A look at the fragmented startup market in the Middle East

No two countries and markets in the Middle East are the same – the consumers in the United Arab Emirates are different from those in the Saudi Arabia, the ones in Bahrain are different from the ones in Oman, and so on. This makes it extremely difficult for startups to scale locally, as the majority of the countries do not have the population to support the exponential growth of a scale-up itself. Scale-ups are forced to look at other countries and try to penetrate those markets, which is not always easy.

Khalid Talhouni, managing partner at Wamda Capital, stated, “The MENA region is not the easiest place to operate. If you want to scale a business, particularly a consumer business, you have to operate in multiple markets at the same time. You can’t be a UAE-only business. You have to be in Saudi as well and operate simultaneously on the commercial side - so selling your products and service across these markets. You also have to arbitrage talent across the Levant or Egypt, where there is a lot of talent at a much more cost effective price.”

Learn more about the diverse landscape in the Middle East, and what that means for early-stage businesses, here.