Venture Studio – A new business model is emerging to support the start-up building space globally

In building out a start-up, an entrepreneur is faced with the choice between three types of support structures, each playing a different role in startup creation –

1. Venture Capital Funds that inject capital into existing ventures to scale them.
2. Accelerators/Incubators that help build out validated ideas.
3. Venture Studios that serve the value chain from end to end by ideating in-house and guiding the venture all the way till scale-up.

Venture Studios are a new way of building start-ups in a structured manner. The concept has gained traction with more than 200 studios coming up around the world (with more than 4 studios in the Middle East) particularly after a few large-yet-successful exits.


MENA start-up ecosystem gap can be addressed by Venture Studios

When compared to the rest of the world, the Middle East has a thriving funding ecosystem largely dominated by venture capital firms of various sizes. Venture Studios remain fairly unchartered territory. There exist more than 4 studios in UAE and KSA that are relatively new but have made significant strides.

These studios can provide a boost to the ecosystem which can help accelerate the region towards a more developed start-up ecosystem.


Venture Studios targeting 3% of the $3 bn+ committed funding in the region

Governments in UAE and KSA have committed ~$3.3 bn for entrepreneurship through various programs and initiatives. Our estimates indicate that Venture Studios in the region are looking to raise $100 mn for the next wave of start-ups in the following year or so.

Governments could potentially allocate a small portion of the existing $3.3 bn available for jump starting the start-up ecosystem. We believe that start-up studios will slowly mature in terms of processes and will see exponential growth once there a few exits. This will bring significant buoyancy in the ecosystem.

Author

  • Mrigank leads business research and strategy engagements for leading internet sector corporates at Redseer Strategy Consultants. He has developed multiple thought papers and is regularly quoted in media and industry circles.