Revitalizing Palestinian Entrepreneurship

Revitalizing Palestinian Entrepreneurship
17 Oct 2024
Revitalizing Palestinian Entrepreneurship

Micro, Small, and Medium-sized Enterprises (MSMEs) are the backbone of the Palestinian economy, playing an essential role in its stability and growth. However, escalating aggression against Palestinians has left these already vulnerable businesses confronting unprecedented challenges, threatening their survival and the broader economic landscape.

MSMEs account for over 98% of the economy and contribute more than 60% to the gross domestic product, have been particularly hard hit. The escalation in October 2023 led to a 6.4% contraction of the local economy by year-end, as mobility restrictions and employment losses severely disrupted business operations. Despite these setbacks, the startup ecosystem in Palestine remains dynamic, valued at $66 million, with $9.5 million in total investments. Entrepreneurs, highly educated and increasingly youthful, are leveraging regional and international networks, especially across the Middle East, North Africa, and the United States.

However, the path to recovery and sustainable growth remains fraught with obstacles. Palestinian startups face a fragmented entrepreneurship ecosystem, limited access to mentors and investment, and a lack of support systems. Challenges such as high unemployment, restrictive policies, and damage to the Gaza business ecosystem further strain the country’s economic potential.

Yet, there are signs of resilience in sectors like technology, healthcare, and creative industries. Initiatives like the SEED Project aim to address these barriers by fostering innovation, improving market access, and building cross-border linkages, empowering entrepreneurs to lead Palestine toward a more sustainable and inclusive future.

The challenges posed by a fragmented entrepreneurial ecosystem and limited access to funding and expertise have stifled the potential of Palestinian startups and MSMEs. Without the right resources, support structures, and connections, even the most promising businesses struggle to gain momentum, threatening the future of Palestine’s economy.

To address these barriers, MENACatalyst (PalestineCatalyst) is launching the SEED Project, a comprehensive initiative designed to revitalize Palestine’s innovation ecosystem and empower startups and MSMEs to thrive. The SEED Project focuses on fostering inclusive economic growth, providing essential market access, and building cross-border linkages by leveraging the expertise, resources, and networks of the Palestinian diaspora. By creating an enabling environment for innovation actors, the SEED Project seeks to unlock the full potential of Palestine’s entrepreneurial landscape.

Over the next 36 months, SEED will directly support 12 growth-stage startups and MSMEs across the creative industries, alongside strengthening three innovation hubs. These hubs will incubate new startups and cultivate the next generation of entrepreneurs by connecting them with a global network of mentors, investors, and regional partners. Through policy dialogue and engagement with the Palestinian private sector, SEED will drive the maturation of the ecosystem, ensuring sustainable growth and contributing to long-term economic resilience.

To ensure the SEED Project's success, we are engaging key stakeholders within the Palestinian ecosystem and beyond. This includes incubators, accelerators, universities, and development support organizations, as well as local private sector companies that can shape policy, offer funding, and fuel ecosystem growth. Currently, 27 incubators in Palestine are underutilized, but through SEED, they will be activated to host events, meetups, and startup competitions, providing vital space and resources for entrepreneurs.

Venture capital access remains limited, but with continued support from active VCs and financial institutions like the Bank of Palestine, startups and MSMEs can overcome these barriers. Private sector stakeholders, including telecom companies, cultural organizations, and development institutions, have also shown interest in driving innovation and collaboration across the ecosystem. Through the SEED Project, we aim to build stronger market links and foster new opportunities for Palestinian entrepreneurs to expand their reach and tap into the vast potential of the diaspora.

MENACatalyst's (PalestineCatalyst) commitment to fostering inclusive growth in Palestine’s entrepreneurial ecosystem has been a long-standing priority. A key example of this is the DAIMN (Diaspora, Angels, Investors, Mentors Network) initiative, which successfully created a gateway for the Palestinian diaspora to actively engage with local startups. DAIMN established Palestine’s first-ever diaspora networking community, connecting 100 business enablers, industry partners, and investors from around the globe. It also provided local entrepreneurs with mentorship, access to markets, and opportunities to showcase their potential through pitch events and global demo days in Jordan, the UAE, the UK, the US, and Chile.

Building on this foundation, the SEED Project will continue to leverage these networks and lessons learned to drive innovation, strengthen startups, and ensure long-term economic resilience for Palestine.

One of the standout success stories from the DAIMN initiative is Gamiphy (now Coretava), a user engagement platform founded by Aws Al Nabulsi. After participating in MENACatalyst (PalestineCatalyst) Santiago Pitch Challenge, Aws connected with investors and business partners from the Palestinian diaspora in Latin America. This opportunity led him to join Startup Chile, where he secured $80K in equity-free funding and expanded his business into new markets like Chile and Brazil. Gamiphy’s journey highlights the vital role of the Palestinian diaspora in providing local startups with global opportunities for growth and market access.

Established in 2018, weDeliver  (now Thrivve) has emerged as the first crowdsourced delivery service for businesses in emerging markets. After joining MENACatalyst (PalestineCatalyst), the startup gained access to new markets in Dubai and London, allowing it to connect with top business enablers, industry partners, and investors. weDeliver also achieved first place in the startup category at Startup Istanbul 2019. As one of Palestine’s fastest-growing startups, weDeliver has launched in Saudi Arabia, further expanding its reach and impact.

Ultimately, the SEED Project stands as a testament to our unwavering commitment to fostering innovation and economic resilience in Palestine. By leveraging the strength of the Palestinian diaspora and building strategic partnerships within the local ecosystem, we aim to unlock new opportunities for entrepreneurs and drive sustainable growth.