Bahrain leads Mena Islamic fintech startup ecosystem
MANAMA: Bahrain’s fintech startup ecosystem has been ranked the highest in the region and second globally in terms of Islamic finance regulation, according to a global report.
The Central Bank of Bahrain’s regulatory sandbox, the Al Waha Fund of Funds and Waqfe’s digital banking platform have been attributed as the primary strengths of the kingdom’s ecosystem in US-based research firm Startup Genome’s Global Startup Ecosystem Report (GSER) 2020.
Tamkeen chief executive Dr Ebrahim Janahi noted: “Bahrain has within a short period of time established itself as an innovative fintech hub, building on its track record as a financial centre, and adopting enabling regulations. Bahrain is committed to nurturing new talent for this innovative sector.”
Tamkeen’s wage subsidy for Bahraini graduate employment, the kingdom’s liberal tax regime as well as the government’s BD4.3 billion Covid-19 stimulus package were also recognised as some of the top reasons to move a startup to Bahrain.
Compared to last year’s report, Bahrain has shown significant growth in funding and was recognised as one of the top 10 ecosystems in Africa and Middle East for funding.
The report also showed a year-over-year growth of $2,000 (BD755) in a software engineer’s average annual salary from $32,000 (BD12,084) to $34,000 (BD12,839), despite the global average dropping from $58,300 to $42,100.
However, Bahrain’s ecosystem value, a measure capturing the value of startups funded and exited in an ecosystem over two-and-a-half years, dropped significantly from $594 million to $164m. This was despite 2019 being a record-breaking year for startups in the region with investment at an all-time high, up 13pc from the previous year.
This year, on the other hand, may be the year of a “mass extinction event for startups globally,” according to the GSER 2020 due to a reduction in investment capital and drop in demand.
According to a global survey conducted by the firm, four out of every 10 startups have three or fewer months of capital runway, meaning they will fail if unable to raise additional capital and revenue and expenses remain unchanged. On the demand side, 72pc of startups experienced a revenue drop, with the average startup seeing a decline of 32pc.
The report noted that while top ecosystems like Silicon Valley and New York would recover post-Covid because of their talent pools, experience and capital, emerging ecosystems like Bahrain would suffer long-term if talent laid off from startups relocates or makes a permanent switch to working for big corporates.
Source: http://www.gdnonline.com/Details/826244/Bahrain-leads-Mena-Islamic-fintech-startup-ecosystem
