Middle East Emerging as a New Market for K-Startups

Average Age Young and High Internet Usage
Many Roles for South Korea's IT Startups
Ministry of SMEs and Startups Launches 'Middle East Performance Project Public-Private TF' on 14th

The Middle East is emerging as a new market for 'K-Startups.' The region has a young average age and a high internet usage rate. It is evaluated that South Korea's IT startups have many roles to play in promoting local digital transformation. Interest from domestic startups in this market is also growing. The government has rolled up its sleeves to support startups venturing into the Middle Eastern market.

On the 14th, the Ministry of SMEs and Startups announced that 151 companies applied for 10 spots to participate in the global startup event 'Biban 2023,' which will be held next month in Riyadh, Saudi Arabia. The competition rate is over 15 to 1. The recruitment target was startups and venture companies hoping to enter the Middle Eastern market. Biban, a startup exhibition and competition event that began in 2017, is being expanded to an international event for the first time this year. The Saudi Arabian Small and Medium Enterprises General Authority, the organizer, expects about 550 companies, over 200 speakers, and around 100,000 visitors to attend. Minister Lee Young of the Ministry of SMEs and Startups is also scheduled to depart early next month to attend.

The reason domestic startups are interested in the Middle East is its growth potential. The average age in the Middle East is one of the lowest in the world, under 25, and the majority of the population uses smart devices. In the United Arab Emirates (UAE), the internet usage rate is 99%. In Saudi Arabia, where the Biban event is held, about 70% of the population is under 30 years old, making the average age very young. Being young, the population is also characterized by active use of new technologies. There are few regulations in almost all fields such as non-face-to-face services and online education, leading to the introduction of many new IT technologies.

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Previous successes by domestic startups targeting the Middle Eastern market are also cited as reasons other companies are entering this market. Farm tech startup N.Thing exported a smart farm 'Cube' worth $2.5 million (about 3.5 billion KRW) to the UAE's Sarya Group in 2021. Cube is equipment that uses advanced technology to grow crops inside containers. Using this, fresh vegetables can be consumed year-round even in the Middle East. Cloud platform company Bespin Global is also active. The company first entered the Middle Eastern market in 2019 and signed a partnership with the Abu Dhabi Investment Office to accelerate digital transformation. Last year, it expanded and relocated its Middle East and Africa branch to Abu Dhabi and established a cloud operations center and education academy.

The government is also actively preparing support policies. The Ministry of SMEs and Startups recently launched the 'Middle East Performance Project Public-Private TF.' This is to discuss strategies for entering the overall Middle Eastern market, including the UAE and Saudi Arabia. The TF is composed of three divisions: startups, investment, and export/technology. At the first TF meeting held on the 14th, follow-up measures regarding the 'Memorandum of Understanding on Cooperation in SMEs and Innovation' signed this year between the Ministry of SMEs and Startups and the UAE Ministry of Economy were discussed. Minister Lee Young said, "We will implement follow-up measures and discover additional cooperation projects in the Middle East region, concentrating policy tools and resources so that our startups can seize global growth opportunities in the Middle East, which is preparing future growth engines based on abundant financial resources."