Last year was a record-breaking year for venture capital investment in emerging venture markets including Africa, the Middle East, Pakistan and Turkey, according to the 2022 Emerging Venture Markets Reportbyleading data platform MAGNiTT. International investors and entrepreneurs are seeing unparalleled opportunity for growth, and Dubai stands out as a gateway to the world’s most exciting markets.
“The emerging venture market space has very different dynamics and opportunities than more mature markets like the US and Europe,” says Philip Bahoshy, the founder of MAGNiTT. “The opportunities are still relatively untapped compared to more competitive markets.”
The markets of the Middle East, Africa and South Asia (MEASA) regions have young populations with high rates of digital penetration and technology adoption, giving tech innovators great access to customers. The Covid-19 pandemic has further accelerated digitalisation trends, especially the journey towards cashless, and governments in this region are focusing on innovation as a strategy to solve challenges they face. The trends are positive, explains Bahoshy: “This is becoming a very tech-enabled part of the world,” he says.
Among emerging venture markets, the UAE ranked as the most active in 2021, raising $1.2bn over 155 transactions. Within the UAE, Dubai International Financial Centre (DIFC) provides a world-class ecosystem for innovative companies seeking to tap into growth opportunities.
Dubai, a launch pad to emerging markets
“The UAE and specifically Dubai are well positioned for being a start-up hub,” says Bahoshy. “Dubai provides a perfect location from a lifestyle and logistical perspective. It gives you access to different geographies across the whole of the region.”
Located in the heart of Dubai, DIFC is the MEASA region’s leading financial hub. It is home to leading growth companies, and designed to empower investors and innovators alike. DIFC offers outstanding opportunities for innovative entrepreneurs, including access to the Dh1bn Future District Fund, with the mandate to increase start-up funding and attract venture capital funds to Dubai. Innovators from all sectors can access the Innovation Licence, which comes with subsidised commercial licensing options and co-working space.
The Centre is home to the DIFC Innovation Hub, the largest start-up ecosystem in the region. The hub is an integral part of the leadership’s strategy for economic growth: a thriving ecosystem of stakeholders, from start-ups to venture builders, financial institutions and corporate innovation labs. By bringing diverse stakeholders together through co-working space and a regular events calendar, including Blockchain Week, Talent Week and the AI Festival, the DIFC has built an environment for knowledge-sharing, inspiration and collaboration.
“I am a big advocate for hubs because they allow for cross-pollination of people, ideas and support mechanisms,” says Bahoshy. “In the DIFC Innovation Hub, you can connect and engage with other like-minded founders and service providers, which is a unique proposition compared to other free zones and jurisdictions.”
Entrepreneurs in DIFC share a community with more than 3,600 active companies, including more than 500 fintech and innovation entities. Beyond future financial and innovation companies, DIFC hosts 17 of the top 20 global banks, five out of the top ten asset managers and some of the region’s leading investors, including Middle East Venture Partners and venture capital firm Nuwa Capital.
A story of growth
MAGNiTT recently moved its headquarters to DIFC to continue its growth trajectory from the leading financial hub at the centre of the region.
“Our goal is to continue to scale into all emerging venture markets, with potential expansion into South East Asia and eastern Europe,” says Bahoshy. “Given DIFC’s role as a regulator and the business development goals of attracting venture capitalists and start-ups, we have an opportunity to work together to use data to highlight the growth of the region and the opportunities it creates.”