Dubai emerges as Mena’s scaleup hub by accounting for 57% of funding

On a country level, the UAE accounted for the largest number of scaleups (251) which attracted the majority of funding in the region, or 59 per cent, having raised $5.4 billion: Dubai Chamber of Digital Economy



Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications and Chairman of Dubai Chamber of Digital Economy, said the findings of the report reflect ongoing efforts to advance Dubai’s digital economy and create a conducive environment in the emirate for scaleups to thrive and grow. — Supplied photo
Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications and Chairman of Dubai Chamber of Digital Economy, said the findings of the report reflect ongoing efforts to advance Dubai’s digital economy and create a conducive environment in the emirate for scaleups to thrive and grow. — Supplied photo
by

Issac John

Published: Mon 28 Mar 2022, 4:30 PM

Dubai, which has one of the best startup ecosystems in the world, has emerged as a thriving hub for scaleups by accounting for 57 per cent of scaleup funding in the Middle East and North Africa region.

According to a new report prepared by Dubai Chamber of Digital Economy, the emirate is home to 39 per cent of the region’s scaleups.

On a country level, the UAE accounted for the largest number of scaleups (251) which attracted the majority of funding in the region, or 59 per cent, having raised $5.4 billion, said the Chamber report prepared in cooperation with Mind the Bridge and Crunchbase.

A scaleup is basically a company that has advanced from the startup stage by achieving a growth of 20 per cent or more in either employment or turnover year-on-year for at least two years, and ready to use its proven success to scale and grow further. It must have a minimum employee count of 10 at the start of the observation period.

With one of the world’s best startups and entrepreneurial ecosystems, Dubai aims to become home to 20 unicorns worth $1 billion each by 2031. Many startups can offer promising and innovative business models with a potential to reshape the future of global business.

Titled “The UAE Venture Outlook,” the report examined key trends reshaping the maturing entrepreneurial ecosystem in the region, and highlighted the leading roles of the UAE and Dubai in attracting promising scaleups and tech giants.

The number of scaleups in Mena saw exponential growth in 2021, compared to 2020, as 587 scaleups were accounted for in the region by December 2021, compared to 139 in the previous year.

Scaleups in the region have collectively attracted $9.1 billion, representing 0.12 per cent of the region’s GDP. Data shows that a few countries are driving the effort of the MENA region to compete with the top global tech ecosystems.

Dubai, which alone accounted for 57 per cent of funding, is home to a major of the region’s tech giants. Saudi Arabia came second as the kingdom is home to 106 scaleups (18.1 per cent of total) that raised a total of $1.2 billion of growth funds. Egypt ranks third, accounting for 84 scaleups and $1.4B raised.

According to the chamber report, 26 Mena scaleups (4.4 per cent of total) relocated their headquarters inside the region to boost their growth. The UAE was the preferred destination for relocation with eight scaleups setting up in the country, followed by Saudi Arabia with seven, and Egypt (four). Additionally, a total of 41 scaleups opted to expand their footprint beyond Mena, primarily to the US (13), the UK (5), France (5), India (3), and Canada (2).

Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications and Chairman of Dubai Chamber of Digital Economy, said the findings of the report reflect ongoing efforts to advance Dubai’s digital economy and create a conducive environment in the emirate for scaleups to thrive and grow.

The report’s findings indicate that Dubai is achieving considerable headway in achieving the vision of the leadership in positioning Dubai as a global leader in the digital economy. He also said the Dubai Chamber of Digital Economy last year, along with the market research conducted by the Chamber would support the sector’s growth and development.

“Despite its vast competitive advantages, the UAE continues to add more incentives for businesses and startups. The introduction of golden visas, green visas, freelancer and entrepreneur visas are all bold and positive steps the country has taken to boost its value proposition,” said Hamad Buamim, president and CEO of Dubai Chambers.

“Venture capital is a crucial element needed to nurture thriving entrepreneurial ecosystems and advance digital economies. We will continue to work closely with public and private sector stakeholders to ensure a conducive environment for VC firms and investors, as well as entrepreneurs from around the world,” Buamim said.

– issacjohn@khaleejtimes.com


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