What we learned at Step Dubai 2019

Searching for the region's next unicorn at Step. Image courtesy of Wamda

The seventh Step conference concluded in Dubai on 14 February with some 6000 attendees and 300 startups exhibiting.

The event, which aims to bring together players across the technology startup ecosystem is itself expanding, to Saudi Arabia with its first event scheduled for the end of March this year.

The talks this year were better focused, with good representation from startups from across the Middle East and North Africa (Mena) region. There were several stages hosting panels on topics like starting up, financial technology (fintech), business strategy and digital marketing.

Wamda’s main observation was the quality of the startups in attendance. Founders are older in age, with more experience working for corporates and more sophisticated business models than those in attendance a few years ago.

There was a stronger presence of startups from Oman as well as Saudi Arabia.

One panel session on Saudi Arabia highlighted the growth and rapid development of the country’s startup ecosystem. With one of the largest populations and gross domestic product per capita in the Middle East region, Saudi is an attractive market for almost every company to penetrate, both regionally and globally.

The country’s Vision 2030 economic plan has highlighted entrepreneurship and the small to medium-sized enterprise (SME) sector as a key component for economic diversity and growth. The establishment of the SME governmental authority, Monshaat, has simplified the once tedious and arduous process of setting up a business and obtaining a licence in Saudi Arabia.

Muhammed Mekki, founding partner at Astrolabs referred to the developments in the country as “magical” during the “Make Your Way to the KSA” panel session.

“The new regulations put into place have changed the game,” said Mekki. “It used to take upwards of a year even if you had everything lined up. Now you can get a company set up in a couple of weeks. It went from two years to two weeks. You can get a basic company licence faster [in Saudi Arabia] that in the UAE which is mind-blowing comparing to where it used to be.”

Several startups from Saudi Arabia including Salasa and Fashtory reiterated the growing governmental support for startups in the country, but the ecosystem still presents several challenges, mainly the lack of skills - a sentiment reiterated throughout the festival.

During the “Starving for Innovation” panel, Fouad Fattal, founder of hardware startup Krimston, highlighted the skills gap as one of his main challenges.

“There is a lack of industrial designers, electrical engineers, mechanical engineers. The problem in our region is we don’t have these standards, we can’t find these experts,” he said.

Krimston had to outsource its research and development (R&D) to India and like many other hardware companies, its manufacturing to China – another country that had a dominating presence on stage at Step.

As the biggest foreign direct investor in the Mena region, Chinese companies are beginning to dominate the region’s technology markets in particular. Venture capital firm (VC) MSA Capital had brought a handful of its portfolio companies to introduce them to the Middle East region.

“We are here, we have brought our founders to develop their business in this Mena region,” said Jenny Zeng, founder and partner at MSA Capital.

She also mentioned the possibility of investing in local startups in the region and sharing China’s best practices to help local companies.

“Internet and technology have no borders, they make the world more flat so why not share the best practice?” said Zeng.

And with an ecosystem that has managed to develop rapidly in such a short space of time, producing close to 70 tech unicorns, it’s an experience that Mena, which currently has only one unicorn (Careem) could stand to benefit from.

Wamda Capital has invested in Step

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