Why The Middle East Fast Becoming More Appealing to Tech Startups

With the world becoming ever more globalised, those seeking a strong environment to base their startups are able to look further than the country that they find themselves in. For tech, North America has long been the default because they’re the biggest and loudest adversaries of their own offering. However, in recent years, the Middle East has sprung up on the radar for all startups, with their advancements in tech making some of the Gulf Cooperation Council (GCC) nations particularly appealing.

In 2020, a record US$959 billion was invested in startups based in the region of the Middle East and North Africa, which was quite the feat. The UAE proved to be the most active startup ecosystem, with 66 percent of the 50 most-funded being based there; Saudi Arabia was the next on the list with 14 percent. All of this activity has made the Middle East a point of interest for startups. Looking beyond these stats, there’s plenty more going on in the most affluent nations of the region to make their lands even more appealing to startups.

It all starts with the world-leading internet connectivity

The internet is such a core component of just about every tech startup that the Middle East’s penetration rate simply can’t be ignored. The global average internet penetration is just over 65 percent, but in the Middle East, it’s over 75 percent. When you home-in on the top startup locations, that number only increases. In Qatar and the UAE, internet penetration is at 99 percent, with it sitting strong at 90 percent in Saudi Arabia. By 2025, there’s also expected to be around 20 million 5G connections across GCC nations.

All of this connectivity has, inevitably, led to an explosion in all things internet-connected: from entertainment to eCommerce. Amazon is presently the top shop in Middle East eCommerce, having acquired Souq back in March 2017 to break into the market. Between 2015 and 2020, GCC eCommerce revenues quadrupled from over US$5 billion to US$21.6 billion. Cash on delivery is also beginning to fade – which looks to carry over beyond 2020 and 2021 – with digital payment methods becoming the method of choice for the majority now.

It’s not all about work and goods online, though, with internet-based entertainment often offering a strong indication of the health of the connections in a region. In the Middle East, the connections are strong enough, and the audience is large enough for online poker sites to localise their poker games. These platforms now offer online poker in Arabic and Persian as well as French and English. There are free poker sites, multi-table options, and bonuses for real money poker sites, meaning that all of the same options are available here.

Tech-forward cities and the Middle East’s pursuit of greatne

When it comes to plans laid out for cities, few places in the world are as exciting, eccentric, and well-backed as in Saudi Arabia and Qatar. So eager to leapfrog the world as leaders in city tech, both nations have laid out projects to put them on the map. In Saudi Arabia, all of the buzz – and scrutiny – surrounds The Line. The smart city in Neom won’t emit any carbon, have cars, or streets, and will be home to one million people. To achieve this, the city will be stacked, with transport on one of its two subterranean levels.  

The 100-mile city that’ll link the Red Sea to the valleys and mountains to the northwest will be a marvel of technology if Saudi Arabia can pull it off. With US$500 billion being earmarked for the project – which is headlining a great Saudi Vision 2030 project to move away from oil and diversify its economy – it certainly has enough backing to come to fruition. The Line will be one of the sought-after smart cities that’ll run on the Internet of Things (IoT), something that a certain legendary cricketer, Sachin Tendulkar has invested in.

In Qatar, the plans aren’t quite as world-shaking as The Line, but the plans to make smart cities and craft the IoT are very much being fulfilled. Smart cities are one of the core pillars of the Qatar National Vision 2030, with over US$4.4 billion being invested into the ICT sector already. The aim is to become one of the most tech-forward nations in the Middle East, but safety is at the heart of smart cities. As a sign of things to come, Lusail City – a brand new city created for the 2022 FIFA World Cup – boasts over US$45 billion in smart city infrastructure.

With so many innovative projects in the works, huge plans for the future, and there being world-leading connectivity, it’s not surprising that tech startups are increasingly looking to the Middle East.