Building Startups in Palestine

In this edition of Industry Voices, we explore the unique dynamics of building a startup in Palestine, as seen through the eyes of Yousef Srouji, co-founder of MENA Analytics and Principal Consultant at Momentum Labs. This piece dives into the complex and inspiring realities of Palestine’s emerging startup ecosystem—told through the lens of someone on the ground, living it every day.

Leaving to Learn, Returning to Build 

Born in Nazareth and raised between Bethlehem and Qatar, Yousef's early life was marked by transitions. He pursued a BA in Economics and Philosophy in Canada and later obtained a Master’s in Development Practice from UC Berkeley. During his time at Berkeley, Yousef co-created a documentary based on archival footage filmed by his mother during the Second Intifada. The project taught him invaluable lessons in pitching, team collaboration, and storytelling—skills that seamlessly translated into his entrepreneurial journey. “Filmmaking and startups share a lot in common; both require a compelling vision, a strong team, and the ability to pitch effectively to secure funding,” he reflects.

Despite his international education, Yousef always felt a pull back to Palestine. “I graduated and landed an internship at a hedge fund near New York,” Yousef recalls. “While I was successful in my role, I felt like a robot, contributing to someone else’s wealth without a deeper sense of purpose.” That’s when Yousef realized he needed to return to Palestine to pursue a more meaningful and impactful career. This decision, while seen by some as risky, laid the foundation for Yousef’s journey into entrepreneurship. He joined Momentum Labs, a venture builder based in Ramallah, which nurtures startups from ideation to launch.

Momentum Labs emerged to address the lack of a robust pipeline for startups and entrepreneurs in Palestine. “Sari Taha and Zayne Abudaka saw this gap and realized there was a need for a startup studio,” he shares. Unlike traditional incubators or accelerators, a venture builder takes a more hands-on approach. To support this model, Momentum Labs operates a consulting arm, using the revenue generated to fund its own ventures. One of these ventures was MENA Analytics, which initially began as a service provided through Momentum Labs. “Just about a year and a half ago, we decided to spin it off into its own startup, and that’s when I became the CEO” Yousef shares. 

MENA Analytics was born out of Momentum Labs’ experience conducting market research projects across the region. During these projects, the team identified a glaring gap in the market—a need for a tool that could simplify and democratize access to high-quality market insights. Leveraging automation and AI, MENA Analytics streamlines the entire process, from survey design to data analysis, making it accessible to businesses of all sizes. Yousef’s vision is clear: “We’re building a friendly alternative to platforms like Qualtrics or Ipsos, focusing on usability and affordability for users without a background in data or market research.” 

MENA Analytics is gearing up for a big year. The team aims to launch its MVP by Q2 2025 and close another round of funding by year-end. Yousef’s ultimate goal is to position the platform as a leader in automated market research across the MENA region.

Palestine: A Launchpad for Innovation 

Yousef highlights Palestine's unique market characteristics as a significant yet often overlooked advantage. “It’s a small, but diverse market” he explains. The population spans a spectrum—from conservative communities to highly progressive ones—offering an unparalleled microcosm of the Arab world. This diversity makes Palestine an ideal testing ground for startups. “You can test products in different societies; and because it’s small, you can easily get feedback, see where your product is succeeding, and replicate those successes in other countries.” Despite the potential, however, success stories of this nature remain limited, and scaling beyond Palestine is a challenge.

Barriers and Challenges

The entrepreneurial journey in Palestine is fraught with unique funding challenges. As Yousef explains, securing investment from regional or international VCs often hinges on proving traction beyond the local market. “They pretty much all ask us to have sales outside of Palestine before they’re willing to invest.” For many startups, this presents a classic chicken-and-egg problem: they need funding to scale abroad but must show regional success to secure that funding. This issue is compounded by the limited presence of local investors who understand the nuances of the Palestinian startup ecosystem. “There’s definitely a lack of early-stage funding, especially at the angel level, to help startups build strong local products before expanding.”

Another major hurdle for entrepreneurs is Palestine's legal and financial system. The lack of supportive legal frameworks, especially regarding taxation and banking, adds significant complexity to running a startup. As Yousef explains, “The legal system here is not designed to even understand what a startup is.” He provides an example of this disconnect: “Our local tax system doesn’t recognize investments as distinct from income, which leads to unintended taxation on vital funding.” On top of that, Palestine faces international banking restrictions. “We’re about to close a round of investment, but the company’s U.S. bank isn’t allowing transfers to Palestine since the war started. How am I going to transfer salaries to my employees if all the investment money is in the U.S.?”

While systemic improvements are needed, progress has been slow. Yousef acknowledges recent changes, such as updated business registration laws, as steps in the right direction. However, he notes that entrenched political and bureaucratic hurdles continue to stifle broader reforms. “There is pressure for change, both internally and from international organizations, but the politics of it all complicates the process,” he explains. For sustainable progress, collaboration between government entities, international organizations, and local entrepreneurs will be crucial. Until these gaps are addressed, Palestinian entrepreneurs must continue to overcome immense hurdles just to maintain operations, let alone scale their ventures.

Resilience in the Face of Adversity

Despite the challenges, Yousef emphasizes the unmatched resilience of Palestinian entrepreneurs. “When you’ve raised two rounds of investment during a war, you’re ready to tackle anything,” he asserts. This environment creates resourceful and determined founders who thrive even in the most adverse conditions. For investors, this grit is an asset. “You can throw a successful Palestinian founder anywhere, and they’ll succeed. Put them in a place like Dubai, and they’ll dominate because they know how to work under extreme pressure.”

Yousef highlights Yamsafer, a travel booking agency that once stood on the brink of an exit after receiving offers from industry giants like Booking.com and Expedia. Unfortunately, the pandemic struck, halting its momentum. “COVID killed it, as simple as that.”

Despite setbacks, other Palestinian startups are making strides regionally and even globally. Companies like Olivery, Coretava, and The Middle Frame, backed by organizations like Flat6Labs and Ibtikar Fund (Palestine’s only VC), are expanding beyond local markets and carving niches in various sectors. “Coretava is even making significant inroads in South America,” Yousef notes, emphasizing that Palestinian startups are finding ways to thrive despite challenges. However, he is realistic: “Let’s look back in five years’ time to assess exit strategies. For now, the ecosystem still needs to mature.”

The Role of the Diaspora: Giving Back Through Investment

Yousef sees immense potential in the Palestinian diaspora's ability to support the local startup ecosystem. He commanded initiatives like Peleset Angels, which sought to pool diaspora capital into angel investments for Palestinian startups. While its progress stalled, the concept remains promising. “What we need is a framework where diaspora investors understand the local context and collaborate with those on the ground,” he explains. He notes the high-risk, high-return nature of investing in Palestine, emphasizing that diaspora investors must approach it with both patience and understanding.

Shifting Palestine’s Startup Culture

Yousef highlights the need to address a cultural gap that hinders innovation in Palestine. “Our hypothesis isn’t that we lack talent—it’s that culturally, we don’t fully understand what startups are or how they work,” he explains. This is where initiatives like venture builders play a pivotal role, creating environments where entrepreneurs feel supported to test, fail, and eventually succeed. Such a cultural shift, he believes, is essential to unlocking Palestine’s untapped entrepreneurial potential and ensuring long-term success for its startups. Central to this shift is the ability to embrace failure and foster collaboration. “Don’t be scared to fail,” Yousef advises, pointing out the hesitation in Palestinian culture to view failure as a learning opportunity. He also stresses the importance of openness, urging founders to share their ideas and seek collaboration rather than fear theft. “If someone steals your idea and builds it better than you, that’s because you didn’t do a good enough job. Find the people to help you build it,” he says. 

For Yousef, fostering a culture of resilience, openness, and collaboration is crucial, but it’s only part of the equation. To truly unlock Palestine’s entrepreneurial potential, a comprehensive shift is needed—one that includes not only a cultural embrace of failure and collaboration but also greater access to funding, supportive legal frameworks, and stronger connections with global markets. Only then can Palestine’s startup ecosystem become a sustainable environment for innovation and growth.

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