When we started JadoPado in September 2010, the technology space in the region was virtually non-existent, save a few valiant efforts. Today, we have startup accelerator upon accelerator and a plethora of service providers looking to get a piece of the action. Every free zone operator worth their salt has thrown their hat in the ring to sign up entrepreneurs and their budding ventures.

The funding climate has improved significantly, driven by accelerators and seed funds. Where previously it was next to impossible to get any sort of funding unless you'd spent a decade or more networking in the space, seed funding is now relatively easily available, with a wide variety of investors willing to write small cheques.

The challenge, however, is if you are looking to scale up and bring on anything more than $5 million into your business. While to other industries this may seem like a significant amount of money - and it is - the very definition of a technology startup as a vehicle to grow quickly to capitalise on an opportunity requires large amounts of capital to create and maintain forward momentum.

Unfortunately, not only are the options limited, but they remain near impossible to find. Institutional investors, private equity houses and family offices in the region have found it difficult to make direct investments in technology due to the inherent non-physical nature of the product. It's difficult to assess quality and performance if you're unable to see, touch and feel the outcome. It remains a skill that regional investors are yet to acquire.

The poor regional funding climate has resulted in the largest e-commerce players in the GCC all being owned overwhelmingly by investors from outside of the region.

Souq emerged from the sale of Maktoob to Yahoo! and continues to lead the e-commerce march. An obvious play for some of the region's powerhouse franchise retailers, New York-based Tiger Global is a significant investor, along with Naspers, a Johannesburg listed South African media conglomerate, who controls 47.6% of Souq as of their last funding round in March 2014. If the rumour mill is to be believed, a new round valuing Souq at $1 billion will push Naspers into majority ownership of the region's largest e-commerce player.

Namshi, an online fashion retailing business, was founded and funded by Berlin-based Rocket Internet. Other top tier European investors soon joined the fray. With an impressive team and relentless execution, Namshi has quickly turned itself into the region's leading fashion experience and is expected to cross $100 million in revenues this year.

MarkaVIP, whose investors include emerging venture capitalists in Europe such as Hummingbird Ventures and Lumia Capital in the United States, more recently attracted Abdul Latif Jameel, a leading Saudi-based conglomerate, to invest a reported $30 million, making it the first time a regional investor has directly invested significant capital into a regional e-commerce opportunity. However, MarkaVIP remains the exception rather than the rule.

Why should the value of GCC consumers and their spending accrue to New York, Johannesburg and Berlin? Inward foreign investment isn't something that I oppose, but I do think it is an incredible shame that as a region we have been unable to replicate our tremendous success in physical retail in the online space, nor are we making enough serious attempts to do so.

Recently, Alpen Capital (PDF) reported that while GCC retail will be an astronomical $285 billion by 2018, only 15% of retailers have an e-commerce presence. If you re-define that presence as best in class, outstanding e-commerce experiences, I'd argue that it is well below 3% of retailers in the region.

This year, e-commerce is expected to be a $7 billion opportunity in the GCC. Over the next 7 to 10 years, e-commerce should conservatively make up between 8% to 10% of retail, resulting in a market opportunity of at least $24 billion to $30 billion.

The challenge for regional retailers is that e-commerce is a globally disruptive force. As transit times decrease and customs barriers reduce, consumers are increasingly shopping around the world from whoever they want to wherever they want. Your store at the mall is suddenly competing with every single retailer on the planet, not just the guy next door.

It's the calm before the storm. We're fast approaching an inflection point before we see significant growth in e-commerce and the birth of new businesses and the opportunity for incumbents to re-define existing ones.

I am hopeful that investors and retailers in the region rise up to the challenges and opportunities that tomorrow will bring.

This post first appeared in the Gulf News on the 28th of April, 2015.