In the heart of the Middle East and North Africa (MENA) region lies Kuwait, a country with a burgeoning reputation as a hub of innovation and technological advancement.
Kuwait's impact on the Gulf Cooperation Council (GCC) is profound, influencing purchases across the region and driving the adoption of new technologies. Hasan Haider, MENA Managing Partner at 500 Startups, a Silicon Valley global fund, attests to Kuwait's significance, stating, "Kuwait is one of the most interesting markets in the Middle East and North Africa region."
Despite its relatively small size, Kuwait has become a thriving startup ecosystem.
At Alkhuzam & Co, we recognise the important role that we and others as advisors can play within this ecosystem. There are entrepreneurs who have the potential and ambition to succeed in a big way but lack the resources and expertise to scale their business.
Our firm in collaboration with the other participants within the ecosystem can help start ups access markets, capital, technologies, and skills that are critical for growth and profitability. But that collaboration needs to begin with an understanding of the path forward for startups.
A path forward: Overcoming challenges and nurturing growth
Kuwaiti startups are beneficiaries of a vibrant startup ecosystem.
A Tech Powerhouse in the Making
Kuwait's prowess in technology is underscored by its high adoption rates of new tech and remarkable revenue per user for tech companies. This small nation has carved a niche for itself as a leader in technology innovation, defying its size to create a lasting impact.
A noteworthy testament to Kuwait's tech-driven success is its prominence in the fintech arena. According to research conducted by the Dubai-based network Magnitt, Kuwait secured 6% of MENA fintech deals and 4% of the total funding. This remarkable achievement highlights the country's commitment to nurturing innovative financial technology solutions.
Catalysing economic growth: The National Fund for SME Development
The evolution of Kuwait's entrepreneurial landscape has been propelled by a series of strategic measures, the most prominent being the establishment of the National Fund for SME Development. Enacted through law number 98 of 2013, this fund serves as a vital catalyst for economic growth, focusing on empowering the youth, combating unemployment, and fostering a robust private sector.
As an independent public corporation with a substantial capital of KD 2 billion, the SME Fund plays a pivotal role in financing up to 80% of the capital for feasible small and medium projects submitted by Kuwaiti citizens. This dynamic initiative not only stimulates economic opportunities but also fosters an inclusive, collaborative, and innovative ecosystem for aspiring entrepreneurs.
Despite the thriving startup ecosystem, it has not been without its challenges.
Stringent regulation has historically posed hurdles for startups aiming to make their mark for instance, the requirement for startups to have registered offices resulted in elevated expenses, adversely affecting the entrepreneurial climate. However, recent changes in Kuwaiti law have introduced more flexibility, allowing specific businesses to operate legally without the necessity of renting an office space.
Foreign investment has also been limited.
Foreign investments have been limited due to legal restrictions on non-citizen establishments and inadequate protection of intellectual property. These limitations have hindered the influx of foreign capital and slowed the pace of innovation. Wherever the ecosystem, an understanding of the path forward for startups allows us to identify the ways we can help them to advance their agendas.
Being a trusted partner to startups
Our core services are accounting, audit, and tax but we have a range of expertise that are complimentary to the startup team. Support is provided through asset and liability analysis, implementation of systems for real time financial insights, development of robust business plans and effective marketing strategies. Empowering startups: Opportunities and success strategies Our client 'Booking App,' a startup offering technological solutions for enhancing online appointments and sales, faced the challenge of establishing its presence in a highly competitive market – with limited financial resources.
Afwaz Alkhuzam, Business Advisor at Alkhuzam & Co: “due to a lack of research and primary data, ‘Booking App’ also struggled with identifying their target audience and developing effective financial planning strategies. This is where our local knowledge proved invaluable as we were able to carry out the necessary research and comprehensive studies, ultimately determining their Unique Selling Points and competitive advantages”. Our firm took things one-step further and provided them with tailored marketing strategies, streamlined workflow structures and efficient operational frameworks.
As a result of working with us, 'Booking App' is currently progressing successfully through the development stage while staying within their financial budgets. They have gained valuable insights into their target audience, allowing them to refine their marketing efforts and optimize resource allocation. Leveraging our strategic guidance, 'Booking App' is on track to establish a strong presence in the market, revolutionizing online appointment systems.
This demonstrates that full client support goes beyond accounting services and there are ways we can support startups in overcoming financial and market challenges, enabling them to navigate the competitive landscape and achieve sustainable growth.
A potentially transformative journey
By embracing a collaborative approach with clients, understanding the path forward for startups, and continuing to grow capabilities and expand its range of services, member firms can contribute to this transformative journey and shape a vibrant future within the startup ecosystem.
26 October 2023