For many years the Middle East’s startup ecosystem has looked to the West, for inspiration, for investment and to scale. But as geopolitical interests have shifted, so too have the opportunities. China’s Silk and Belt Road initiative opened up the region’s appetite for the East and the latest country to embrace the Middle East is South Korea.
Last week at COMEUP, South Korea’s largest startup festival, a 100-person strong delegation from the UAE led by the Minister of Economy Abdulla bin Touq Al Marri, was present along with an equally large Saudi Arabia delegation. This was the first time the festival had opened up its exhibition to include country pavilions and the UAE and Saudi Arabia were the only two countries invited to participate.
South Korea’s president Yoon Suk Yeol has made his interest in the region very clear. He recently visited Riyadh with a group of South Korea’s most prominent businessmen to discuss cooperation between the two countries, which included the establishment of an automobile assembly plant in the kingdom and the launch of a $160 million joint startup fund backed by Saudi Venture Investment Company (SVC) and Korea Venture Investment Corporation (KVIC).
President Yeol also visited the UAE in January of this year to bolster the strategic partnership between the two countries in the fields of nuclear energy, climate change, health, the space sector, smart agriculture and culture. According to Minister Al Marri’s speech at COMEUP, trade between the two countries currently stands at $30 billion and some 1100 Korean companies have already set up base in the UAE.
While South Korea’s key interest in the region is to increase its arms sales, it also hopes to secure greater trade links. Meanwhile the GCC is hoping to attract South Korean technology and knowledge transfer as it seeks to move its economy away from oil.
“The UAE and Saudi Arabia are really keen to invest not just in startups, but in other opportunities in South Korea. We expect fundraising opportunities [for South Korean startups and VCs] as we have more collaboration,” says Sungjin Choi, CEO of the Korea Startup Forum, the organisers of COMEUP. “The startup ecosystem is booming in the UAE and Saudi Arabia, and those environments are a good place for our startups to expand their business. Now we see [the Middle East] as not just an investment platform, but a global partner to go abroad.”
Speaking on the sidelines of the conference, Abdulmajeed Alanazi, business development manager at Ministry of Investment of Saudi Arabia (MISA) tells Wamda that the two countries are now “building bridges”.
“They [South Korea] are the go-to for innovation,” he says. “We [KSA] have the resources, the talent, the money, we have the R&D centres, so both countries can benefit from each other. Our main vision for Vision 2030 is to diversify the Saudi economy through SMEs and tech startups.”
Saudi Arabia is reaching out to the “whole globe” to share its vision according to Alanazi who says that the aim is to turn the country into “a soft landing place for startups to come to Saudi smoothly and then rocket. South Korean SMEs are starting to expand away from their region to Mena and we want them to utilise Saudi Arabia as a hub for startups to service not only Saudi, but our neighbours too and the rest of the world. This is not just about the Saudi ecosystem, it is about the GCC ecosystem and that is why we're collaborating with everyone, to make the whole region more attractive.”
His sentiments were echoed by representatives of the UAE delegation, which included Alia Abdulla Al Mazrouei, CEO of the Khalifa Fund for Enterprise Development, Mohammad Alblooshi, CEO of DIFC Innovation Hub and Abdulaziz Khalid AlJaziri, deputy CEO and chief operating officer at Dubai Future Foundation.
“We’re a very stable country and city. We’re open to doing business with everyone, everywhere. Our aim is not political, it is business,” says AlJaziri. “We are looking forward to working with Korea to find a way [for startups] to grow into Dubai. We’re a place to scale and a gateway to scale. If you want to expand to the rest of the Middle East and Africa, the UAE is the best place to do it.”
Off-stage, there was a sense among both the UAE and KSA delegation that shifting geopolitical ties around the world, particularly after the two countries joined BRICS and with the outbreak of the war in Gaza, that new partnerships need to be forged. South Korea’s president seems to be keen to strengthen such a partnership, but whether this will spur legions of South Korean startups to establish a base in the region remains to be seen.
“Samsung has done a very good job of exporting Korean technology, but the startups are struggling,” says Han Gust, founding partner of GCCaccelerator, a Dubai-based accelerator helping South Korean startups expand to the Middle East. “Koreans generally focus on the Korean market, they do not often scale outside of the country, but there is now a desire to look beyond. The US is still the first market they look to and then Singapore. The Middle East is now one of the few regions in the world where there is still money so interest has piqued from across the world.”
But Gust has noticed an increasing sense of hesitancy towards the Middle East since the war in Gaza. The perception in Korea that the Middle East is one monolithic region still prevails, however it is this lack of education that his accelerator is hoping to overcome.