The coronavirus pandemic has had a negative impact on the startup ecosystem across the Middle East and North Africa, a recent research report showed.
The Ministers of Finance of the Kingdom of Saudi Arabia, the United Arab Emirates, the State of Kuwait…12 | the publication reaches you by | Bahrain News
The survey was conducted by Wamda, the regional ecosystem enabler, and Arabnet, the event, insights, and innovation program organizer. Findings are based on data collected from 247 startup founders, with the UAE representing the largest share (24.7 percent) followed by Lebanon, Saudi Arabia and Egypt.
For e-commerce startups, 54.2 percent reported having a cash runway of less than six months, while a third of logistics startups said they have between one and two months of runway left. For healthtech startups, 43.8 percent of respondents said they have less than two months of runways.
According to the report, founders have started putting aside talks of growth and expansion in favor of prioritising product development and adjusting business models to sustain operations while the pandemic persists.
Two thirds are now working remotely, while 8.6 percent said they introduced salary cuts of 50 percent or more and 15.9 percent said they reduced their number of employees.
“The survival factor for over half of the startups in the region is getting new investment or grants. Financial aid whether in the form of investment, loans or bill waiver are necessary to support the region’s startup ecosystem,” the report said.
As for funding rounds, 49.6 percent said that their funding round has been affected by the pandemic, while 29.5 percent said that they are not looking to fundraise, 11 percent said they will still receive funding as planned and 9.8 percent reported that their funding environment has improved.
Writing by Gerard Aoun
Do you have information you want to reach our readers?