Bahrain among region’s top start-up ecosystems

Bahrain’s start-up ecosystem is valued at over $100mln with more than $50mln in early stage funding

  
Young entrepreneurs work at the Amman-based Oasis 500, a seed investment firm which finances start-up firms in the region's information technology sector, November 2, 2011. Across the Middle East and North Africa, the Arab Spring uprisings have hurt many businessmen. Economies have slowed sharply as political uncertainty deters investment, new governments focus on trying to restore social stability instead of reforming economic policy, and labour unrest disrupts production and drives up costs. Oasis 500's Executive Chairman Usama Fayyad said governments had become more careful about appearing even-handed towards companies, even in countries that have been relatively untouched by the Arab Spring. In the long term, though, a cleaner, fairer business environment could, even more than other economic reforms such as deregulation and fiscal policy changes, help to solve one of the Arab world's biggest problems: job creation. A more level playing field could spur the growth of similar small and medium-sized firms. Picture taken November 2, 2011. To match Mideast Money ARAB-BUSINESS/SPRING REUTERS/Muhammad Hamed

Young entrepreneurs work at the Amman-based Oasis 500, a seed investment firm which finances start-up firms in the region's information technology sector, November 2, 2011. Across the Middle East and North Africa, the Arab Spring uprisings have hurt many businessmen. Economies have slowed sharply as political uncertainty deters investment, new governments focus on trying to restore social stability instead of reforming economic policy, and labour unrest disrupts production and drives up costs. Oasis 500's Executive Chairman Usama Fayyad said governments had become more careful about appearing even-handed towards companies, even in countries that have been relatively untouched by the Arab Spring. In the long term, though, a cleaner, fairer business environment could, even more than other economic reforms such as deregulation and fiscal policy changes, help to solve one of the Arab world's biggest problems: job creation. A more level playing field could spur the growth of similar small and medium-sized firms. Picture taken November 2, 2011. To match Mideast Money ARAB-BUSINESS/SPRING REUTERS/Muhammad Hamed

REUTERS/Muhammad Hamed

MANAMA: Bahrain’s start-up ecosystem has emerged as a leading regional challenger, second only to Amman in Jordan, according to new research.

The Global Startup Ecosystem Report 2021 (GSER2021) by Startup Genome and the Global Entrepreneurship Network notes that affordable talent and funding have made the kingdom one of the top 10 in the region in terms of technical talent and among the top 15 ‘Bang for Buck’ ecosystems – which measures the average amount of venture capital of start-ups working in the technology sector.

According to the GSER2021, which was released yesterday during London Tech Week 2021, Bahrain’s start-up ecosystem is valued at over $100m with more than $50m in early stage funding.

Counting Bahrain among the top 15 in the Mena region in terms of the ability to generate and retain talent, the report also includes the country among the top 15 in assessing the size and performance of ecosystems based on the accumulated tech start-up value created from exits and funding.

The nation’s young, highly-skilled workforce with the best human capital development in the Mena region is a key strength, notes the report.

Over 70 per cent of tech industry employees are local Bahrainis, 60pc are in the 18-24 age range, 90pc are fluent in both English and Arabic, and 89pc hold either a bachelor’s or a master’s degree, while 44pc hold a professional certification.

The kingdom has also been included in the top 15 knowledge ecosystems in Mena, which is a measure of innovation through research and patent activity.

Commenting, Tamkeen chief executive Husain Rajab said: “The report reflects Bahrain’s prominent ranking as a supportive start-up ecosystem. An attractive business environment, a highly skilled workforce, a low cost of living and a diversified economy are some of the key reasons mentioned in it, which should make start-ups want to move to Bahrain.

“The fintech sector is, also, highlighted for its density of talent, support resources, and startup activity, promoting and facilitating a fast-growing ecosystem in line with the kingdom’s promising vision for a sustainable economic development,” he added.

Bahrain has no taxes on income, sales, capital gains, or estates, with the exception of some businesses that operate in the oil and gas sector and the kingdom makes it extremely convenient to establish a business and allows 100pc foreign ownership of business assets, the GSER2021 noted.

It is the only Gulf state to permit equal business freedoms across all sectors throughout the country.

As for the region, the report noted Mena’s vibrant startup ecosystem is a function of its status among the world’s most digitally connected regions.

“Around 88pc of Mena’s population goes online daily, the World Economic Forum reports, and 94pc owns a smartphone. Digital consumption is similarly high in some individual countries,” the GSER2021 said.

The report quoted start-up data platform Magnitt in noting that as of May 2021, capital deployed in Mena had doubled year-on-year.

Based on analysis of more than 3 million start-ups, the GSER2021 presents a detailed perspective on how the top 140 entrepreneurial ecosystems in the world stack up.

Despite a turbulent year for many, the top-five global start-up ecosystems maintain their reign at the top, with Silicon Valley in the first position, followed by New York City and London tied for second place for the second year in a row.

The global start-up economy is worth over $3.8 trillion in ecosystem value, more than the individual GDP of most G7 economies.

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