Before October 7, 2023, Palestinian founders were part of a growing tech and startup sector. They were using their digital skills to overcome movement restrictions and connect to a global marketplace, giving them a virtual window to the world.

The Information and Communication Technology (ICT) sector was estimated to contribute $641 million to the economy, accounting for about 4% of the total Palestinian gross national product, according to a recent report by Gaza Sky Geeks (GSG).

But all that changed after the war. In the last two years, close to half a million jobs have been lost, including 200,000 in Gaza and 144,000 jobs in the West Bank, according to the World Bank.

Beyond the destruction and economic hardship, the war also had a significant impact on the psychological and mental health of Palestinians. The World Health Organization (WHO) reports that over 485,000 people in Gaza are suffering from mental health disorders, including anxiety and depression. 

But while Gaza bore the brunt of destruction— 80% of its infrastructure has been damaged or destroyed, according to the United Nations Development Program (UNDP)— Palestinians in the West Bank and other territories have also been impacted.

“I feel that I’m not the same person I was two or three years ago,” says Suna Zoabi, founder of mental health platform Tawazon. “I can’t enjoy food, feel joy, or live normally.”

Based in Jerusalem, she is far from the site of war, but she is emotionally affected. And although her business has been growing in the last two years, providing mental health services and support to schools in Jerusalem and Palestinian villages, she says that life has been difficult. “It’s not impacting me financially, but emotionally, yes. It takes a lot of energy to uplift ourselves.”

NORMALIZING THE ‘UNNORMAL’

Palestinian entrepreneurs are finding ways to cope with the reality on the ground. Mohammed Alnobani, co-founder of The Middle Frame, a photo stock photography platform from the Arab world, had to relocate twice to continue growing the startup. He first moved to Jordan soon after the war broke out, where he received funding from Flat6Labs, and then to Egypt, to be in one of the largest markets in the Arab world.

While his co-founder is based in Ramallah, he believes being in Egypt is necessary to grow the business. “Our market is mainly in Egypt, and half of the team is in Egypt,” he says. “It helps being on the ground and connecting with the ecosystem. It also gives you the chance to carry on. To continue a little more normally, to go out at night and be with your friends on the weekend. You get out of it. In Palestine, there is no way out of it. You are 24/7 in it. You don’t know what you’re going to face next.”

Yet, he constantly follows the news and stays in touch with his family daily. He wants to be there for them and ensure their safety, but it still takes a toll on him. “It’s intense to hear difficult news and yet be able to continue your day normally, go into meetings, and meet deadlines,” he explains. “We talk a lot about mental health, but it’s not normal to be normal in such a situation.” 

RESILIENCE TO KEEP GOING

The Palestinian economy contracted substantially after the war. According to the International Labor Organization (ILO), the GDP in Gaza dropped by 84.7%, and in the West Bank, it contracted by 21.7%. While many businesses in Gaza are no longer standing, some companies in the West Bank are also struggling to stay operational, experiencing a loss of clients and reduced sales.

Before the war, Kathrine Tinggaard Nicolaisen, the Danish founder of Olives and Heather, a marketing agency based in Ramallah, had enough work lined up for six months. The agency was busy providing marketing services to startups, everything from website development to campaign management and lead generation, to support them in growing locally and globally.

But all that changed when the war started. “After October 7, everything just drastically changed,” she says. “We literally lost every client overnight. Our whole pipeline became worthless because everyone we were talking to was directly affected by the situation, including funding freezes or defunding in general. I went from having six months of work lined up to having nothing.”

Nicolaisen was able to resume workflow after prioritizing business development, allowing her 15-member team to continue offering marketing services to clients.

Despite such setbacks, Christina Ganem, co-founder of Kenz, an e-commerce intimate wear platform for Arab women, believes it’s important for founders to carry on. According to her, it’s an act of resistance. “We don’t only want to be remembered or thought of in times of bloodshed and grief,” she says. “We are more than that. We must also celebrate our existence and our success. Because at the end of the day, our success is an act of resistance.”

For startups to keep going, however, they need financial support. 

“Palestinian entrepreneurs don’t need more training, but they need cash to burn through to build their businesses like any startup anywhere else, but they don’t have access to that,” says Nicolaisen.

While there has been more global awareness and support for the Palestinian cause, Ganem says it hasn’t translated to the business landscape yet. As the region’s startup ecosystem starts seeing massive growth, particularly in the UAE, Saudi Arabia, and Qatar, she hopes this will create more opportunities for Palestinian founders. 

“The skill set is there,” she says. “So, it’s about finding VCs or private equity companies willing to take that chance. And even though it’s risky, I think a lot could be done regionally.”