MANAMA — Bahrain, a dynamic nation in the GCC, is emerging as a hub for startups engaged in technological innovation. Several technology sectors are experiencing significant growth, becoming increasingly attractive for startups. Key sectors include fintech, digital transformation, climate tech, and health tech. Establishing a presence in these sectors in Bahrain offers numerous opportunities, but also presents challenges. These young businesses need to be equipped with innovative concepts and essential entrepreneurial skills to succeed.
The assets of Bahrain’s banking sector reached US$224 billion as of December 2022, amounting to 6.6 times its GDP, according to the Central Bank of Bahrain (CBB). The banking sector has demonstrated stability, enjoying a capital adequacy ratio (CAR) of 19.5 percent.
In this landscape, the rise of fintech is evolving. The CBB has been proactive in fostering an encouraging environment for fintech startups, offering regulatory support and programs. By the end of 2022, the CBB’s regulatory sandbox included 20 companies. However, without professional guidance, businesses may face challenges navigating regulations and securing partnerships with established institutions. To thrive in this competitive sector, startups should focus on innovative solutions and technologies, such as blockchain-based financial services, mobile payments, and automated advisors.
The demand for digital transformation services has surged across industries in Bahrain, driven by a push towards modernization and efficiency. A key opportunity lies in offering tailored solutions for specific industries, such as e-commerce platforms, cloud services, and data analytics. Startups in this sector may confront the challenge of encouraging traditional businesses to fully embrace digital technologies. Entrepreneurs can gain a competitive edge by emphasizing the cost savings, improved efficiency, and enhanced customer experiences digital transformation can provide.
Bahrain is also increasingly recognizing the importance of addressing climate change in business, creating a fertile environment for climate tech startups. These startups can focus on renewable energy solutions, waste management, and smart city initiatives to contribute to Bahrain’s sustainability goals.
Raising awareness about environmental issues and securing funding for sustainable projects present potential challenges in the climate sector. The IMF suggests that Bahrain could facilitate its climate transition by gradually phasing out energy subsidies and investing more in renewable energy. This approach would help Bahrain manage its climate transition without creating additional fiscal needs or hindering growth.
Collaboration with government initiatives and leveraging international partnerships can help startups overcome these challenges and enable businesses to have an increasingly positive environmental impact.
Another rapidly digitizing sector in Bahrain is healthcare, offering opportunities for health tech startups. Entrepreneurs can explore telemedicine platforms, health monitoring devices, and AI-driven diagnostics to address emerging healthcare needs. However, startups must navigate the complex healthcare regulatory landscape, build trust in digital health solutions, and ensure data privacy. Forming partnerships with healthcare providers, insurers, and government agencies is crucial for the success of health tech startups in Bahrain.
Operating in Bahrain’s tech landscape requires a blend of innovative thinking, adaptability, and strong entrepreneurial skills. Entrepreneurs need to stay current with emerging technologies, understand market trends, and be prepared for regulatory changes. Building a robust network within the startup ecosystem, engaging with mentors, and seeking partnerships with established businesses can provide invaluable support.
Incubators and accelerators play a vital role in nurturing startups in Bahrain. The country has seen the establishment of entities providing mentorship, workspace, and access to a network of investors. Sovereign Bahrain offers an incubator service, assisting companies with everything from company formation and bank account opening to office space.
The growing technology sectors in Bahrain offer immense opportunities for startups willing to effectively navigate the challenges. Sectors such as fintech, digital transformation, climate tech, and health tech represent promising arenas for innovation and growth.
Entrepreneurs equipped with the right skills, a robust business strategy, and the ability to forge meaningful collaborations are well-positioned to succeed in Bahrain’s evolving tech landscape and beyond. As the ecosystem continues to mature, the potential for startups to significantly impact the region’s economy and society is substantial.
Nabil Khoury is Managing Director of Sovereign Bahrain.
The opinions expressed are those of the author and may not reflect the editorial policy or an official position held by TRENDS.