Challenges for start-ups in the Arab States
A 2013 survey of the challenges facing start-ups in the
Arab States that covered more than 700 entrepreneurs,
nearly half in technology (including software development and services, e-commerce and online services,
gaming, and telecoms and mobile services) yielded numerous findings.
Most entrepreneurs were male who started their
companies in their late 20s or early 30s, held university degrees, had studied or worked abroad and partnered with co-founders. The average age of surveyed
entrepreneurs was 32.5, and most companies were less
than five years old. Over 75 percent of the companies
had male founders; only 23 percent of entrepreneurs
were female. Nearly all entrepreneurs surveyed had at
least a bachelor’s degree. In the next one or two years,
70 percent planned to open new offices, either in new
countries or in countries where they already operated.
Many hoped to expand into the United Arab Emirates
(39 percent) and Saudi Arabia (38 percent). In terms of
financing, nearly all entrepreneurs had used their personal savings or support from family or friends, while
24 percent benefited from angel investment—financial
backing from an affluent individual. A notable share
reported not receiving support from commercial banks.
A quarter of the entrepreneurs indicated that obtaining investment was a challenge. A larger pool
of capital, comprising different types and sources of
funding, could improve access to finance. Many companies pointed to challenges in finding partners to help
expansion abroad, as well as general costs and legal
hurdles. Female representation was low in all start-ups.
This lack of inclusion suggests that enabling diversity
in education and gender could help expand the pool of
innovation.