Village Capital’s Middle East and N. Africa Ecosystem Builders Program has fostered cross-border collaboration and investment, inspired by their 2023 report on the challenges and opportunities for early-stage ventures in the region.

The Middle East and North Africa (MENA) region has seen remarkable growth in venture capital investment, but challenges remain in diversifying this capital across a wider range of startups.

Village Capital, a long-standing ANDE member, impact investor, and global firm supporting impact-creating entrepreneurs, released a report in May 2023 that sheds light on the dynamics shaping the region’s early-stage entrepreneurial ecosystem.

The insights from this report served as the foundation for the “MENA Ecosystem Builders Program,” an initiative launched by Village Capital in partnership with the Dutch Good Growth Fund (DGGF).

“The MENA region is changing, and has been for years,” said Alicia Sornson, the report’s author. “Rapid growth, market fragmentation, economic diversification—a lot goes into understanding the region and its trajectory for growth. Our intention in writing this report was to better understand the MENA region’s entrepreneurial ecosystem from the investor, ESO, and entrepreneur’s points of view.”

The report, titled “Unlocking the Pipeline in MENA: Getting High Growth Potential Ventures Investment Ready,” draws on conversations with prominent investors, entrepreneurs, accelerators, and incubators across the region.

Village Capital has a strong track record of supporting ecosystem builders in emerging markets, having collaborated with more than 170 such organizations in 90 countries since 2016.

Unlocking MENA’s Entrepreneurial Potential

Building on the report’s findings, Village Capital and the DGGF partnered with twelve locally led Entrepreneur Support Organizations (ESOs) in Egypt, Jordan, Lebanon, Morocco, Palestine, and Tunisia to launch the “MENA Ecosystem Builders Program.” This initiative sought to bridge the support gap for early-stage ventures, providing critical technical assistance and fostering an investable deal flow, particularly for ventures often overlooked by traditional financing institutions.

Building Bridges for a Thriving Startup Ecosystem

One of the most surprising findings, according to Sornson, was “the universal energy behind opportunities to see the region as a whole, bridge ecosystems and build cross-border solutions.” This collaborative spirit is a promising sign for the region’s future growth.

The report also highlights several other key themes:

• Concentration of Capital: A significant portion of investment capital is concentrated in a small number of ventures, limiting opportunities for a wider range of startups.
• Pipeline Challenges: Investors face difficulties in identifying and accessing a diverse pipeline of investment-ready ventures.
• Ecosystem Fragmentation: The entrepreneurial ecosystem is fragmented, with limited cross-border collaboration and knowledge sharing.
• Regulatory Barriers: Regulatory hurdles and bureaucratic processes can hinder the growth of startups and discourage investment.
• Talent Gap: A shortage of skilled talent, particularly in technology and business development, poses a challenge for startups.

Empowering MENA’s Next Generation of Entrepreneurs

Village Capital is now offering a series of webinars to unpack the strategic decisions, successes, and insights gained from the MENA Ecosystem Builders Program. These webinars will offer practical knowledge for stakeholders across MENA and similar ecosystems, sharing lessons learned and best practices for supporting early-stage ventures in emerging markets.

Click here to access the full report, and learn more about the MENA Ecosystem Builders Program, on Village Capital’s website.