Bahrain ranks among top five MENA start-up ecosystems
In Blog Bahrain
Bahrain was ranked among the world’s top five fastest-growing start-up ecosystems with fewer than 1,000 start-ups, according to the 2020 Global Startup Ecosystem Report (GSER), which also placed Bahrain among the top 10 Middle East and North Africa (MENA) Ecosystems for Funding in 2020.
The report, by Startup Genome and the Global Entrepreneurship Network, said Bahrain created USD164 million in ecosystem value over the last two-and-a-half years, and cited wage subsidies and a liberal tax regime as reasons a start-up should move to Bahrain. It also praised Bahrain’s strength in FinTech and noted the success of its stimulus programme in response to COVID-19.
It placed Bahrain among the world’s top five fastest-growing ecosystems in the ‘activation’ phase – describing locations with fewer than 1,000 active start-ups. In the wider region, Cairo was also in the top five, with Dubai making it into the Top 20 emerging ecosystems. It also found a dramatic improvement in funding availability in Bahrain, awarding the country nine out of 10 (up eight points from last year) – an achievement that puts Bahrain in the Top 10 Africa & MENA countries for early-stage funding.
Labour Fund Tamkeen engaged Startup Genome to benchmark Bahrain’s performance against more than 250 ecosystems globally in the report. Tamkeen chief executive Dr Ebrahim Janahi said: “Building on its track record as a successful financial centre, Bahrain has quickly established itself as an innovative fintech hub, home to regulations designed to enable and encourage entrepreneurship.
“During the current Covid-19 crisis, Bahrain has acted quickly to support adversely affected enterprises from the economic repercussions caused by the global spread of the pandemic,” he added. This is evident with the launch of the Business Continuity Support Programme from Tamkeen, which comes as part of the government’s economic and financial stimulus package to support both citizens and businesses in the kingdom.
“With a budget of USD106m, the programme has already helped small and micro enterprises, providing them with financial grants ranging between USD5,438 and USD31,830 depending on the size of the enterprise over a period of three months,” Dr Janahi added.
The GSER claims to be the world’s most comprehensive and authoritative research on start-ups with 250 ecosystems studied, a ranking of the top 30 and 10 runner-up global ecosystems, and a top 100 ranking of emerging ecosystems. The report tracks performance, funding, experience and talent, market research, connectedness and knowledge.
Bahrain and the UAE were also ranked among the world’s top 100 start-up destinations, as well as the top two most-preferred ecosystems for start-ups in the Gulf region, according to new study by Zurich-based research company StartupBlink. Globally, the UAE came in at 43, while Bahrain jumped 20 places to 75.
The study said the UAE was recognised for the potential of its Arab-speaking market and close involvement of the government in the local startup ecosystem. Other major gainers in the Arab world included Jordan, which jumped six places to 67, and Lebanon which climbed eight places to 74. Egypt (81st), Morocco (83rd), Qatar (84th), Saudi Arabia (88th) and Kuwait (92nd) also made the top 100.
“As an entrepreneur, location will greatly influence the chances your start-up will succeed,” said Eli David, chief executive of StartupBlink. “Good start-up ecosystems are fundamental … they create jobs, boost the economy, increase tax revenue, improve quality of life and urban innovation and attract talent,” he added.
StartupBlink, which publishes start-up ecosystem rankings every year, calculates the score for each country based on various factors such as the business environment, number of start-ups and quality of products. It gathers data from more than 50,000 respondents working as venture capitalists, founders and employees.
The report praised the Arab nations for their consistent efforts to attract global talent and create a conducive ecosystem required for the successful scaling of businesses.
“Dubai is now the undisputed tech leader city in the Arab world, becoming a popular relocation destination among Arab entrepreneurs from all over the Middle East,” the report said. “Considering the size of the Arabic-speaking market, the potential is high … continued reforms by the government can provide much needed legal and financial infrastructure, with laws favouring entrepreneurs and a banking system that supports innovation.”
Bahrain, it said, has the potential to rank even higher, as it enjoys a “collaborative start-up community, is tax-free for most private companies and has established a framework of legal and support systems” for entrepreneurs. Initiatives including Startup Bahrain, Tamkeen and Bahrain FinTech Bay were also highlighted – as well as favorable tax conditions and recent record investment highs.
The research also mentioned several Bahrain-based startups such as Rain, the first licensed cryptocurrency platform, and Skiplino – a cloud-based queue management system that allows companies to intelligently manage social distancing during the COVID-19 pandemic.