The Gulf has emerged as a dynamic hub for startups, attracting global attention with its investments, government-backed initiatives and an increasing number of venture capital funds. 

Here’s a glance at the region’s early-stage startup ecosystem, highlighting its growth over the past decade and the supportive frameworks fueling entrepreneurial growth.

In 2023, early-stage funding across pre-seed, seed, and Series A rounds surpassed $500 million across the region, a 12-fold increase from 10 years ago. Overall, VC funding in the Gulf rose in 2023 – despite a global decline – with Saudi Arabia overtaking the UAE as the region’s top recipient of VC investments.

Historically, the UAE and Saudi Arabia dominate these investments, with the UAE’s fintech and healthtech startups leading recipients of VC funds. Alma Health’s $10 million Series A exemplifies the momentum, alongside seed success stories like Ejari closing a $14.7 million seed round in October.  

The region now boasts around 60 to 80 active VC funds, including heavyweights like Mubadala Ventures in the UAE and STV in Saudi Arabia. Qatar and Oman are also fostering growth with targeted initiatives such as Qatar’s QBIC and Oman’s Innovation Hub.

Notable Exits and Milestones

Growth opportunities and the burgeoning vigor of the ecosystem can be traced through the increasing number of milestone moments for homegrown startups. 

Careem: Acquired by Uber for $3.1 billion in 2019, becoming a benchmark for regional unicorns.

Souq.com: Amazon’s $580 million acquisition of this e-commerce giant was pivotal in connecting global investors with the region.

Jahez: The Saudi food delivery app made headlines with its $2.4 billion IPO in 2021.

Floward: online flower and gift delivery platform, raised $156 million in a 2023 pre-IPO Series C round led by Aljazira Capital, Rainwater Partners, and STV marking the largest deal in Kuwait in 5-years. 

Government-Backed Initiatives

The GCC owes much of its startup boom to forward-thinking government initiatives. These programs combine entrepreneurship training with access to resources, capital, and world-class expertise among other benefits for founders 

Each country has unique offerings and accelerator programs. Here is a brief list of some of the programs 

Hub71 in Abu Dhabi is a cornerstone of the UAE’s Ghadan 21 program. The technology park provides startups with office space, visa assistance, access to investors, and industry-specific accelerator programming making it a magnet for global tech talent​.  

Dubai Silicon Oasis: This Free Trade Zone supports digital transformation startups, offering 100% foreign ownership and tax incentives​. It also hosts the Dubai Technology Entrepreneur Campus which is home to over a thousand startups from 90 countries.

Public Investment Fund: Saudi Arabia’s PIF, through programs like Aramco’s Wa’ed Ventures – supports the government’s Vision 2030 goals by investing heavily in accelerators and incubators​ and fostering technological innovation.

University-Led Programs:

King Abdullah University of Science and Technology (Saudi Arabia): Known for fostering sustainability-focused ventures.

Khalifa University (UAE): Offers seed funding and mentorship via its innovation center.

Qatar University: Promotes entrepreneurial activity through workshops and funding.

Sultan Qaboos University (Oman): Aligns its programs with the Omani government’s Vision 2040 program to emphasize sustainable development​.

These initiatives combine regulatory easing, financial incentives and innovation hubs to nurture startups. Governments are aggressively rolling out startup visas to attract talent, with the UAE leading the way through its “Golden Visa” program. Saudi Arabia’s Entrepreneurship License simplifies startup formation, further demonstrating the region’s commitment to economic diversification.

Despite remarkable growth, the GCC faces the same challenges as other developing ecosystems. Though there have been overall increases in early-stage VC funds, there is still limited access to growth capital in the region and cross-border expansion can be logistically complicated for startups.

Saudi Arabia’s drive to establish itself as a Middle East hub for international business while shifting its economy from dependence on oil is making progress, according to Investment Minister Khalid Al-Falih.

Speaking at the World Investment Conference in Riyadh on Monday, Al-Falih said more than 550 firms have established regional headquarters in the kingdom, making reference to announcements last week by Citibank and Morgan Stanley on their expanded Saudi offices.

Saudi Arabia introduced a policy this year requiring foreign firms to set up regional hubs in the kingdom as a prerequisite to winning government contracts. Compliance comes with perks, including a 30-year exemption from corporate income tax and access to discounts and support services.

Al-Falih, who is trying to coax more countries to put their money in Saudi Arabia, opened the conference by reporting that foreign direct investment has tripled since 2016, when the kingdom introduced its Vision 2030 economic overhaul plan.

“We are confronted with crosswinds to global investments – driven forward on one hand by the tech revolution, booming stock markets, and the onset of promising monetary policies, while constrained on the other hand by geopolitical instabilities, trade barriers, and talent and skill shortages,” Al-Falih said.

Saudi leaders are amplifying their message that foreign investment is a two-way street.

As the kingdom’s 27th World Investment Conference kicks off today in Riyadh, Cabinet ministers and other top officials are letting other nations know that putting money into the Saudi economy would be especially appreciated after decades of their being on the receiving end.

In a warm-up statement before the conference, Saudi Investment Minister Khalid Al-Falih said: “We look forward to welcoming investment leaders from around the world to forge partnerships that will benefit both the kingdom and global economies.”

Saudi Arabia’s inflows of foreign direct investment barely rose in the first half of the year from the same period in 2023, contributing to delays in the target dates for several projects that are part of the kingdom’s Vision 2030 economic overhaul plan.

Among the conference speakers: Saudi Minister of Economy and Planning Faisal Alibrahim; Prince Sultan bin Khalid, CEO of the Saudi Industrial Development Fund; Egyptian Investment Minister Hassan Khatib; Alastair King, Lord Mayor of London; Christophe Farnaud, EU Ambassador to Saudi Arabia and Nivruti Rai, CEO of Invest India.

Meanwhile, Saudi Arabia’s credit rating was raised by Moody’s Investors Service for the first time, citing the kingdom’s efforts to diversify its economy beyond oil.

And Saudi regulators granted licenses to Citigroup and Morgan Stanley to set up regional headquarters in Saudi Arabia, a prerequisite for getting government contracts in the kingdom.

Bill Gates crisscrossed Abu Dhabi this week as an evangelist for the many applications of AI technology.

The Microsoft founder and philanthropist came to the UAE’s capital to participate in an event showcasing the benefits artificial intelligence can offer farmers and agricultural industries, particularly in Africa.

Together with Mariam Almheiri, head of International Affairs at the UAE Presidential Court, Gates discussed progress on the $200 million partnership formed between the UAE and the Bill & Melinda Gates Foundation at last year’s COP28 climate summit in Dubai. Microsoft is investing $1.5 billion in Abu Dhabi-based G42 to fund data centers and work on AI projects.

Among the projects Gates highlighted at the event on Wednesday was AgriLLM, which focuses on fine-tuning the open-source Falcon large language model to improve agricultural research and development knowledge. AgriLLM aims to synthesize complex agricultural research into accessible, actionable insights for farmers and extension workers.

Gates also taught a 30-minute “masterclass” for students at the CNN Academy Abu Dhabi and several UAE universities, which focused on how AI and other emerging technologies can address global challenges such as disease eradication, climate change, and food security in underserved regions.

Gates met separately with billionaire developer Hussein Sajwani, Chairman of DAMAC Properties, to talk about charitable activities.

Qatar and the UAE are making new efforts to strengthen commercial ties with shared interest in shifting their economies away from dependence on oil and gas.

Khalid Al-Mana, Qatar Development Bank’s Vice President of Enterprise Development, brought executives from 25 companies – including Doha Cables, Delta Corp., Dderve, Q Ceramic and Doha Plastic – on a relation-building trade mission to Dubai this week. Among the group were firms with interests ranging from artificial intelligence and sports technology to construction, steel and food.

In an interview with The Circuit, Al-Mana highlights Qatar’s strategic focus on economic diversification. QDB is making particular efforts to support small and medium-sized businesses, or SMEs, promoting exports and facilitating greater activity by Qatari companies in global markets. The interview has been edited for length and clarity.

How does QDB envision its role evolving in the next decade?
Qatar Development Bank is a government institution that was established in 1997. The purpose of the bank is to promote the private sector and entrepreneurship in the country outside of the oil and gas market. As you know, Qatar is very successful in developing its oil and gas industry and markets worldwide. However, with this comes the challenge of diversification, and it’s the role of the bank to create a more diverse economy.

How does the bank address the finance challenges businesses are facing?

At the bank, we have several arms. One of the arms, of course, is exports and we have a dedicated exports department called Tasdeer. In this department, we look at both developing SMEs through workshops and through our “Go Global” accelerator, which is an award-winning accelerator dedicated to helping local industries export to international markets.

It involves giving them a tool kit for their target markets. So we would try to identify the target market for each SME, and we would develop a tool kit for them to try to penetrate these markets, which goes all the way down to identifying the buyers in these markets so they can deal-make for their exports. This is under the development arm for exports.

In the past, under the finance arm for exports, we were doing only short-term lending through credit insurance and through raw material and bill discounting financing. However, just about a month or two ago, we launched a variety of new products and we have a lot of hopes for these new products to support our private sector and gain more global presence.

What strategies has QDB implemented to enhance Qatar’s global competitiveness?

These products are in line with what leading export credit agencies offer in other countries, such as buyer credit. So we would finance the buyers of Qatari goods and services, and as well, we would provide project finance for Qatari contractors who are seeking to do contracting abroad. Our EPC contractors now have the ability to approach us at Qatar Development Bank and get financing for the projects that they are awarded in foreign countries.

How do you help Qatari companies raise money for international activities?

There are products such as international finance where a Qatari company would like to have a presence in an international market. They would like to either open a branch or extend their businesses in other countries. We now have the ability to finance Qatari companies to expand into international geographies. All these were not available in the past, but currently, they are available with QDB.

Yasir Al-Rumayyan, Governor of Saudi Arabia’s Public Investment Fund, sat with U.S. President-elect Donald Trump and billionaire Elon Musk in ringside seats at the United Fighting Championship’s UFC 309 event on Saturday night in New York’s Madison Square Garden.

Al-Rumayyan, who is also Chairman of Saudi Aramco, the world’s biggest oil company, as well as the PIF-owned LIV Golf tournament and English football club Newcastle, showed up in a photo posted on Musk’s X social media platform, chatting with fellow golf lover Trump while watching the fights.

Al-Rumayyan has been negotiating for the past two years over a proposed merger with the PGA golf tour after luring some of the top professional golfers with paychecks of over $200 million. The two sides, along with Europe’s DP World Tour, reached a framework merger agreement in June 2023 that has yet to be finalized.

The former President’s Trump National Golf Club in Bedminister, N.J., hosted LIV Golf tournaments in 2022 and 2023.

Deep in the Abu Dhabi desert this weekend, foreign ministers, senior government officials and an array of policy experts are gathering behind closed doors for one of the world’s most exclusive diplomatic get-togethers.

The three-day Sir Bani Yas Forum, hosted by UAE Minister of Foreign Affairs Sheikh Abdullah bin Zayed, opened Friday with speeches, panel talks and high-level shmoozing opportunities galore.

The affair, which focuses on the most pressing political, economic and security issues, is conducted under so-called Chatham House rules that prevent public attribution of remarks to allow for more free-spirited expression.

While the media is kept at bay and the Sir Bani Yas website stops dead at the login page, a few participants have made their presence known through reports on their national news agencies.

The most prominent of them is Russian Foreign Minister Sergei Lavrov, who announced his landing in Abu Dhabi on Thursday with a report on TASS. Also disclosing their participation were Foreign Minister Constantinos Kombos of Cyprus and Mohammad Ishaq Dar, Deputy Prime Minister and Foreign Minister of Pakistan.

The top-tier confab is named for Sir Bani Yas Island in western Abu Dhabi, home to a bird sanctuary, nature reserve and several significant archeological sites. The name originates from the Bani Yas tribe, who first inhabited the land that became the emirate of Abu Dhabi.

After electrifying investors across the Gulf who wrestled to buy its shares, mega-grocery chain Lulu Retail Holdings’ IPO landed today with a thud.

Touted as the UAE’s biggest initial stock sale this year, priced at the top of its marketed range and oversubscribed within an hour of its offering, Lulu fell as much as 2.5% in trading on the Abu Dhabi Securities Exchange. The IPO looked like such a sure bet that Lulu boosted the size of the offering to 30% from its initial plan for a 25% sale.

Lulu’s slow start comes weeks after a $2 billion energy-sector IPO by Oman’s OQ Exploration & Production dropped 8% in its debut, Bloomberg reports. Dubai-based supermarket chain Spinneys, which raised $374 million in May, also had an undramatic debut and continues to trade around the offer price. Both those deals were oversubscribed too.

The Middle East is in the midst of an IPO boom that’s seen firms raise around $10 billion this year. Coming soon is an initial share sale from Talabat, the Middle East unit of Berlin-based Delivery Hero, that could reach a value higher than its parent.

Since its founding in 1973, Lulu has grown into one of the Middle East’s largest hypermarket chains and reported a profit of $192 million last year. It serves over half a million shoppers a day from 240 stores in six countries across the Gulf, and employs more than 50,000 people. 

The IPO boosted India-born founder Yusuff Ali’s net worth to $7.1 billion, cementing his position as the UAE’s second-richest private individual, according to the Bloomberg Billionaires Index.