2017: The year of the unicorn?
Unicorns are the stuff of legend, typically depicted as horse-like creatures with a spiralling horn on its forehead, which is imbued with power, and a symbol of grace.
Which exactly describes what business "unicorns" are: those that are so rare to find and have galloped to strength and success.
The UAE, especially Dubai, has positioned itself with various entities and multiple incubators that have opened up, which speak volumes about how the startup ecosystem is growing in this country in a fast-paced manner.
The country is making headway as a "significant incubator" of technology companies in the region, following bold initiatives launched by the government last year. It is expected that more and more venture capitalists and angel investors will establish base in the UAE, which will help raise more startups in the emirate this year.
And they're apparently just getting started.
"Just recently at an awards ceremony, digital businesses were the stars of the show, taking around a third of all the awards," Jon Richards, chief executive of compareit4me.com, told Khaleej Times.
"Of course, new technologies and Internet services have played their part in this, but I think it's more to do with the fact that we now have an incredibly talented ecosystem of entrepreneurs in the region. Many of these guys have expertly adapted existing business models to this pretty unique region, and we're starting to see the results of that now," he added.
Bluntly, startups are everywhere. And the race is on to achieve unicorn status.
According to a new report from CB Insights, a research firm that tracks private companies, investments and acquisitions, 32 most well-funded tech startups in the UAE have raised $2.3 billion in funding since 2013. Noon.com, the recently-established e-commerce startup spearheaded by Emaar Properties chairman Mohamed Alabbar, was at the top of the list with $1 billion funding raised in November last year. The new venture is expected to start its operations soon.
Referring to fast-growing ride-hailing company Careem Networks and e-commerce firm Souq.com, the report further said that the UAE is now home to two unicorn companies that each hit the $1 billion valuation mark in 2016. Careem reached unicorn status in December while Souq.com received a billion-dollar valuation last February.
As at this writing, CB Insights' real-time unicorn tracker lists 186 companies in the world that are classified as such, with a total cumulative valuation of $666 billion. (Still not enough, though, to match Apple's head-scratching value of over $700 billion.)
Can unicorns live in the UAE?
Experts say that with UAE startups having joined this elite club, the emirate has the potential to expedite growth in this segment and be a stable for unicorns, thanks especially to the government's ramped-up efforts to support startups and entrepreneurs in 2016 through a number of successful initiatives, such as The Future Accelerators and The Dubai Startup Hub, among others.
So, yes; not only can unicorns live in the UAE - they can multiply.
"There are so many avenues that have opened up, so many incubators that have started, which are ready to promote an idea, promote a startup and even provide funding," Geet Bhalla, chief executive and co-founder of HolidayMe, said.
"Today's environment is far more conducive than what it used to be 10 or 15 years back."
The CB Insight report further noted that the most active investor in the UAE's most well-funded tech startups by number of deals is venture firm Wamda Capital, followed by Beco Capital and STC Ventures. It said about 40 per cent of startups have raised between $500,000 and $2 million, and most of the firms are e-commerce-focused.
All 32 startups mentioned in the CB Insights report are based in Dubai, reflecting the fact that the emirate is emerging as "startup destination" in the region due to strong support from the government, along with excellent infrastructure and tech facilities.
"Like every ambitious startup, [Dubai] moves forward at an accelerated pace and we're lucky to be led by such visionary thinkers," Tanaz Dizadji, founder and chief executive of Insydo, said.
The emirate is definitely making its mark on the global map when it comes to forward-thinking cities and entrepreneurial environments, he stresses.
"Dubai is advancing rapidly and the government is investing in setting up an infrastructure that harnesses talent and entrepreneurship, so you see how it will thrive as a knowledge-based city and, potentially, a digital powerhouse on the global stage."
Idriss Al Rifai, chief executive and founder of Fetchr, said that tech start-ups in the Mena region have a huge growth potential as the market here is growing quickly and the population is becoming tech-savvy and demanding products and services that will meet their needs on the go.
"Customers all over the Mena region - close to 80 per cent - now have smartphones and are demanding products and apps that will meet their needs," he says.
"There is a huge potential in the market to innovate for tech companies and now would be the ideal time to do this."
It is not, though, without challenges. But with a little creativity and hard work, it'll all fall into place.
"The [Middle East] is a bit different, both culturally and infrastructure-wise from the rest of the world. In most parts we don't have good maps or good addressing systems that you might find handily in Europe or the US," Mudassir Sheikha, co-founder of Careem, says in an interview.
That difference had Careem's hands full - but they were able to figure it out.
"It's a big challenge to operate a service like ours without a reliable mapping system. So we've had to go out and build our own locations database that makes it easier for our customers and our captains [Careem drivers] to find locations and find each other," Sheikha points out.
Nothing is unachievable if you have the strength and determination of a unicorn, they seem to say.
So, don't be surprised if you see more unicorns trudging around in 2017. As Richards put it: "2017 could very well be the Middle East's year of the unicorn."
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