For the uninitiated, the Kingdom of Bahrain geographically located in the Persian Gulf was served as a trading point between Mesopotamia and the Indus Valley, 5000 years ago. Although, the region’s ancient trade system has sprung many popular theories there is very little known about Bahrain’s early years, according to the US Department of State.
In 1935, Britain’s main military base was established in Bahrain. This is because in the 1830s, the United Kingdom became a protectorate of Bahrain as a result of military conflict with Ottoman Turkey. So to speak, the Kingdom is not recent in trade, war and politics.
A colossal part of the Kingdom’s economy is directly linked to oil and petroleum production amidst other industries. Included is aluminum smelting, iron pelletisation, fertilizer production, Islamic and offshore banking, insurance, ship repairing and tourism. Agriculture consumes only one percent of the economy. But the quick development in the Kingdom’s startup community—seems to invert the popular belief that the United States will always be the central part of startup revolution, ever since the birthing of the great Silicon Valley.
The Seedstars MENA Summit held last December at the Corporate Hub 9 in Manama featured Bahrain’s sparkling ecosystem which stimulates a healthy business climate, somewhat different and away from the cliché. Simon Galpin, the managing director at Bahrain Economic Development Board, said: “The Bahraini ecosystem doesn’t have to be the same as the one in Dubai to become a really important catalyst of economic growth.”
The Summit was attended by more than 150 industry members including entrepreneurs, venture capitalists, students and major stakeholders such as EBD, corporate hub CH9, global accelerator 500 Startups and the Babson Global Center for Entrepreneurial Leadership. It is important to observe Seedstars’ intent to host the Summit in the region, which appears symbolic to Bahrain’s business development configured in a global setup. Perhaps, it was the success from the first edition that cajoled the organisers to host the event in Manama again. A study by Ernst & Young reports: 70% of young Bahrainis are ‘interested in the idea of starting their own business’ in comparison to anyplace in the Gulf.
The Bahrain Economic Development Board in partnership with Fintech consortium announced their plan to build Bahrain Fintech Bay. This was to pronounce the Kingdom as the next financial hub. Really, Bahrain may even countervail the startup trend in the United States because entrepreneurial ideas travel faster than they ever have. And establishing a company in Silicon Valley is expensive. Realising this fact, there is considerable support found in the Kingdom. Whether the support is necessary in the guise of bankrolling, or through an attractive business climate—it is obtainable.
This year’s Pitch@Palace 1.0: The Brightest and Best of Bahrain’s Startups is further proof that Bahrain is cracking the code to have a plan forward in its startup ecosystem. The event in the grace of HRH Prince Salman bin Hamad Al Khalifa, the Crown Prince, Deputy Supreme Commander and First Deputy Prime Minister, and HRH Prince Andrew, Duke of York—concentrated on enabling local entrepreneurs to connect with potential industry forces such as corporates, investors and mentors.
As part of the event, a boot camp was organised for 17 startups to refine their pitching skills. Of the startups, 12 were staged to deliver their skills during a three-minute pitch in the presence of audience (Read: industry experts). This is to explain that Bahrain is formulating new regimes to reorganise startup exposure and disintegrate business complexities.
Last year, the Amazon Web Services zeroed on Bahrain for its first-time establishment in the Middle East. Fortunately, this move has hurled a great deal of opportunities toward cloud services. It is possible to regenerate the success of Silicon Valley and scale the Kingdom’s economy by accumulating the necessary research knowledge and the skilled manpower.
For now, entrepreneurs are seemingly interested in Bahrain because of its precision in favouring small-and-medium-sized enterprises. Bahrain is caricatured as the type of place where startups would want to be and thrive. It consist of a free trade zone area which ties into a very promising start.
The Kingdom has even identified the correlation between bankruptcy and innovation, in particular. For example: the Bankruptcy Law hopes to carve a new approach toward insolvency and business failure.
From The Economist: “The wider lesson is not to stigmatise failure but to tolerate it and learn from it: Europe’s inability to create a rival to Silicon Valley owes much to its tougher bankruptcy laws.” Keeping this in mind, the Kingdom is focused on encouraging entrepreneurs to take risks in business ventures; by fully understanding the legalities laid by the government in good faith. Mohammed Altawash, managing founder of CH9, said: “there would be no reason why [entrepreneurs] would not do it.”
Early this year, the Kingdom launched a venture capital fund worth $100 million for the sake of startups. The fund, also known as Al Waha Fund of Funds is created to secure startups in Bahrain and across the region. Speaking to Arabian Business, Al Rumaihi, chairman of the Bahrain Development Bank, said: “This is very exciting news for the startup ecosystem both here in Bahrain and across the Middle East.
“We know that access to capital is one of the biggest constraints on growth for startups, so this fund will help businesses in Bahrain and across the Middle East to get access to the capital they need to expand.”
That’s the idea behind the fund: to feed the startup scene and welcome other venture capital funds to Bahrain. Areije Al Shakar, Bahrain Development Bank senior vice president and head of business services, said: “We need VCs to come, spend more time and be present here.
“With Al Waha, these VCs will be here a lot more, and they [startups] won’t have to wait for an event or to travel to try to get access to funding or expertise.
“That will further support the growth of our ecosystem. At the same time, we have a lot of startups that are choosing Bahrain because of ease of set-up costs, access to talent and friendly regulatory environment, but they also need that kind of funding and expertise, and Al Waha will hopefully be able to resolve that.”
The Economic Development Board has even predicted a future with India by establishing an office in Mumbai. Using Bahrain as the medium, many startups in parts of India can route their products and services to the Gulf market. The acumen here is to grasp the extended support given by the Economic Development Board and reformat the facilities to best suit early-stage enterprises.