Why Riyadh is ‘best city for startups in the Middle East’

According to data gathered by Sortlist, startups in MENA raised $323.7m in 66 separate deals in June of this year, with investors in the US being the most active foreign investors.

Giving cities a score out of 10 based on a matrix of its own creation Sortlist scored Riyadh top of the list at 7.92.

The Sortlist report said: “Riyadh, Saudi Arabia, proves to be the best MENA city for startups.

“Average broadband speeds of 94.64 Mbps are higher than most, and literacy rates are standing at 95%. Riyadh also has one of the highest happiness ratings in MENA and an electricity cost of just 4.2 p/kWh”.

The superfast broadband speeds available in Dubai make it stand out as an attractive proposition for startups in the Middle East.

“Dubai has a massive internet download speed of 189.07 Mbps, larger than any city in the UK and MENA on this list,” said the Sortlist report.

“Perfect for hybrid working and working with international clients and employees, fast internet like this is sure to boost efficiency in those crucial early stages of a business.

Kuwait City took third spot, with cheap electricity and high literacy rates seen as key factors.

“Kuwait has an exceptional literacy rate of 96% and a very low electricity price of just 2.5 p/kWh. Pairing this with a very decent broadband speed of 149.37 Mbps suggests that Kuwait offers the perfect environment for a budding business, however, the office rent is a little high at $370 per month,” said Sortlist.

Last place in the list was Tripoli, Libya. Although it benefits from relatively cheap electricity and office rental costs, extremely unreliable Internet speeds and relatively unhappy workers on the Sortlist happiness score make it unsuitable for a startup in the Middle East.

Dubai’s ambition to be a key place for startups in the Middle East has seen many entrepreneurs launch in the city. The UAE was dubbed the future of startups in the Middle East when Toronto firm ConvertX moved its headquarters to Dubai in response to the UAE’s coronavirus response and the city’s ‘unique’ opportunities.

UAE-based fintech startup YAP is in talks with a clutch of investors – global as well as from the Middle East venture capital (VC) funds – for raising $20 million funding.

The investment is for mainly financing the digital banking venture’s expansion plans in Africa and South Asia.

Marwan Hachem, founder and Group chief executive officer of YAP, confirmed to Arabian Business that the venture is currently tapping investors for another round of capital raising.