More than 70 per cent of startups based in the Middle East and North Africa have witnessed a negative impact on their business as a result of the Covid-19 pandemic, while 50 per cent have had their latest funding round disrupted.

From supply chain disruption to travel restrictions and payment collection hurdles, multiple areas of business have been impacted by the outbreak and the restrictions put in place to combat its spread. The majority of startups in the region have either pivoted or scaled back their operations in order to navigate the disruption caused by the pandemic.

The findings are part of a report jointly published by Wamda and Arabnet based on data collected from 247 startup founders from across the Mena region. The report aims to identify the extent of the impact of Covid-19 on the region’s entrepreneurship sector and the measures that can be taken to alleviate the financial stress on startups.

The report was launched in a webinar session that hosted key stakeholders from the region’s entrepreneurship sector including Matic, Eon Dental and Seez as well as the Bahrain Economic Development Board and Saudi Arabia’s director of innovation and entrepreneurship at the Ministry of Investment. 

“In Bahrain, there are clearly some winners who are really struggling; however, there are some sectors that have tremendous potential. What we are seeing in Bahrain is an acceleration of the digitisation process and acceleration of diversification of oil and gas. Whether it's edutech healthtech e-commerce, these sectors are really doing quite well at the moment,” said Simon Galbin,  managing director at Bahrain Economic Development Board.

“This is a very strange situation but I think we are getting a bit of a sense of it right now,” said Mazin Al Zaidi, director of innovation and entrepreneurship sector at Saudi Arabia’s Ministry of Investment of Saudi Arabia.  “Everybody understands what is happening but nobody can predict what is going to happen over the upcoming period. So startups have to play a role in managing how they are going to manage their startups and what they are going to do like large businesses and governments.”  

Key highlights from the report ‘The Impact of COVID-19 on the technology entrepreneurship ecosystem in Mena’:

• Close to 50% of startups that responded to the survey reported that they have a cash runway of less than 6 months. 

• Out of the e-commerce startups surveyed, 54.2% have a runway of less than 6 months, a third of logistics startups have between 1 and 2 months of runway left. 

• In healthtech, 43.8% of startups surveyed have less than 2 months’ of cash runway, with the sector’s startups reporting the funding environment has improved for them. 

• Only 12% of the startups surveyed have a runway of more than 12 months. 

• The report indicates that half of the region's startups have witnessed an impact to their latest funding round.

 To read the full report please click here