Startups in Saudi and UAE are dodging the effects of a global economic slowdown. According to the Global Startup Ecosystem Report 2023 (GSER), experts said investor risk appetite in the US and EU has shrunk. This has in turn affected funding for startups.
This came after the World Bank published a report stating the world’s economy will slow down to a 2.1 percent slump. This is due mainly to countries imposing higher interest rates.
However, startups in Saudi and UAE continue to do well, despite the gloomy global outlook.
The GSER report shows Dubai is the second top performing ecosystem in the region with a market value of $21 bn and an early-stage funding of $1.3 bn. Meanwhile, Riyadh was third with an ecosystem value of $10 bn. Cairo and Abu Dhabi were fourth and fifth on the list. They had an SME ecosystem value of $8 bn and $4 bn, respectively.
Millions of startups
GSER is a comprehensive study of the current state of startup ecosystems worldwide. It is based on extensive research and data analysis from 3.5 million startups across 290 global ecosystems.
GCC startups, the report noted, remains insulated from the global economic slowdown. This is largely due to the region’s strong government backing and a favorable ecosystem.
Read: UAE’s Hub71, WEMIX empowering MENA blockchain startups
Startup-friendly UAE
For instance, the UAE has created a startup-friendly regulatory framework and implemented accelerator programs, incubators and innovation schemes. These include the Hamdan Innovation Incubator which helps innovative startup founders.
Other support mechanisms include in the UAE include the Dubai SME, which provides support, information and outreach to small and medium enterprises (SMEs).
Noteworthy, too, is the Dubai Economic Agenda D33, a multi-pronged program announced in January 2023. The undertaking involves the launch of a scaling-up program for 30 companies designed to nurture them to become global unicorns. It also seeks to develop 400 SMEs, as well as increase private sector investments.
Startups in Saudi in full swing
The startup journey in Saudi Arabia, meanwhile, has gone full swing with the Vision 2030 economic blueprint. Saudi Arabia has been witnessing an increase in the number of young entrepreneurs owing to initiatives like the Meras platform, which provides everything that an entrepreneur needs to set up a business in one day.
It has population of 35 mn and has the biggest total startup funding in the Gulf with investments of $446 mn in the first half of 2023.
Second to Saudi Arabia is Egypt with $305 mn; UAE is third at $239 mn, according to a study by Magnitt, a go-to site for verified venture capital information covering the Middle East, Africa, Pakistan, and Turkey.
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