Why the Middle East’s Startup Ecosystem Is Attracting Global Capital - FINTECH.TV

The Middle East's startup ecosystem is drawing increasing attention from international investors as regulatory reforms, growing financial infrastructure and a strong base of entrepreneurs and equity investors create new financing opportunities. Armineh Baghoomian, Managing Director, Head of EMEA and Co‑Head of Global Fintech at Partners for Growth, said the firm began pursuing the region after regulatory changes in 2018–2019 opened a viable framework for lenders and asset‑backed financing.

"There were some regulatory changes and laws that were put in place in the 2018 timeframe that had lenders like us look at opportunities in the region," Baghoomian told Dalia Kamar at Money20/20 Middle East in Riyadh. "So that framework was put in place. There’s rule of law. There’s a good ecosystem. The ecosystem for entrepreneurs is very strong, and the equity investors are very strong."

Why Partners for Growth moved early

Baghoomian described Partners for Growth's strategy as rooted in targeting underserved markets and sectors. The firm first established a presence in the region in 2019 and identified early winners that demonstrated the thesis in practice. "Trukker was our first. We then did Wizz Air and Tabby, and on and on and on," she said, pointing to a pipeline of transactions that validated the firm's approach.

Partners for Growth focuses largely on asset‑backed lending, financing discrete assets such as receivables or hard assets and structuring around those collateralized elements. That model allows the firm to work with companies that are not profitable on day one but have a clear and relatively quick path to profitability. "Most of the companies we work with globally are not profitable day one, but they have a path to profitability, and a pretty quick one we can see," Baghoomian explained.

Market dynamics and what investors look for

• Founder and team quality: entrepreneurs who are "hungry" and focused on solving visible gaps in large, young, digitally engaged populations.
• Asset backing: availability of receivables or hard assets that can be financed separately to reduce risk.
• Regulatory clarity and infrastructure: changes since 2018 that strengthened rule of law and institutional frameworks.

Baghoomian emphasized that the market's appeal is not unique in the types of gaps it presents — similar patterns appear in other underserved regions — but that the Middle East's combination of youthful demographics, digital adoption and rapidly developing infrastructure makes the opportunities more pronounced. "Here, it’s a bit louder, right? Because everything’s kind of very new," she said.

Outlook

Looking ahead, Baghoomian expects continued improvements in financial infrastructure to widen the pool of institutional investors active in the region. "What we see that we are improving, that we’re really excited about, is just the infrastructure to make it more institutional and allow more international investors to come into the market, which is happening," she said.

The message for founders and investors is clear: with rule‑based frameworks in place, asset‑backed financing models and a pipeline of demonstrable deals such as Trukker, Wizz Air and Tabby, the Middle East is moving from a nascent market to one where global capital can deploy at scale — provided companies show credible paths to profitability and collateral structures that underwrite lending risk.