Why Kuwait?
It’s one of the main questions being asked at this week ArabNet conference, the largest digital summit for SMEs and start-ups in the Middle East
The conference itself, which was held in Kuwait for the first time on October 4 and 5, isn’t new to the region however. It has held successful events in start-up hubs like Beirut, Dubai, and even Riyadh. While Kuwait isn’t usually viewed as a start-up haven, it has recently made it clear that it wants to change that image.
“Government support, massive social media penetration, and a real focus on entrepreneurship by the government and private sectors — that’s why we’re here,” explained Omar Christidis, Founder & CEO of ArabNet.
By government support, Christidis is referring to Kuwait’s National Fund for SME Development, which was established in April 2013 with a $7 billion (Dh25.6 billion) budget.
Prior to the 1990s, Kuwait’s economy was based primarily on oil. The emirate sits on approximately 10 per cent of the world’s proven oil reserves and boasts one of the largest sovereign wealth funds in the world.
Oil price drop
But on the back of sharp declines in oil prices and an ever-increasing burden on the government sector to employ nationals, boosting SME growth and developing a robust start-up ecosystem is a natural step towards diversifying the country’s economy.
“While the fund was established in 2013, we officially began operating in 2015,” said Abdul Aziz Al Loughani, vice-chairman of the National Fund. “Since then, we’ve worked with 300 entrepreneurs through a variety of different initiatives that we run, and 80 entrepreneurs have already been approved for funding.”
“Running your own, serious business is a challenge though,” he continued. “We polled entrepreneurs in Kuwait and asked them why they wanted to enter this sector. The majority of our respondents claimed independent wealth creation as a priority, and we want to help them achieve that objective.”
And with the tech industry booming globally, Kuwait’s young population has gravitated to this sector. Aside from its financial capabilities, Kuwait also claims other regional records which help promote the country as a launch pad for SMEs and start-ups. It has a high internet penetration rate of over 90 per cent, and a social media penetration rate of 96 per cent, which is one of the highest globally. Moreover, the value of the nation’s e-commerce industry in 2015 was estimated at over $1.2 billion by Payfort.
Entrepreneurialism
Additionally, Kuwait also made headlines after the acquisition of Talabat.com, the largest online food delivery service in the Middle East. Talabat was acquired by German e-commerce group, Rocket Internet, for about €150 million ($169.6 million).
The ripple effect of Talabat’s exit has witnessed a barrage of new apps and e-commerce businesses, all hoping to be the next big thing, including Boutiqaat, Dizly, PayLe, Moqawalaat, and WINCH. Start-up hubs and accelerators like Sirdab Lab and Brilliant Labs, in addition to co-working spaces like Niu and Reyada also benefit from this surge in entrepreneurialism, and together, they contribute to a vigorous ecosystem.
Adel Al Ghannam, Co-Founder of WINCH app, the first roadside assistance mobile application in Kuwait and the GCC, explained that the country is already at an advantage due to an eager and highly educated youth segment (below 30 years of age) who comprise the majority of the national population.
“For the longest time, there wasn’t much business activity aside from coffee shops and restaurants. That changed in the last three or four years,” Al Ghannam said. “The government seems to be serious about making a change for the better, and I am optimistic about the National Fund and the promises they are making to aspiring Kuwaiti entrepreneurs.”
Opportunities
While the country’s start-up ecosystem is relatively young, it is developing at a rapid pace. The National Fund has started to implement a series of ambitious plans to stimulate the ecosystem and support the growth of SMEs and start-ups — the Fund is offering capital, and lots of it, in addition to world-class opportunities for training and development.
“The interesting thing to me about Kuwait is that there are a lot of start-ups quietly building their businesses here,” said Omar Christidis. “We hear about start-ups from Dubai and Beirut in the media all the time, but we don’t really hear much about Kuwait. And then, all of a sudden, we get these massive success stories that come out of the blue. I expect many more surprises to come from the Kuwaiti entrepreneurial market.”
-Khalid Al-Shammaa is a freelancer based in Kuwait
Factbox: Kuwait’s start up ecosystem is developing rapidly
Boutiqaat
An e-commerce site that allows customers to shop beauty products curated by media celebrities and influencers
Dizly
A social gifting app and registry that allows you to browse through different product categories, share wish lists, and send gifts to your friends
PayLe
A hassle-free, mobile payment app that facilitates the payment process between business owners and customers
Moqawalat
A Kuwait-based online platform that connects customers to a range of contractors, technicians, and suppliers
WINCH app
Kuwait’s first roadside assistance app that connects you to a network of experienced tow-truck drivers