The Middle East and North Africa (MENA) region is fast becoming the leading regional hub for ambitious tech innovators. While mature markets like the US, India and China are already saturated with technology innovators and investors, MENA is rich in opportunity still to be seized.
Ideally located in the heart of the region, and already home to a vibrant community of start-ups, there is no better location from which to take advantage of this opportunity than Dubai.
Regional and international investors and innovators alike are beginning to sit up and take note of emerging markets. Between 2020 and 2021, the Middle East saw a 132% increase in funding activity with a total of 410 deals, according to Magnitt’s recent Emerging Venture Markets Report– and global giants are making moves, with the likes of Microsoft, Google and Amazon announcing recent regional investments.
“The Middle East is a nascent market with lots of opportunity, high digital penetration and a young population open to innovation and exploring growth opportunities,” says Mohammad Alblooshi, sector head of fintech and innovation at Dubai International Financial Centre (DIFC).
Dubai is at the heart of this exciting market. Located within a five-hour flight of 2.2bn people, Dubai offers unmatched market access and serves as a bridge between the leading financial centres of London and New York in the West, and Hong Kong and Tokyo in the East.
The emirate is proving itself as a gateway to growth markets and a focal point for international trade for ambitious businesses. Dubai-based ride-hailing company Careem was acquired by Uber for S$3.1bn, and award-winning payments platform PayTabs is rapidly scaling operations in the region and beyond. Last year, transport technology start-up Swvl became the Middle East’s first $1bn-plus unicorn to be listed on Nasdaq.
“Dubai is a regional hub for emerging tech companies looking to start or scale up,” says Alblooshi. “For anyone who wants to do business in the Middle East, Dubai has successfully positioned itself as a prime location.”
Forward-thinking, innovation-friendly and future-ready, Dubai’s leadership recognises the value of start-ups as a key pillar of economic growth and job creation, and is committed to encouraging them. The emirate is driven by an ambition to pursue technological excellence by adopting emerging technologies and introducing innovation-friendly regulation.
Businesses in Dubai can access unmatched funding opportunities. Within the MENA region, the UAE ranks as the most active market. Magnitt’s 2021 report shows that UAE-based start-ups received the most total funding and generated the highest number of deals. They raised $1.2bn, a 93% increase in investment activity compared with 2020.
In 2021, Dubai-based businesses received some of the biggest funding rounds in the region. Dubai-based NOW Money raised $7m, one of Q1’s top five fintech funding rounds, which is being used to expand its operations. In August, Tabby closed a $50m funding round to expand into new markets from its Dubai base1.
Businesses also benefit from unparalleled high-quality infrastructure. Dubai is home to Jebel Ali port, the Middle East’s largest trans-shipment hub, as well as the world’s busiest airport.
The emirate of Dubai is renowned for its outstanding quality of life, making it a hotspot for global talent. Having been ranked the best city in which to live and work in MENA by Kearny’s Global Cities report for eight consecutive years, and being home to a vibrant expatriate community, Dubai continues to attract and retain talent from across the world. According to the IMD World Competitiveness Centre’s World Talent Report, the UAE remains the top-rated country for tech talent in the Arab world. Dubai businesses have this talent pool at their fingertips.
The Chamber of Digital Economy in Dubai was recently set up to develop a digital-centric economic growth plan, focused on attracting investment, international talent and entrepreneurs.
DIFC: at the heart of innovation
Located in the heart of the city of Dubai, and governed by a unique legal and regulatory framework, DIFC is ideally suited to push the start-up mandate.
A powerfully enabling financial centre, DIFC helps to ease the challenges of entering a new market, from legislation to licences, and provides a wealth of resources to accelerate the development of burgeoning start-ups and scale-ups.
DIFC is home to more than 3,600 active companies, including in excess of 1,100 active financial entities and more than 500 fintech and innovation entities, ranking in the top 20 financial centres globally. Within the Middle East, DIFC is the most enabling jurisdiction for innovative start-ups.
The community includes stakeholders ranging from early-stage entrepreneurs to big tech companies, unicorns and sovereign wealth funds. This community is nurtured within the Dubai Future District and DIFC Innovation Hub, which hosts inspiring knowledge-sharing events on a monthly basis, including the recent Blockchain week. The Innovation Hub has grown almost 100% in the past year, and is now home to 500 start-ups. DIFC aims to host 1,000 companies by 2023, making it one of the largest start-up communities in the world.
The centre is overseen by an English common law jurisdiction and business-friendly regulation including unique IP laws and globally compatible data protection laws designed to empower innovators.
Companies benefit from zero tax on business income and profits, 100% foreign ownership and no restrictions on foreign exchange or capital repatriation. Entrepreneurs can access licencing subsidies, all designed to reduce friction for newcomers.
“We have mega plans for expansion,” says Alblooshi. “Among other projects, we are investing millions as we speak to expand the physical infrastructure to accommodate growing demand. From a legislation perspective, we keep enhancing it to address what is required by the market.”
There is outstanding opportunity to be seized in the Middle East, and Dubai is the place to be for the start-ups, investors and financial institutions of today and tomorrow.
To find out more about opportunities in Dubai, click here.
1 Source: Tarabut Gateway