The Region's Start-up Scene: Is Funding Still The Biggest Challenge?

The start-up ecosystem has boomed in the region over the last few years, with the recent Amazon deal also signalling the entry of international players. But what are the obstacles to further growth?

- Aarti Nagraj

The recent acquisition of Dubai-based Souq.com by global e-commerce retailer Amazon has changed the perception of the Middle East’s digital start-up ecosystem, with the marketplace gaining the recognition it has long deserved, say experts.

The atmosphere at the recent annual Step Conference in Dubai – a hub for digital startup players – was upbeat, with optimism about the future possibilities and expectations of big things to come.

Speaking above the cacophony of sound at the event, one of the most respected entrepreneurs in the region – the founder of logistics company Aramex and executive chairman of Wamda Capital, Fadi Ghandour – asserts that the acquisition is a “fantastic thing for the region”.

“It’s a confirmation of all the things that we have been doing for the past 15 years. It just takes Amazon to make the statement that there is something happening in the region in the digital space, in e-commerce. And it’s a vote of confidence in the region,” he says.

“It would have been good if Souq had grown bigger and then went public eventually. But unfortunately the market is not developed yet. There are no options in the region,” opines Ghandour.

“But this basically tells everyone and puts everyone on notice – from regulators, to start-ups, to the retail industry to everyone in the business across the region – that big players are paying attention and you also need to pay attention internally for your own start-ups.”

Samer Geissah, vice president for consumer new business and innovation at telecom operator du, agrees that Amazon’s entry into the region is an indication of the maturity in the market when it comes to digital services.