Ecosystem
One of the fastest-growing startups’ ecosystems in the MENA region is in Saudi Arabia. We’re seeing an increase in the number of startups in Saudi Arabia, investors and deals.
Moreover, the Saudi government is pushing more funds to help the startups’ ecosystem, which will lead us to talk about some of the government initiatives there, and statistics that would benefit any Saudi startup.
Top Funded Startups in Saudi Arabia
In this section we’re going to talk about the top funded startups in Saudi Arabia in 2020, according to ‘Wamda’.
Jahez, the Riyadh-based food delivery startup, raised $36 million from ‘Impact 46’ in a ‘Series A funding’.
‘Nana’ is an online grocery startup founded in 2016, which managed to raise $18 million to expand its services to cover more regions in the Kingdom.
Wahed is an Islamic FinTech startup, which helps its customers invest their money easily without the fear of ‘Reeba’, as the Saudi Startup specializes in halal focused asset ownership. They have raised $20.5 million in 2020.
Noon Academy is an EdTech startup which raised $13 million in 2020.
Latest Accelerator programs launched in Saudi Arabia
The Kingdom is investing in multiple sectors in the startups’ ecosystem, including FinTech. In collaboration with ‘Flat6Labs’, they’ve launched ‘Fintech accelerator’; a 3 month program designed to help Fintech startups develop and scale their solution-driven businesses.
Now let’s talk about how the government is helping startups in Saudi Arabia get through the pandemic, as they launched multiple initiatives to help ease COVID-19 impact on startups.
Last April, SAMA launched a couple of initiatives in order to support business continuity, enterprise growth during the current period and to counter the effects of the spread of the coronavirus.
- The Ministry of Finance
The Ministry of Finance (MoF) launched its initiatives to help individuals, SMEs and investors to mitigate the impact of the coronavirus.
The National Development Fund (NDF) announced programs amounting to 22 billion riyals, in support of the citizens and the private sector.
‘Esterdad’ initiative was designed in cooperation with the Ministry of Finance as part of the private sector stimulus plan, to facilitate the entry of new enterprises into the labor market. Also, to enhance opportunities for their continuity and support during the first three years of their operations.
- The Local Content and Government Procurement Authority
The Local Content and Government Procurement Authority launched more than one initiative to support the local product and local production startups in Saudi Arabia.
GOSI launched ‘SANED’ to help ease the impact of the coronavirus on the private sector and its employees.
- The Ministry of Municipal and Rural Affairs
The Ministry of Municipal and Rural Affairs has postponed receiving any payments from businesses for 90 days.
- Economic Cities and Special Zones Authority (ECZA)
Economic Cities and Special Zones Authority (ECZA) did the same as The Ministry of Municipal and Rural Affairs, as it has postponed its payments but hasn’t set a deadline.
- The Ministry of Hajj and Umrah
The ministry has launched its own initiatives to help support SMEs.
The Saudi Authority for Industrial Cities and Technology Zones, just like the Ministry of Municipal and Rural Affairs, has postponed its payments for 90 days, while also providing a 25% discount on services and rents.
Based on a number of metrics, The Kingdom of Saudi Arabia has been ranked in the 88th place out of 202 in the year 2020, as a robust startups’ ecosystem.
We can say with confidence, that the Kingdom is evolving fast as more startups are launching and many government initiatives are helping them during the current pandemic.
Moreover, and since Saudi Arabia is growing steadily with the aim to rival the UAE, do you think it will be the startup hub in the MENA region anytime soon?
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