A center for innovation and investment

• E-commerce: With a growing internet user base, e-commerce startups offer online marketplaces that connect buyers and sellers, as well as on-demand delivery services such as Deliveroo and Talabat for groceries and Namshi and Ounass for fashion. This sector is benefiting from increasing internet penetration and growing preference for online shopping.

• Logistics and Delivery: This sector addresses the challenge of efficient delivery across the GCC region. Startups offer last-mile delivery solutions, on-demand warehousing, and supply chain management platforms that optimize efficiency and reduce costs. Examples include UAE-Saudi cloud-based supply chain and e-commerce enablement platform Omniful and Saudi-based Software as a Service (SaaS) company Fastcoo.

• Entertainment & Media: Startups offer video streaming platforms with original and regional content, music streaming services with personalized playlists and artist discovery features, and innovative solutions for content creation and distribution. The most successful example is Anghami, the first legal music streaming platform and digital distribution company in the Arab world. Another example is Nabd; an Arabic news aggregator headquartered in Dubai.

• Real Estate: Tech startups are transforming the real estate sector with online real estate listings with detailed descriptions, VR (virtual reality) tours that enable remote viewing, and proptech (real estate technology) like Property Finder and Bayut.

Successful case studies

The potential for significant returns in the GCC’s tech startup scene is evident in landmark exits like Souq.com, a Dubai-based e-commerce retailer that was acquired by Amazon in 2017 for a reported $580 million. This acquisition was a significant milestone for the region’s technology industry. Another notable example is Careem, the Middle Eastern ride-hailing giant that was acquired by Uber for $3.1 billion in 2019. These successful exits demonstrate the value proposition of GCC technology startups and underscore investors’ growing confidence in the region’s innovation and growth potential.

GCC governments are actively promoting a supportive ecosystem for technology startups:

• Visionary Initiatives: Strategic plans such as the UAE National Innovation Strategy and Saudi Arabia’s Vision 2030 promote collaboration between startups, investors, businesses and government entities.

• Infrastructure and regulations: Investments will be made in developing infrastructure such as high-speed internet, co-working spaces and creating a regulatory environment that encourages innovation.

• Funding and Incentives: Incubators, accelerators, and funding programs are established to provide financial resources and mentorship to promising startups.

• Access to Capital: Angel Investors, Venture Capitalists, Banks and Family Offices: Angel investors, venture capitalists, banks and family offices are a critical force driving the growth of technology startups in the Gulf Cooperation Council. They play a diverse role that goes beyond simply providing financial resources. This highlights the critical role each type of investor plays in supporting the startup ecosystem in the GCC by providing both financial resources and strategic value:

• Angel Investors: These individuals or groups provide not only capital but also mentorship and industry contacts. Angel investors are willing to invest in start-ups at a very early stage, providing the initial impetus needed to implement ideas.

• Banks: Traditional banks in the Gulf Cooperation Council offer important financing options through loans and credit lines, contributing significantly to the financial stability of startups. Banks are able to provide structured capital that is often cheaper than equity financing.

• Family Offices: Family offices in the Gulf Cooperation Council manage significant private assets and invest in promising start-ups in various sectors. Family offices are flexible and have a long-term investment horizon, so startups often have more time to achieve profitability without facing the pressure of short-term returns.

3. Strategic Advantages

The GCC’s unique location offers several advantages that make it an attractive destination for both entrepreneurs and investors in the tech startup scene:

• Geographic Hub: Located at the intersection of continents, the GCC offers startups a strategic location to access huge markets in Asia, Africa and Europe. This allows them to scale their business quickly and efficiently by tapping into diverse customer bases.

• Skilled Professionals: The GCC is witnessing an increase in young, skilled professionals with expertise in various areas relevant to technology startups. This readily available talent pool allows entrepreneurs to build strong teams and access the skills needed to develop innovative products and services.

• Early Adopters: There are a large number of young people in the region who are knowledgeable about technology and are early adopters of new trends. This creates fertile ground for technology startups to test their ideas, collect valuable user feedback, and iterate quickly.

A thriving ecosystem for innovation

The GCC is undergoing a remarkable transformation and is emerging as a dynamic hub for technology startups. Driven by a focus on technology-driven sectors, a supportive government ecosystem and strategic advantages such as market access and a skilled talent pool, the region is attracting a new generation of entrepreneurs and investors.