Why has Kuwait’s startup ecosystem fallen behind?

Why has Kuwait’s startup ecosystem fallen behind?

At one point, Kuwait was at the forefront of the startup ecosystem in the GCC, producing some of the region’s most robust companies and exits, most notably food delivery platform Talabat, which was acquired for $170 million by Delivery Hero. Founders in the country enjoyed strong government backing, with access to capital and talent, but in the past few years, Kuwait’s ecosystem has waned, lagging behind its more active neighbours. 

The entire Middle East and North Africa (Mena) region was transformed after the Covid-19 pandemic in 2020, which elevated the tech and startup scene to a new level. VC investment grew across the board, yet in Kuwait, the pandemic’s impact was less pronounced. Of the $3 billion raised by startups in Mena in 2022, Kuwait’s share of that was just $25.7 million, down from $41.7 million in 2021. Meanwhile, its more comparable neighbours like Qatar and Bahrain raised $36.7 million and $124.7 million, respectively last year. So far this year, Kuwaiti startups have only managed to raise a little over $5 million, compared to $13 million raised by Bahraini startups and $14 million raised by Qatari startups. 

Limited access to capital

Kuwait’s economy still depends largely on its oil exports. Diversifying its economy