A mobile app to track school buses, Arabic cooking videos on YouTube and even a portable bidet are finding support from governments in the Gulf as a slide in oil prices forces states to cull cushy public sector jobs and look to entrepreneurs to plug the gap.
Recent $1 billion valuations of local startups Careem, a ride-hailing app, and retailer Souq.com, which was acquired by Amazon in March, have raised interest in the region’s budding entrepreneurship scene. Both companies are headquartered in Dubai, an emirate with futuristic skyscrapers that is working to harness the power of the region’s majority young population with a minister of state for youth affairs who is a mere 22 years old.
Across the Arabian Peninsula, governments — hit hard by a sharp decline in oil prices since 2014 — are competing to attract and keep local entrepreneurs who might provide the region’s next “unicorn,” the industry term for startups that reach a valuation of a billion dollars.
Khaled Talhouni, the managing partner at venture capitalist firm Wamda Capital, says the negative headlines out of the Middle East have tended to overshadow the good, including the growing entrepreneurial spirit.
“There is a huge upswell of entrepreneurial activity happening on the ground, as evidenced by the recent acquisition of Souq by Amazon. And there are hundreds of companies beneath them, following them,” he said.
The Middle East is no Silicon Valley, though. For starters, Talhouni says that unlike the vast single market of the US, local entrepreneurs have to grapple with various customs regulations, laws, consumer preferences and norms across nearly two dozen different Arabic-speaking countries to reach the full Middle Eastern market.
Many of the tech startups are finding success by localizing ideas successfully started abroad, from Amazon to Uber.
YallaParking, for example, helps people find and rent parking spots.
“I think it is getting very competitive. What we tend to see, and people that we know, they’re bringing ideas from other places that are not necessarily here yet,” said cofounder and CEO Craig McDonald, a Scottish national who grew up in Dubai.
“For example YallaParking: There are big companies around the world that do what we do, but no one was doing it here.”
Local government support for startups has mostly sprung out of a need to create jobs.
According to the World Economic Forum, the Middle East and North African region needs to create 75 million jobs by 2020 just to keep employment close to current levels. Failing to do so could lead to slow economic growth and the kind of social unrest brought on by the Arab Spring protests of 2011.
“Unfortunately, the governments in general just recognized the importance of the entrepreneurship ecosystem,” said Mohammed Al-Ruwais, a partner at STC Ventures, a venture capital fund whose anchor investor is the Saudi Telecom Co.
In Saudi Arabia, the Middle East’s biggest economy, half of the population is under 25 and around 70 percent is under 35, representing a rapidly growing labor force.
The Kingdom has launched a plan, called Vision 2030, with goals to shore up its foreign reserves and reform the economy for a new generation of tech-savvy youth. The plan specifically calls for encouraging innovation and improving regulation.
Prince Saud bin Khalid Al-Faisal, who heads the Saudi Arabian General Investment Authority, says part of the reason why the Kingdom sponsors the largest scholarship program on earth, with more than 200,000 students studying across the globe, is to give them a good education and expose them to different ideas.
“We also would like them to get bitten by the entrepreneurship bug, basically, so they can come back and start doing their own thing,” he said.
In the Kingdom, Manal Dhod stands out as a female entrepreneur. She quit a good-paying job in the private sector to set up Dhad Audio, an Arabic audio book publisher. “Instead of waiting for someone to bring a solution for me, I decided to be the change, to bring about a change,” she said.
A Saudi government initiative funded her trip to Dubai and her booth at the recent Step Conference for entrepreneurs in Dubai.
Another Saudi startup showcasing at the conference, also backed by this initiative, centers on an innovative design for a squirt bottle that functions as a portable and compact bidet for Muslim travelers.

Source: Arab News