Saudi Arabia is an increasingly promising market for any Ukrainian business. In March 2023, at the invitation of StrategEast and the Saudi government agency Monsha'at, Galina Kamyshanska and her team first presented her new venture Rainex.io at the Biban 2023 startup event in the capital Riyadh.
Galina admits that the offer to take part in the conference came as a surprise since she had yet to consider the Gulf region for developing her business. But, as a result, her Ukrainian startup not only found many new customers and future partners, but even shaped the direction of its development.
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"Our startup, Rainex, is a billing platform that makes it easy and efficient to manage subscriptions. Since the beginning of the full-scale war, my team and I felt the support of Ukrainian startups, but we were still looking for new markets for our product,” Galina says.
Rainex had no previous experience participating in large conferences, which required careful preparation. Galina and her team studied the Middle East and North Africa (MENA) market, competitors, and possible prospects for their product in Saudi Arabia, but – even then – Biban 2023 exceeded Galina’s expectations.
“The scale of the event, number of visitors, audience's interest, and the openness of local businesses and investors to Ukrainian startups really struck us,” Galina recalls.
“We met many local entrepreneurs and investors and saw the great potential of this market for Rainex. I was pleasantly surprised by the local accelerators, which help local startups grow and develop and are open to promoting external startups in this market.”
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Galina feels that, with the Gulf market just gaining popularity, many Ukrainian startups should be aware of the opportunities and potential. However, if considering investing a lot of money and time, she considers it important to consider the possible pitfalls.
“We decided to change direction and develop a solution allowing our clients to launch in this market quickly and without risk. This solution is called Merchant of Record, Galina explains.”
“We also decided to apply to local accelerators, which can help test audience demand for our product and advance it in the local market.”
Galina is of the view that, since the market is just beginning to open up, it can be more challenging in some ways. However, this also means that– competition may be more limited.
“There is an opportunity to carve out a niche in the MENA market,” Galina says.
“We took a lot of valuable contacts from the conference – both new clients and future partners. We have seen the potential of the market and have set ourselves future growth targets over the next few years.”
In summary, Galina firmly believes that Saudi Arabia is promising for any Ukrainian startup or existing business.
“I am especially pleased and [feel] supported by the readiness of the market itself to attract new startups and help them develop. In the current economic and political conditions, any market ready to help Ukrainian startups grow is like a breath of fresh breath.”
Why are the Gulf counties so promising for Ukrainian businesses?
Digital transformation and development in all six Gulf Cooperation Council (GCC) countries (UAE, Qatar, Kuwait, Saudi Arabia, Bahrain, and Oman) is experiencing a boom. This is mainly due to large-scale social and economic changes, in turn leading to large-scale digitalization.
Each Gulf state has more than enough resources to implement this strategy. The startup investment fund of a country like Oman alone comprises over $500 million. This means enormous opportunities for the development of Ukrainian startups.
Further afield, economic downturns in countries like the US, EU, and UK have led to many companies reducing their budgets for the development of digital products. This has also meant staff reductions and reduced budgets for developing digital products.
Over a year ago, StrategEast established partnerships with all Gulf countries, which made it possible to launch joint initiatives in the field of IT development. The success of Ukrainian startups at the Biban conference in Riyadh in March last year demonstrated how the Gulf market is thirsty for new ideas and technologies.
Today, there are more than 500 venture capital funds in the Gulf countries, with a multi-billion total capital. StrategEast has already conveyed to some of them that investing in Ukrainian startups is not a risky adventure but a unique opportunity for significant profits and access to the most advanced technologies.
Even with the outstanding efforts of Ukrainian startups to attract investments from Silicon Valley, it remains the case that, due to the war in Ukraine, the likelihood of receiving these investments has decreased significantly. Investors from the Gulf countries are ready to be patient and take on some of the risks that arise.
StrategEast is to host a joint event with the Qatari government in Doha in February for large Ukrainian service companies, whose management will meet with the Qatari government and local business representatives. The latter could turn into significant clients.
Within a year, dozens of Ukrainian startups are expected to be at an advanced stage of attracting investment from the Gulf countries. Over the same period, three to five Ukrainian service companies could be in a position to contract with Gulf companies to provide digital services.
It is now possible to make this process organic and self-sustaining because the IT market is changing before our eyes.
The views expressed are the author’s and not necessarily of Kyiv Post.
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