Last month, I attended the inaugural Fluidity Conference in Dubai, designed to foster connections between the startup ecosystems of the GCC and Africa.
At first glance, the two regions may seem worlds apart: one a rentier economy heavily reliant on oil and gas, the other a vast landscape of diverse economies predominantly driven by agriculture.
However, there are similarities, including an abundance of natural resources and a young, tech-savvy population with a desire for digital innovation.
The economic landscapes of the GCC and Africa have undergone a remarkable transformation in recent years, driven by diversification and technological advancement.
Africa’s startup ecosystem, while burdened by infrastructural, regulatory and funding challenges (startups in Africa raised just $3.2 billion in 2024), is among the most dynamic in the world, especially in cities like Lagos, Nairobi and Cape Town.
The continent has produced several unicorns – companies valued at more than $1 billion – through its grassroots, necessity-driven innovation model. According to TechCrunch, there are nine unicorns in Africa, with eight of them operating in the financial technology sector. And while unicorns are by no means a measure of an ecosystem’s success, they are a useful signal.
The most successful startups that have emerged from Africa solve genuine societal or business issues
In contrast, the GCC has been buoyed over the past few years by easier access to capital ($2.3 billion raised in 2024) and robust infrastructure, although regulatory challenges remain. Its approach to innovation has been top-down and vision-led, with governments providing substantial support and establishing initiatives to help startups from launch to exit.
While this strategy has given birth to several success stories, the region can still benefit from valuable insights gained from Africa’s startup journey.
Frugal innovation
While capital available to startups in the GCC still lags behind more mature markets like Europe, the average seed ticket size exceeds $6 million, significantly higher than Africa’s average of $1.6 million.
Limited funding often forces founders to prioritise, building lean, customer-focused businesses. Paradoxically, too much capital can be just as dangerous, fuelling poor financial discipline and ultimately contributing to a startup’s downfall.
Andela, a Lagos-founded talent matching company, initially began with a different venture called Fora, a distance learning platform for African universities. The founders struggled to secure the necessary funding and lacked the political connections to overcome regulatory barriers.
On the verge of failure, they eventually raised a small round that provided just two months’ runway and pivoted the idea to train African software engineers and connect them with global companies, laying the foundation for what has become one of Africa’s biggest success stories.
Problem-driven innovation
One concern frequently raised by investors about the GCC startup ecosystem is the prevalence of “copycat” ventures – business models imported from other markets and adapted for local use.
While stories like local rideshare company Careem provide proof that localisation can lead to scale and exits, the region could benefit from more grassroots involvement in identifying day-to-day problems to solve.
The most successful startups that have emerged from Africa solve genuine societal or business issues and provide practical solutions rather than adopting an idea from another market.
This is why Africa is a global leader in mobile banking and mobile money solutions. Startups such as Flutterwave, OPay and Wave have pioneered financial technology services in a continent that remains largely underbanked.
Scaling
A particularly tough issue facing both Africa and the GCC is the fragmented nature of their respective markets and the complex regulatory systems that present a painful barrier to scaling.
But while most startups in the GCC focus either on their home market or expanding to Saudi Arabia, African startups tend to think regionally from the outset and typically offer low-cost solutions that have mass appeal.
One example is Chipper Cash, a Uganda-founded payments app now valued at more than $2 billion, which rapidly expanded across seven African markets by prioritising product adaptability. GCC startups could think similarly and prioritise scaling beyond one or two markets in the region.
As a new world order is being forged today, it would benefit both regions to build stronger ties with one another.
The GCC offers African startups a gateway to both the European and Asian markets. At the same time, Africa presents a significant opportunity for GCC startups to expand into a fast-growing, underserved consumer base with a great demand for practical, tech-enabled solutions.
Triska Hamid is a writer who focuses on technology and startups in the Middle East and an angel investor
