As competition between Gulf startup hubs intensifies, Chiara Spina, an Assistant Professor of Entrepreneurship and Family Enterprise at INSEAD, explains why the region’s real story lies not in rivalry, but in how shared structures, capital, and policy choices are shaping very different paths to scale.
What distinguishes the Gulf’s startup hubs today, and where do Riyadh, Dubai, Abu Dhabi, and Doha still converge more than they differ?
Looking at recent data, we can see the Gulf’s startup hubs are more aligned than their competitive positioning suggests. MAGNiTT’s 2024 MENA Venture Investment Report shows that despite a challenging year with regional funding dropping 29 percent to $1.5bn, Saudi Arabia led with $750 million across 178 deals (representing roughly 40 percent of regional funding), while the UAE captured $613 million across 188 deals, maintaining the highest deal volume in the region.
But if we look closer at what’s happening beneath these numbers, something fascinating emerges: fintech remained the most active sector by deal count across all major hubs, while e-commerce and retail led in funding amounts. This is a convergence that partly reflects related priorities for economies building post-oil futures from similar starting conditions. When you examine Saudi Vision 2030, UAE’s Vision 2031, Qatar National Vision 2030, and Abu Dhabi’s Economic Vision 2030 side by side, you see remarkably parallel focus: economic diversification, digital infrastructure, tourism ecosystems, and regional logistics dominance.
What’s particularly interesting — and this speaks to my work with family businesses across the region — is how much of this ecosystem development mirrors the strategic evolution we see in multi-generational enterprises. As leading family businesses are transitioning from hydrocarbon-dependent portfolios to diversified, innovation-driven holdings, these national ecosystems are essentially executing the same playbook at a macro scale. Saudi Arabia’s establishment of the National Center for Family Business reflects exactly this strategic intent: recognizing that family enterprises aren’t just participants in economic transformation but they’re foundational infrastructure for it. When you have institutions explicitly designed to modernize family business governance and capital deployment, you’re essentially building the connective tissue between traditional wealth and new economy innovation.
The competitive rhetoric masks something more collaborative: shared infrastructure development and cross-border capital flows that bind these hubs together more than separate them. The 32 percent increase in active investors despite lower total funding (262 investors in H1 2024) suggests something else too: the market is maturing, with more sophisticated capital searching for quality opportunities rather than indiscriminate deployment. That’s actually a healthy signal.
Many regions succeed at early-stage formation but struggle to produce globally enduring companies. What structural factors most often determine whether an ecosystem makes that leap?
I have consistently observed that a key friction across geographies is the ambition architecture – and this stems from my experience with close to 3,000 entrepreneurs across dozens of geographies. Ecosystems that produce internationally relevant companies institutionalize three capabilities that others struggle to develop:
First, they normalize global orientation from day zero. Founders don’t “go international” as a growth strategy but they build for multiple markets from inception because domestic constraints demand it. From this perspective, the Gulf’s opportunity isn’t replicating Silicon Valley’s scale; it’s leveraging geographic and cultural position as a natural forcing function for regional-then-global product design.
Second, they build “scale expertise networks.” There is access to operational knowledge from people who’ve actually navigated hypergrowth across geographies. Not advisory board names on a website, but former operators from scaled companies actively involved in governance and strategy.
Third (and this is where ecosystems often stumble), institutional patience aligned with realistic timelines. Deep tech, advanced manufacturing, climate solutions: these require long horizons. The ecosystems producing enduring companies build capital structures and performance expectations that tolerate this reality rather than optimizing for quick exits that satisfy quarterly reporting cycles. The important question for Gulf ecosystems isn’t whether they have the capital and talent. It’s whether they’re organizing both toward a genuinely global ambition or regional dominance.
State-backed capital has played a defining role in the Gulf. At what point does this accelerate scale, and when might it constrain it?
State capital becomes constraining when it crowds out private capital formation, insulates founders from market discipline, or creates perverse incentives where startups optimize for subsidy capture rather than customer value creation. There are ecosystems populated by “zombie startups” surviving on grant cycles rather than revenue growth.
The successful approach to accelerate scale is when state-backed capital dominates infrastructure and moonshot projects in the beginning (0–3 years), co-invests in growth stages (3–7 years), and exits to private markets for scale (7+ years). Each phase funds the next generation.
Again, the Gulf region has a large share of family businesses that could play a transformational role in Gulf ecosystems. Multi-generational family offices with patient capital, operational expertise across industries, and long-term thinking could provide exactly the bridge between state capital’s initial investment and global institutional investors’ scale requirements. Many of the region’s most prominent family enterprises are already sitting on diversified portfolios and M&A expertise. They are an underexploited structural advantage.
Talent mobility is increasingly regional and global. What actually influences where founders and senior operators choose to build long-term?
The talent location question has become a sophisticated portfolio calculation across regulatory quality, market access, and institutional support.
Regulatory architecture matters more than founders admit in public settings. Visa pathways, IP protection enforcement, contract law reliability, and foreign ownership restrictions aren’t just “ease of doing business” metrics. They’re key for companies planning multi-jurisdictional operations. The UAE’s golden visa program and Saudi Arabia’s Special Investment Zones signal growing recognition that top talent no longer tolerates regulatory friction as the price of market access.
But Abu Dhabi’s approach via Hub71 and ADIO (Abu Dhabi Investment Office) represents something worth studying carefully. ADIO operates as a comprehensive investor orchestration platform that manages the entire journey from market entry to scale. Concretely, this means: investor care services that handle end-to-end entity establishment and employee mobilization; financial incentives including rebates and capital deployment support through programs like their AED 2 billion Innovation Programme targeting high-growth sectors; non-financial support ranging from subsidized office space to regulatory sandboxes and expedited licensing; and perhaps most valuably, systematic corporate introductions that connect startups to Abu Dhabi’s established business ecosystem and regional markets. This model is starting to show impact: Starzplay, supported by ADIO since 2022, achieved 2.5x revenue growth to over AED 370 million.
