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Tunisia Is Becoming MENA’s Next Startup Hub

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Since the Arab Spring in 2011, Tunisia’s new democracy has struggled to enact prudent economic policy to provide employment and opportunity for its young, growing population.

Unemployment is currently at 15 percent, with one-third of jobless youth being university graduates. Inequality is steep, while inflation continues to plague investment.

To overcome the education-employment gap, young Tunisians are taking matters into their own hands. Talented, young university graduates are launching myriad startup companies, creating an impressive wave of civic entrepreneurship throughout the tiny country.

Although there are no official figures available on the number of Tunisian startups, estimates suggest thousands of new companies have been formed over the last five years.

New start after the Arab Spring

The country’s startup scene has in large part expanded since the 2011 revolution, thanks to faster, freer Internet access and advances in technology.

Tunisia’s close proximity to Europe also has enabled entrepreneurs to develop mutual platforms that provide job opportunities for Tunisians seeking salaries higher than local rates, entrepreneur Sadek Ghannouchi explained in an interview with Tunisia Live.

Europe also offers Tunisian startups a larger, more profitable market and the opportunity to attend startup expos to promote their ideas.

Additionally, the launch of Carte Technologique Internationale, a prepaid bank card system, in May this year has been hugely successful for the startup sector. The bank card allows startup entrepreneurs to make payments in foreign currency through foreign sites.

Tunisian startups are finding ways to improve their society and fix endemic economic problems though innovation and creativity.

The startups that have achieved the most success in Tunisia are those that use and create tech products to mobilize communities, encourage civic engagement and fill the void in tech advances left by a sclerotic government.

Secure Drive Company, for example, was founded in 2015, and offers automatic reporting and assistance for car accidents that happen in remote areas. Response time by authorities for accidents in rural areas is often long, but with Secure Drive’s app, users can signal for help more easily.

The startup E-Taxi also has gained significant popularity over the last year. The app works similarly to Uber, where users can look for and call cabs to pick them up at any given location.

Founded in 2012, ilboursa.com is Tunisia’s first stock exchange news website. Founder Ismail Ben Sassi started the company with the intention of offering data to help investors in Tunisia make better financial decisions. The site is one of the most visited online sites in the country, averaging 80,000 visitors a month.

Proliferation of startup incubators

Startup incubators have greatly contributed to the success of young companies in Tunisia by helping early seed companies gain the capital and training they need to push their companies into the market.

Startup incubators like the Founder Institute and Boost offer funding, professional training sessions and mentorship programs for young, small companies looking to expand their ideas and improve efficiency.

Educational programs on business and investment strategy have proved immensely useful for young entrepreneurs, as well.

One example includes the Regional Development General Commission’s Integrated Development Program, which aims to collect feedback from local actors and beneficiaries on priority projects, target locations and best options moving forward.

Flat6Labs, a successful incubator that has supported an impressive number of startups in Egypt, Saudi Arabia and the UAE, reportedly will be opening an office in Tunisia in the coming months. Flat6Labs is likely to target entrepreneurs who have an idea, but no minimum viable product (MVP).

The rise of accelerators and continuing investment in entrepreneurship in Tunisia is likely to have significant positive economic repercussions in a country desperate for growth and stability.

Long-term Challenges

Though the outlook remains positive for Tunisia’s burgeoning startup scene, there are remaining structural challenges young companies continue to face.

Public funding, exposure and an opaque investment environment make it difficult for startups to succeed and thrive. Many startups also lack the appropriate legal advice to navigate Tunisia’s cumbersome investment environment.

Startups also struggle to bring in foreign investment because of political risk concerns brought on by civil unrest and violence.

Additionally, the country’s banking sector is weak, especially as GDP growth and lack of investment continues to stumble.

Nevertheless, in spite of these challenges, Tunisian startups are finding ways to improve their society and fix endemic economic problems though innovation and creativity.

As Houssem Aoudi, the CEO of the startup accelerator Cogite, told Tunisia Live: “For me, entrepreneurship is a kind of resistance against unfriendly banking system and our old-fashioned government. Being an entrepreneur offers us a valve to breathe with.”

Moving into 2016, Tunisia will be an important country to watch in the MENA’s startup scene.

Featured Image: Natalia Sidorova/Shutterstock