Startup MGZN

Lebanon Turning into a Significant Factor on the Startup Scene

Although education and knowledge have always been highly appreciated in the Arab world, the countries in the region have not allocated enough funds for investment in research and development. Instead, they focused mainly on oil.

However, despite the long-term lack of R&D investments, the Middle East has quickly turned into a leading tech hotspot, and the startup scene is growing fast. A recent study by ArabNet and Dubai SME found out that only in 2016, MENA startups received almost USD 900 million in funding. That is more than the value of all investments made in the period 2013-2015.

The report also noticed that the venture capitalists and investors were concentrated in a few countries. The UAE hosts about one-third of all the investors. Saudi Arabia and Lebanon share the second place, followed by the rest of the nations.

Although it is a relatively small country, Lebanon reported 37 investment deals in 2016, the second highest number of all the MENA countries. The country has most of the ingredients a young startup ecosystem needs to grow. First of all, it offers excellent STEM education which guarantees high qualified graduates eager to apply what they learned in practice. The Lebanon’s Central Bank gives seven years of interest-free credit to entrepreneurs if they invest in the knowledge economy. Last but not at least, similar to the Silicon Valley, Lebanon also has a bay area which attracts young population.

The 2015 Global Entrepreneurship Report‘s data confirmed the high entrepreneurial spirit among Lebanese youth. According to the report, almost 70% of the young population believes they have the necessary skills to start own business. 30% of the working Lebanese people are running a business or are about to establish one. The Total Early Stage Entrepreneurial Activity in the GEM Report placed Lebanon fourth worldwide.

The British government recently invested GBP 2.5 million in an International Research Centre (IRC) for tech. The new entity will connect Lebanese universities with the global tech industry and other academic institutions worldwide. The IRC already started its first project – a joint venture between the Lebanese University in Beirut and CERN to manufacture a more efficient irrigation system that decreases irrigation expenses from USD 500 to under USD 80 per hectare and saves up to 20% of water consumption.

The second project is the development of an electromagnetic diabetes monitoring device for diabetes patients. It is a collaboration between the Maroun Semaan faculty of Engineering and Architecture and the Faculty of Medicine at the American University of Beirut (AUB).

Half of the Lebanese population is below 25 years of age. Therefore, the country needs to create six times the number of jobs currently available to meet the needs of those entering the job market each year. It would have a positive effect on the brain drain. All that requires an improved R&D investment politics and policy. That is the missing part of the puzzle that could turn the tiny country into a leading actor on the Arab’s tech scene.


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