Today, the words Silicon Valley are synonymous with technological innovation, but this wasn’t always so. The heavily logoed chunk of Northern California was wrought into the world’s tech capital, bit by laborious bit, by entrepreneurs at Intel Corp. and other pioneering companies, as well as academics at tech-friendly institutions such as Stanford University.

With the Valley’s examples to guide them, can other regions of the world sprout their own startup Shangri-La? Localities from Brazil to Bahrain in the Middle East are working to build unique technology hubs. Without the Valley’s deep venture-capital pockets, they may progress on mileage from grass-roots grit and state-level support.

Bahrain, for one, has its government fully backing its ambitious new tech initiatives. This is in contrast to the situation in the U.S., where regulators are increasingly pushing back against powerful tech corporations. It is truly a nation-wide agenda, with government agencies, founders, private entities, and investors all working toward the same goals, according to Saleh Abbas (pictured, right), marketing and outreach manager at Flat6Labs, a startup accelerator and investor in the Middle East and North Africa region, or MENA.

“Because we’re a small country, we have a government that’s incredibly reactive,” Abbas said. “So the regulatory authorities are very close with the startup ecosystem.”

Where else can one find an investor with an official government mandate to fund 42 companies in three years? Bahrain’s Labor Fund (Tamkeen) is backing Flat6Labs’ accelerator program operating six locations and two upcoming ones in MENA. Tamkeen has tapped Flat6Labs to bolster startups with solutions to important issues facing the Bahraini market as part of a broader national mission to diversify and transform the nation’s economy. 

This is a major advancement in financing infrastructure for tech companies, which the region has historically lacked, according to Abbas. Over the last year in Bahrain, Flat6Labs has invested in 23 startups in key areas and is looking to add six to eight more every six months. “We’re slowly starting to see each vertical fill up with relevant startups and get a bit more saturated,” he said. 

Abbas and Sam Dolbel (pictured, left), co-founder and chief executive officer of Sinc Ltd. spoke with John Furrier (@furrier), host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during the AWS Summit Bahrain event. They discussed the unique conditions in Bahrain making it fertile terrain for early-stage startups (see the full interview with transcript here). And in a separate interview at the event, Furrier spoke with Abdullah Almoaiqel, co-founder and partner at Rain Management WLL, a startup aimed at transferring cryptocurrency profits to banks cheaply and compliantly (see the full interview with transcript here). (* Disclosure below.)

This week, theCUBE spotlights Bahraini companies Fast6Labs, Rain Management and Sinc in our Startup of the Week feature.

Watch the complete video interview with Sam Dolbel and Saleh Abbas below:

Education, cheap infra feed, and water innovation

Bahrain is not expecting hordes of seasoned entrepreneurs to simply parachute onto its soil. It is working from the ground up toward a more tech-savvy future. Amazon Web Services Inc. recently opened its Middle East Cloud Region in Bahrain. And it has collaborated with the University of Bahrain to design certificate and four-year bachelor of science programs in cloud computing.

AWS has been involved in numerous initiatives in Bahrain — and around the globe — to propel innovation forward. “You walk into a country, and they have zero idea how to become a digital nation, [so] you have to — through your influence and your experience — really educate them on what are the elements,” Teresa Carlson, vice president of the worldwide public sector at AWS, told theCUBE.

Training and affordable infrastructure go a long way toward raising a nation’s tech quotient, according to Carlson. At the Brazilian Embassy some time ago, she spoke to a 23-year-old AWS devotee. “She said, ‘I created my first gaming company at 16 and sold it at 18 for some millions.’ And she was, like, in her third company,” Carlson stated.

This young woman’s success wouldn’t have been possible through old paradigms requiring big early investments in hardware, Carlson pointed out.

Bahrain says, ‘Yes,’ to transitioning, early-stage entrepreneurs

Fast6Labs is unique for its interest in guiding Bahrainis from typical nine-to-five jobs into entrepreneurship, according to Abbas. It clears away three major barriers they typically face by offering a business-development network, mentoring and capital.

If the country can’t fill its burgeoning tech sector with Bahrainis, it might attract foreigners with a number of perks. Abbas regularly makes the rounds at global tech conferences to proselytize to early-stage startups.

“Bahrain is in a very unique position where we have a cultural mindset that is very easy for a lot of foreigners and expatriates to adapt to. I think we’ve even been ranked number one in the world as a place for expatriates to live, several times,” he stated.

The sky-high GDP in Silicon Valley is matched by sky-high rents. Cash-strapped rookie entrepreneurs may find that Bahrain offers a more economical launch pad for their companies. Lower rent and employee-salary expectations can slash startup expenses, for example. In fact, subsidies are available to companies that hire newly graduated Bahrainis. The low cash burn allows young startups to extend their runway and reach a stage where they can attract serious investors, Abbas pointed out.

Abbas persuaded Sinc — one of the 23 startups in which it’s invested — to relocate to Bahrain. Sinc makes software for employee management.

“The access to talent here is just amazing, the costs are very low, and we’re able to do a lot with a very small amount of money. So far, we’ve got to a total of four-and-a-half thousand U.S. businesses using the platform. And we’ve done that all here from Bahrain,” Dolbel told TheCUBE.

Regulators and innovators make friends for fintech

FinTech is one area where Bahrain is not playing catch up. The country is an established financial center in the Middle, and Central Bank of Bahrain already had a fintech unit in 2017, ahead of other banks around the globe, Abdullah Almoaiqel, co-founder and partner at Rain Management WLL, told theCUBE.

The CBB helped Almoaiqel and his colleagues hone Rain — a startup aimed at transferring cryptocurrency profits to banks cheaply and compliantly. “We joined the Bahrain Central Bank’s regulatory sandbox, which allowed us to experiment and test whether we can do this in a safe and secure way,” he explained.

CBB’s sandbox program is designed to speed innovative technologies through the regulatory checkpoints that often stall them.

“A sandbox is really a controlled, live-bound, time-bound environment enabling startups, as well as existing financial institutions, to test out their innovative solutions under the strict supervision of the regulator — without being required to abide by full regulatory requirements — directly with volunteer customers,” Yasmeen Al-Sharaf, head of the fintech and innovation unit at CBB, told theCUBE.

The sandbox has hosted 35 companies since 2017; Rain is one of two that have graduated. CBB has since drafted regulations for crypto-asset exchanges and brokerages, allowing Rain and others to innovate and operate under clear guidelines. Rain has many retail customers and expects to add more institutions in the future.

The AWS Cloud Region will be a boon to Bahrain’s already lively fintech, Almoaiqel believes. “We see a lot of excitement here from entrepreneurs in the region. Especially with regulation, having customer data stored here in the region, it’s really going to help a lot of entrepreneurs also mitigate any downtime from hosting it in other places,” he concluded. 

Watch the complete video interview with Abdullah Almoaiqel below, and be sure to check out more of SiliconANGLE’s and theCUBE’s coverage of the AWS Summit Bahrain event. (* Disclosure: TheCUBE is a paid media partner for the AWS Summit Bahrain event. Neither Amazon Web Services Inc., the sponsor for theCUBE’s event coverage, nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE