How Bahrain is growing into a startup haven

April 19, 2018

SMEs account for 90 percent of Bahrain’s enterprises (Image via Wikepedia).

 

In 2017, Bahrain ranked second in the MENA in terms of Ease of Doing Business, and very good reasons have endorsed this ranking. The number of startups in the country has grown at a compound annual growth rate of almost 50 percent over the past three years, as per the data of the Bahrain Economic Board (EDB). The Kingdom offers entrepreneurs multiple benefits, as well as an attractive regulatory environment. So, what would hold back an ecosystem with similar components from turning into a startups haven?

 

An inviting market

 

Khalid Al Rumaihi (Image via EDB).

 

“We recognize that technological change is disrupting industries and unlocking innovation and entrepreneurship. We choose to see this transformation as a real opportunity for change and are committed to doing everything we can to increase dynamism and competition in our markets,” explained H.E. Khalid Al Rumaihi, chief executive of Bahrain Economic Development Board (EDB), when asked about the drivers behind forging Bahrain to become a regional tech hub. SMEs already account for 90 percent of Bahrain’s enterprises and 30 percent of its GDP.  The aim? To see new ideas tested and developed in Bahrain, then rolled out across the region and globally.

 

Multiple factors attract local or regional startup to establish their businesses there. The country’s small population, that does not exceed 1.5 million people, acts a testbed for startups and an easy-to-consult market validator for products and services.

 

GetBaqala is an Indian startups that's based in Bahrain (Image via GetBaqala).

 

Get Baqala, an Indian grocery delivery app, was among the startups that found their way to Bahrain. Amjad Puliyali, cofounder and CEO, told Wamda that Bahrain is a fantastic launchpad for startups. “It’s a small, but very proactive ecosystem, allowing access to the right decision makers both in the industry and the government.” He said that they started GetBaqala with a hyperlocal model [where they picked up and delivered from their partner grocery stores in specific communities], which allowed them to refine their customer interface. But ultimately, this model couldn’t get the right unit economics and margins, so they pivoted to an inventory-driven model.  [sourcing directly from brands and sellers and stocking it]. He explained that they are currently buying from 50+ FMCG brands / suppliers - including Unilever, P&G, Pepsi, Coca Cola, Mondelez, etcetera.. and some of their local distributor partnerships include, Aujan Group, Abu Dawood Al Saffar, BMMI, Ahmadi industries. “We also work with local farmers in Bahrain through AlGalia Farms, Central Market in Bahrain, and Farmers Market Bahrain,” he said.  

 

Puliyali explained that though he was well acquainted with the region, having lived for decades in the UAE, the EDB provided a one-stop-shop for everything they needed to set up, “which really gave Bahrain the edge.”

 

GetBaqala was incubated with Bahrain Development Bank’s Rowad program, where it got access to initial working capital through the Seedfuel program and access to the Global Accelerator Network (GAN), where it got lots of perks like free Amazon Web Services Credits, discounts on number of services such as WeWork, and a coworking space which they will utilize for their Bangalore development office. “We also gained invaluable support from Tamkeen, the Bahrain Labor Fund, which helped us acquire local talent by providing salary and training support. They helped us hire freshers from the University of Bahrain and Bahrain Polytechnic and to upskill them fast.” He added: “We’ve grown quite quickly to a team of 30 with five full-time engineers,” Puliyali explained.

 

Yallabety, a home cooking sharing network, is another startup based in Bahrain. Ahmed Kamal, founder and CEO, told Wamda that Bahrain is the right country for any startup to launch mainly because of the ease of setting up processes and procedures. “The fact that it is a small market makes it very easy to know who are the entities that could provide you with the kind of support needed, in every possible way.” According to him, Bahrain today acts as a big host to many startups within the GCC region whether initiated from it or easily expanded in.

 

 

 

Kamal, who has also been living in the GCC for a while, felt the ease of doing business in the country. According to him, Bahrain’s market is a melting pot for old and new businesses that are all willing and hungry to grow further. “These companies understand the need to collaborate and support one another to reach better heights. This makes Bahrain a very good space inclusive of a