Entrepreneurs in Tunisia have found a path to success — and it stretches far beyond their homeland.

In January, Africa saw its largest startup acquisition to date when German biotech company BioNTech purchased Tunisian-founded artificial intelligence firm InstaDeep for $682 million. Six months later, Tunisia’s tech scene had another reason to celebrate when Swedish software firm Medius acquired fintech startup Expensya for an undisclosed amount.

The two deals have something in common: Both the acquired companies were founded in Tunisia, but strategically targeted customers in international markets such as the U.K., the U.S., and the European Union.

“Tunisia’s market is very small, so any company would very quickly move internationally.”

More and more Tunisian tech entrepreneurs are now realizing that focusing on customers outside their small country is the way to succeed, Karim Jouini, co-founder and CEO of Expensya, told Rest of World.“Tunisia’s market is very small, so any company would very quickly move internationally,” he said.

“Working with elite international customers made us realize that we could add value to our partners and that as a digital business, we could innovate as much (and sometimes more) than competitors based in Silicon Valley or Asia,” Karim Beguir, InstaDeep’s co-founder and CEO, told Rest of World. “It literally opened up our eyes to the scale of the opportunity and encouraged us to aim high.” InstaDeep, started by Tunisian founders Beguir and Zohra Slim in 2014, has customers across Europe and the U.S. Among its major clients is Germany’s Deutsche Bahn, the biggest railway company in Europe. In 2015, InstaDeep shifted its headquarters to London. It now has offices in Paris, Dubai, Berlin, San Francisco; and Cambridge, Massachusetts — besides its African offices in Tunis, Lagos, and Cape Town. Meanwhile, Expensya’s customers include two of the biggest banks in Europe — BNP Paribas and Groupe BPCE — as well as Swedish carmaker Volvo.

Tunisia’s location and its successful, high-profile diaspora work in favor of entrepreneurs who have international aspirations, Salma Baghdadi, startup ecosystem director at state-owned investment firm Smart Capital, told Rest of World. It’s just a two-hour flight away from many European countries, and five hours from those in the Middle East and sub-Saharan Africa. Tunisia is also a great place for startups to test ideas, invest in research and development, and then expand to new markets, according to Baghdadi, also lead convenor of the Tunisia Startup Act. “[A startup] addressing only the Tunisian market [of 12 million people] is missing an opportunity to scale its innovation to larger and more mature markets,” she said.

Tunisian businesses won’t easily pay for the services that startups like InstaDeep or Expensya provide, according to Cyrine Ben Fadhel, investment manager at early-stage investment firm Seedstars. “Businesses in Tunisia would rather keep the profits they get in their pockets, rather than invest in tech or improving their process,” she told Rest of World. “So what [startups] do is directly build for global companies.” She pointed to the example of nextProtein, a Franco-Tunisian agritech startup that makes alternative protein and sells only to European customers.

InstaDeep’s Beguir said his company moved towards clients in the U.S. and Europe because there were few local takers for their offerings. 

It is hard for enterprise companies to scale across Africa, Khaled Ben Jilani, senior partner at AfricInvest, an early investor in InstaDeep, told Rest of World. “For enterprise-based models, Africa offers only limited potential for scaling beyond a critical size. Hence the necessity to look beyond African markets, often into Europe and the U.S.,” he said.

Startups focusing only on the domestic market also find it difficult to secure funding, Ezzedine Cherif, founder of now-defunct Tunisian carpooling startup Split, wrote in a recent article. “The infamous Tunisian bureaucratic hurdles take away precious time from founders that should relentlessly be learning and iterating from their first Tunisian users,” wrote Cherif, now the head of growth at London-based AI firm OneShot. 

“[The Tunisian] government does not buy from startups,” Amel Saidane, co-founder of venture firm Betacube, told Rest of World. “Having European references gives them more credibility for fundraising conversations internationally.”

But even as Tunisian startups look overseas for customers, they don’t want to exit the country completely, mainly for its affordable and strong technical talent pool. “We found Tunisia to be a great place to hire deep tech and software talent, thanks to the strength of local universities in applied math and computer science,” Beguir said.

Save Your Wardrobe, a British-Tunisian fashion tech startup headquartered in London, works with international brands like Hugo Boss and Zalando, but the bulk of its team is still in Tunisia, co-founder and CEO Hasna Kourda told Rest of World.  “Only about a dozen of us are in the U.K. and over 30 people — the tech team — are in Tunisia,” she said.

But overseas expansion from Tunisia is not for everyone. According to Betacube’s Saidane, most entrepreneurs who have found success outside of Tunisia have previously lived abroad, and have passports and networks in other countries.

InstaDeep’s Beguir worked as an engineer in London before returning to Tunisia to start his company in 2014. He now lives in London. Expensya’s Jouini worked at Microsoft France before becoming an entrepreneur — he currently splits his time between Paris and Tunis. Kourda of Save Your Wardrobe spent some time studying and working in France, and now runs her company from London. “Local founders are underprivileged in that sense and have to struggle with basic challenges, unless they are on a very niche emerging tech that manages to connect with global communities — [for] example, Web3,” Saidane said.