UAE remains top destination for Arab digital entrepreneurs

Dubai - There is no lack of capital in the market: Dubai SME CEO Al Janahi

The UAE has retained its position as the favoured choice for investors in the Middle East and North Africa region, with the country recording over 200 investment deals over the past four years, a new study has shown.
"The 'State of Digital Investment in Mena 2013-2016" shows that the UAE has led the Middle East and North Africa in attracting investments into digital entrepreneurship," Abdul Baset Al Janahi, CEO of Dubai SME, said while launching the report at ArabNet Digital Summit 2017 in Dubai on Wednesday.
"The report reflects the overall strategic focus of the UAE, particularly Dubai, on supporting innovation and investments in digital economy as well as in promoting the country as the preferred choice of Arab entrepreneurs and investors," he said.
"Dubai SME is launching the report in line with our Strategic Plan for 2021, which aims to support young entrepreneurs and enable them to grow and expand to regional and global markets. Our target is to groom a generation of outstanding entrepreneurs capable of carving a niche for the country in global economy," he added.
Speaking on investments and investor interest, Al Janahi noted that there is no lack of capital in the market. "There has been a huge push from the UAE government in this area over the past few years," he said. "Now, there is a need for corporates to get involved as investors. I think that the more corporates that we find getting involved in investments, then the more deal flows we will end up with. We also need to get more universities and other educational institutions involved and encourage them to come up with new ideas that can be taken to the investment stage."
The fastest growing segments of the investor community over the past four years have been corporate investors and venture capital funds. The share of corporate investors in particular has increased by 30 per cent in the past year alone. Meanwhile, early stage investors have decreased as a share of total investors - dropping from 55 per cent to 49 per cent of the total investor pool in the same time period.
Speaking on the occasion, Omar Christidis, founder and CEO of ArabNet highlighted the findings of the report.
Launched in partnership with Dubai SME, the latest edition of the report disclosed that when it comes to the number of deals per country over the past four years, the UAE recorded a total of 234 deals. This is more than double the amount of deals recorded in Jordan, Egypt, Lebanon, and Saudi Arabia, which all hover between 100 to 120 deals.
"The country closest to the UAE in terms of the number of investment deals for the period was Jordan with 118 deals recorded," said Christidis. He also noted that the investor community in the Mena region continues to be heavily concentrated in a few countries.
"The UAE houses about one-third of all investors; while Saudi Arabia and Lebanon combined account for another third. Lebanon also has an exceptionally high number of funds for such a small country, and Egypt on the other hand has a relatively low number of funds for such a large country with so many startups," he said.
The report also disclosed that the number of tech investors in the Mena region has been growing exponentially, with the ecosystem adding on average around 10 new funds per year between 2009-12, accelerating to about 20 new funds per year in 2013-14, and then jumping to about 30 new funds per year in the past two years. Of the 30 funding institutions founded in 2016, 40 per cent are based out of the UAE.
Christidis further revealed that the UAE continues to build a robust investor community, capturing a slightly increasing share of the overall investor market. Lebanon and Saudi Arabia also attracted a rapidly growing proportion of the investor community; and the share of the three markets combined grew from 55 per cent to 64 per cent of investors over the 2013-16 period.
- rohma@khaleejtimes.com