The Middle East and North Africa (MENA) region is fast emerging as a lucrative market for ‘sustainability’ start-ups, with climate shock-induced extreme environmental and social problems driving local entrepreneurs to mitigate the challenges with commercially viable ventures, according to a sector expert.
The rising commercial-cum-developmental opportunity of this trend has led some of the global start-up accelerators to team with financing institutions like the International Finance Corporation (IFC) to help the ventures scale-up faster with offers of capital and mentorship.
“We have certainly reached a tipping point where there is a critical mass of such entrepreneurs in MENA to warrant us launching the most expansive regional program to date to focus on sustainability,” Alicia Sornson, program and partnerships manager – MENA at Village Capital, a leading global impact-driven and seed-stage acceleration and investment organisation, told Arabian Business.
“All the companies in our program for this year are for-profit, scalable solutions to serious issues in the MENA region and Turkey,” added the senior executive at the Washington DC-headquartered Village Capital.
Sornson said according to the World Economic Forum, the Middle East is especially vulnerable to climate shocks, facing a range of risks such as water scarcity, high levels of pollution, reduced rainfall, drought and a loss of biodiversity. It added part of the MENA region risks becoming uninhabitable by 2100.
“Greenhouse gases are driving the problem, so we need global action,” she said, adding that it is, however, likely that best efforts to reduce emissions will not rule out the need for a degree of adaptation in regions such as MENA.
“It is therefore incumbent on us to foster innovative start-ups whose founders have local and lived experience of environmental and social problems, to help all populations survive and even thrive in a more adverse climate.
Sornson added: “The MENA region is teeming with ideas and innovation for scalable, profitable solutions, to local and regional issues. We’re really excited about the sustainability-focused innovation we’re seeing in the region,”
Village Capital has teamed up with IFC to conduct the start-up acceleration program in the MENA region this year, for which 21 ventures have been selected.
Alicia Sornson, program and partnerships manager – MENA at Village Capital.
On collaborating with IFC, Sornson said this was in line with the organisation’s move to partner with major institutions and corporations with a strong interest in achieving social impact by supporting dynamic entrepreneurs and emerging ecosystems.
“Each of the companies [in the acceleration program] aims to raise capital from investors and scale their operations. We know that the best prepared are the most successful in raising money, which is why they value the advice they receive from well-placed regional experts and peers during our program as much as the injection of funding,” Sornson said.
On the potential of the region for ‘sustainability’ start-ups from a commercial market point of view, she said there were some barriers between countries and regulatory impediments that impact on whether early stage businesses will be able to scale.
“But importantly, we believe that the local expertise present in many ecosystems in the region can still help equip entrepreneurs to succeed, which is why our advisory board can feature so many knowledgeable industry professionals,” Sornson added.
Follow us on
