At the end of last year, the Middle East's startup scene was on the up and up. The region's ride-hailing service, Careem, was acquired by Uber in a $3.1bn deal[1], and the wider industry witnessed record levels of engagement.
Research from MAGNiTT, a startup data platform, revealed that $704m was invested across 564 different startups across the region in 2019[2]. "To put it into perspective, 2009 saw $15m of funding in five venture deals," the company noted.
"The story remains success breeding success," Christopher Schroeder[3], co-founder Next Billion Ventures and author of Startup Rising: The Entrepreneurial Revolution Remaking the Middle East[4], told ZDNet. "The massive mobile penetration [is] attracting investment from within the region," Schroeder observed[5], and that investment is coupled "with more global tech companies exploring ways to enter".
SEE: Guide to Becoming a Digital Transformation Champion[6] (TechRepublic Premium)
However, that momentum was, of course, pre-COVID. With the pandemic impacting economies, businesses and lives around the world, what does it mean for the Middle East?
Mixed fortunes for startups
Initial prospects for many startups in the region didn't look good.
A report from Wamda and Arabnet in May, featuring findings from 247 startup founders across the region[7], highlighted that nearly half, 49.4%, of those surveyed had a cash runway of six months or less. That dropped to one to two months for logistics startups.
Moreover, 71% of startups commented on the negative impact of the pandemic on their business – with startups in e-grocery, edtech and fintech tending to buck the trend