Oman’s Startup Ecosystem: The Hidden Gem of the Persian Gulf

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Oman’s startup ecosystem is experiencing a quiet revolution—emerging from relative obscurity to become one of the GCC’s most promising frontier markets. While startups raised approximately $45 million in 2024, up from just $15 million in 2022, the real story lies in structural transformation: government initiatives like the $500 million Oman Future Fund, regulatory reforms enabling 100% foreign ownership, and the National Program for Enhancing Economic Diversification (Tanfeedh). With 95% internet penetration, strategic positioning at the entrance to the Persian Gulf, and a young population (60% under 30), Oman offers untapped potential for founders seeking first-mover advantages in an underserved market. The Sultanate’s stable political environment, emerging VC ecosystem (including IDO Investments and Oman Technology Fund), and success stories like Marhaba (acquired by Delivery Hero) and Takaful Oman position it as an increasingly compelling destination for entrepreneurs ready to build in a virgin ecosystem.

A Gateway Positioning: Oman’s Strategic Advantages

Oman occupies a distinctive position in the Middle East startup landscape, offering unique advantages often overshadowed by its flashier neighbors.

Geographic and Strategic Access

With a population of 4.5+ million and 95% internet penetration, Oman provides an underserved market ripe for digital transformation. The country’s strategic location offers overlooked advantages:

Indian Ocean gateway: Controls the Strait of Hormuz, through which 20% of global oil passes
Logistics powerhouse: Developing as alternative to congested Dubai/Jebel Ali ports
African connections: Historical ties to East Africa (Zanzibar, Kenya, Tanzania)
South Asian proximity: Deep cultural/trade links with India and Pakistan

Untapped Market Dynamics

Oman’s market characteristics create unique opportunities:

Virgin ecosystem: Less competition than saturated UAE/Saudi markets
Government digitization: Aggressive public sector digital transformation creating opportunities
Young demographics: 60% of population under 30, tech-savvy and underserved
Tourism potential: 3.5 million visitors annually, growing 10% year-over-year

Cost and Operational Advantages

Compared to regional peers, Oman offers compelling economics:

Operating costs 40-60% lower than Dubai
Talent costs 30-50% lower than Qatar/UAE
Real estate 50-70% cheaper than regional hubs
Government incentives reducing startup costs further

Oman maintains unique regional neutrality:

Consistent foreign policy avoiding regional conflicts
Stable succession following Sultan Haitham’s ascension (2020)
Progressive social policies while maintaining cultural authenticity
Bridge between Iran and GCC, India and Pakistan

This combination of strategic location, market opportunity, and cost advantages positions Oman as an ideal base for startups seeking to build without the noise and competition of established hubs.

Government Support and Policy Infrastructure

Oman’s government has pivoted decisively toward economic diversification, with entrepreneurship as a central pillar of Vision 2040.

Oman Vision 2040

The comprehensive Oman Vision 2040 represents fundamental economic restructuring with clear targets:

Increase private sector contribution to 90% of GDP (from current 60%)
Create 2 million new jobs by 2040
Achieve top 20 global ranking in government digital services
Build innovation-driven economy reducing oil dependence

Oman Future Fund (OFF)

The $500 million Oman Future Fund, launched in 2024, addresses critical funding gaps:

$200 million allocated for venture capital investments
$150 million for technology transfer initiatives
$100 million for startup ecosystem infrastructure
$50 million for international partnership programs
Focus on Series A and beyond to enable scaling

National Program for Enhancing Economic Diversification (Tanfeedh)

Tanfeedh has delivered tangible results since 2016:

121 initiatives launched across sectors
$13 billion in investments committed
35,000+ jobs created in diversification sectors
Specific focus on logistics, tourism, manufacturing, and technology

Startup-Friendly Reforms

Revolutionary policy changes include:

100% foreign ownership allowed (unprecedented reform in 2020)
One-stop-shop licensing through Invest in Oman
10-year residency for investors and skilled professionals
Bankruptcy law protecting entrepreneurs (2020)
Labor law flexibility for startups

Sector-Specific Initiatives

Targeted programs driving innovation:

Oman ICT Group: $100 million fund for tech investments
Petroleum Development Oman (PDO): In-Country Value program mandating local innovation
Public Authority for SME Development (Riyada): Comprehensive startup support
Innovation Park Muscat: 500,000 sq.m. tech hub under development
Knowledge Oasis Muscat (KOM): Existing tech park with 3,000+ professionals

The Funding Landscape: Early But Accelerating

Emerging Funding Momentum

Oman’s startup funding landscape, while nascent, shows promising acceleration and structural improvements.

Overall trajectory:

$45 million raised in 2024 (estimated)
200% growth from $15 million in 2022
25 active startups receiving funding
International investor interest emerging

The Opportunity in Immaturity

While funding volumes lag regional peers, this creates advantages:

Less competition for available capital
Lower valuations offering better entry points
Government funding more accessible than mature markets
First-mover advantages in multiple sectors

Sector Breakdown

Logistics and Supply Chain leading:

35% of funding aligned with Oman’s port infrastructure
Companies like Bayan and Fresh Express gaining traction
B2B focus addressing real economy needs
Export potential to broader region

FinTech emerging strongly:

25% of funding driven by financial inclusion mandate
Thawani Pay, Malia, and others building infrastructure
Central Bank of Oman (CBO) supportive regulatory framework
Islamic finance innovation opportunities

Tourism and Hospitality Tech:

20% of funding leveraging tourism growth
Adventure tourism platforms emerging
Heritage and cultural experience marketplaces
Integration with government tourism initiatives

Other nascent sectors:

AgriTech: Addressing food security priorities
EdTech: Serving young population
HealthTech: Digitizing healthcare delivery
CleanTech: Renewable energy and water solutions

Local Funding Sources

Active local investors:

IDO Investments: $50 million fund, most active local VC
Oman Technology Fund: $200 million government-backed fund
Riyada Fund: Seed funding up to $130,000
Al Waha Fund: $20 million for early-stage companies
Bank Muscat Innovation Hub: Corporate venture initiatives

Family offices entering:

Traditional merchant families diversifying portfolios
Next-generation leadership driving tech investments
Patient capital with 10+ year horizons

International Interest Building

Regional investors discovering Oman:

Faith Capital exploring Oman opportunities
Wamda Capital made first Oman investment
Saudi VCs looking beyond domestic market
Indian investors leveraging diaspora connections

Exit Challenges and Opportunities

Limited but improving exit environment:

Marhaba: Acquired by Delivery Hero (validation moment)
Takaful Oman: Regional insurance platform expansion
IPO pathway developing through Muscat Securities Market reforms
Regional M&A increasing as GCC integration deepens

Success Stories: Omani Startups Breaking Through

Thawani Pay: FinTech Pioneer

Founded in 2019, Thawani Pay has become Oman’s flagship fintech success, building critical payment infrastructure for the digital economy.

The platform:

Payment gateway serving 2,000+ merchants
Processing $100+ million annually
60% market share in e-commerce payments
Expansion to B2B payments and government services

Growth metrics:

300% year-over-year transaction growth
Raised $5 million in Series A (2024)
EBITDA positive within 3 years
Planning GCC expansion in 2025

Strategic importance:

Enabling e-commerce ecosystem
Financial inclusion for SMEs
Government digital transformation partner
Building rails for digital economy

Marhaba: The Exit That Changed Everything

Marhaba (formerly Akeed) demonstrated Oman’s potential through its journey to acquisition.

The story:

Founded by Omani entrepreneurs in 2018
Food delivery platform serving Muscat, Sohar
Acquired by Delivery Hero in 2022
Validated Oman as viable startup market

Impact on ecosystem:

First major tech exit from Oman
Inspired new generation of founders
Attracted international investor attention
Proved execution quality of Omani talent

Bayan: Logistics Innovation

Bayan represents Oman’s logistics advantages, building supply chain solutions for regional trade.

The solution:

Digital freight forwarding platform
Leveraging Oman’s port infrastructure
$10 million GMV in first 18 months
Connecting Oman, UAE, Saudi trade corridors

Traction:

200+ enterprise customers
Backed by IDO Investments
Partnership with Oman Ports
Expansion to East Africa planned

Other Rising Stars

Fresh Express:

Grocery delivery platform
50,000+ users in Muscat
30-minute delivery promise
Expanding to Salalah, Sohar

Rihal:

Travel and tourism marketplace
Adventure tourism focus
Partnered with Ministry of Tourism
International tourist targeting

Edu Plus:

EdTech platform serving 20,000+ students
Adaptive learning technology
Arabic and English content
Expanding to Saudi Arabia

Challenges: Building From Scratch

Ecosystem Immaturity

Fundamental gaps remain:

Limited startup density: ~100 active startups total
Weak network effects: Insufficient peer learning
Few mentors: Lack of experienced entrepreneurs
Limited success stories: Few role models for founders

Building blocks needed:

Critical mass of founders
Experienced mentors and advisors
Serial entrepreneurs
Ecosystem connectors

Talent Pipeline Constraints

Human capital challenges:

Limited technical talent: Few experienced developers
Brain drain: Top talent leaving for Dubai/abroad
Skill gaps: Lack of product managers, growth marketers
Wage competition: Oil/gas sector paying premiums

Emerging solutions:

Government scholarship programs
Coding bootcamps launching
Remote work acceptance
Diaspora return programs

Market Size Reality

Small addressable market:

4.5 million population limits B2C potential
Low purchasing power versus Qatar/UAE
Geographic dispersion: Population spread across vast territory
Export imperative: Must think regionally from day one

Strategic approaches:

B2B/B2G focus with larger contracts
Regional expansion planning
Niche global markets
Government as anchor customer

Cultural Conservatism

Traditional mindsets:

Risk aversion: Preference for government/corporate jobs
Family pressure: Stability over entrepreneurship
Limited failure acceptance: Social stigma around business failure
Gender gaps: Women underrepresented in tech

Positive shifts:

Youth embracing entrepreneurship
Government celebrating entrepreneurs
Female entrepreneurship growing
University programs changing mindsets

Capital Gaps

Funding desert between stages:

Seed funding: Available through government programs
Series A desert: $1-5 million rounds nearly impossible
Growth capital: Non-existent locally
Limited investor sophistication: Few understand venture model

Solutions developing:

Oman Future Fund addressing gaps
Regional investors entering
Corporate venture emerging
Government co-investment programs

The Support Ecosystem: Foundations Building

Incubators and Accelerators

Riyada (Public Authority for SME Development):

National SME development mandate
1,000+ SMEs supported annually
Seed funding up to $130,000
Training programs reaching 5,000+ entrepreneurs
Incubation centers in 5 cities

National Business Center (NBC):

Premier incubator at Knowledge Oasis Muscat
50+ startups incubated
Focus on ICT and digital startups
Mentorship from regional experts
Free office space for 2 years

Oman Technology Fund Accelerator:

$200,000 investment per startup
6-month program
Sector agnostic approach
Access to regional mentor network
2 cohorts per year

Zubair SEC:

Social enterprise focus
Supporting impact-driven startups
100+ social entrepreneurs trained
Partnership with British Council
Focus on sustainability and inclusion

Academic Incubators:

Sultan Qaboos University Innovation Hub
German University of Technology (GUtech) Center
Caledonian College entrepreneurship programs
Combined 200+ student startups annually

University Ecosystem

Sultan Qaboos University (SQU):

Innovation and Entrepreneurship Center
1,500+ students in entrepreneurship courses
Annual startup competition with $100,000 prizes
Research commercialization initiatives
Partnership with international universities

Higher College of Technology:

Ibtikar student incubator
Focus on technical ventures
Industry partnerships for practical training
500+ students in startup programs

Private Universities Contributing:

Sohar University tech entrepreneurship focus
Dhofar University tourism innovation
Muscat University business incubation
Combined 3,000+ students exposed to entrepreneurship

Support Organizations

Oman Chamber of Commerce and Industry (OCCI):

SME Committee driving policy advocacy
Networking events connecting founders
International partnerships facilitating trade
Export support programs

Startup Oman:

Community-driven initiative
2,000+ members in network
Monthly meetups and workshops
Demo days connecting founders to investors
Partnership with Google for Startups

Women’s Business Council:

Supporting female entrepreneurship
500+ women entrepreneurs in network
Mentorship programs
Access to dedicated funding
30% of new startups founded by women

International Programs

UK-Oman Digital Hub:

British Council partnership
Tech skills development
50+ startups supported
UK market access support

INJAZ Oman:

Youth entrepreneurship focus
10,000+ students reached
Company creation programs
Regional competition opportunities

Looking Ahead: The Frontier Opportunity

Inflection Point Approaching

Oman’s startup ecosystem stands at a crucial juncture in 2025:

Momentum building:

Funding tripling in 2 years ($15M to $45M)
Government commitment unprecedented (Oman Future Fund)
Regulatory barriers falling (100% foreign ownership)
First exits proving viability (Marhaba)
Youth demographics favorable (60% under 30)

Structural challenges:

Ecosystem density still below critical mass
Talent pipeline needs development
Investor sophistication lacking
Market size constraints
Cultural shifts required

What Success Looks Like by 2030

Quantitative targets:

$200M+ annual startup funding (4x current)
500+ active startups (from 100 today)
5+ Series A rounds annually
10+ exits cumulative
20,000 jobs in startup ecosystem
1 unicorn or near-unicorn

Qualitative markers:

Regional investors actively seeking Oman deals
Omani startups expanding successfully to GCC
Diaspora talent returning to build companies
Corporate venture active from major Omani companies
University spinoffs commercializing research

Strategic Imperatives

For government:

Deploy capital aggressively: Oman Future Fund must move quickly
Talent development: 10,000 developer initiative needed
Ecosystem density: Support programs to reach 500+ startups
Regional positioning: Market Oman’s unique advantages
Success amplification: Celebrate wins loudly

For investors:

First-mover advantage: Enter before market heats up
Patient capital: Accept longer development timeline
Hands-on support: Provide expertise beyond capital
Regional networks: Connect Omani startups regionally

For corporates:

Innovation mandates: PDO model across sectors
Startup procurement: Become customers not just mentors
Corporate venture: Deploy balance sheet capital
Talent sharing: Secondments and partnerships

For founders:

Solve real problems: Focus on logistics, finance, government
Think regionally: Build for GCC from inception
Leverage advantages: Use Oman’s strategic position
Government partnership: Align with national priorities

The Unique Opportunity

Oman presents a rare frontier market opportunity in the GCC:

First-mover advantages:

Less competition than saturated markets
Government support more accessible
Lower costs enabling longer runway
Virgin sectors awaiting disruption

Strategic positioning:

Gateway to Iran (when sanctions lift)
Bridge to East Africa
Alternative logistics hub to UAE
Neutral ground for regional business

Sector opportunities:

Logistics: Leveraging port infrastructure
Tourism: Untapped adventure/heritage potential
FinTech: Financial inclusion imperative
GovTech: Aggressive digitization agenda
AgriTech: Food security priority

The Path Forward

Oman offers something increasingly rare: a true frontier market with government backing, improving infrastructure, and massive headroom for growth. The ecosystem requires:

Pioneer mindset: Builders willing to create the ecosystem while building their companies
Patient capital: Investors understanding 7-10 year development cycles
Government execution: Rapid deployment of committed resources
Talent development: Aggressive programs to build human capital
Regional integration: Connections to mature ecosystems

For the right founders and investors, Oman represents compelling opportunity:

Lower competition than Dubai/Riyadh
Lower costs enabling capital efficiency
Government support more accessible than larger markets
Virgin territory across multiple sectors
Strategic advantages others overlook

The startups that succeed in Oman over the next 5 years won’t just build companies—they’ll build an entire ecosystem. This frontier-building opportunity offers outsized rewards for those willing to embrace the challenge.

The key insight: Oman isn’t trying to compete with Dubai or Riyadh on their terms. It’s building something different—a strategic, cost-effective base for companies targeting the broader region. For founders who understand this positioning, Oman offers unique advantages unavailable elsewhere in the GCC.

Oman’s combination of strategic location, government commitment, cost advantages, and frontier opportunity makes it one of the most intriguing undiscovered startup ecosystems in 2025 and beyond.

Read our article about Morocco here.