The Tech Industries in Dubai
The Covid Pandemic & The Startups
- Dubai largely kept its border open, aggressively vaccinated and introduced visas and other policies that have attracted an increasingly mobile international workforce.
- Europe and Asia launching lockdowns through multiple waves of Covid-19, Dubai’s mix of relaxed virus policies, low taxes and relatively light business regulation created an attractive environment for technology startups.
- A Dubai-based venture capitalist and former partner at San Francisco-based 500 Startups.
Crypto Startups
- Ralf Glabischnig, an investor and founder of Crypto Oasis, an organization helping blockchain and crypto startups establish in Dubai.
- Fastest-growing hub globally for crypto technology.
- Tech helped 200 startups—trading cryptocurrencies or building businesses on blockchain—establish in Dubai.
- The world’s largest crypto exchange, Binance, has set up offices in Dubai.
Technology & Relationships
- Dubai has benefited from the United Arab Emirates, new diplomatic relations with Israel, struck in 2020 in a deal known as the Abraham Accords.
- Abraham Accords created opportunities for Dubai to make connections with the already-established tech hub in Tel Aviv.
- Companies from Israel, experiencing a tech boom which are expanding and choosing Dubai for their first regional outpost.
Cloud Kitchens
- Dubai is now home to three tech startups worth at least a billion dollars: Kitopi, a cloud kitchen platform; private aviation platform Vista Global.
- Emerging Markets Property Group, which operates classified listing websites in the U.A.E., Egypt and other countries.
Investments
- Middle East and North Africa tech firms, excluding Israel, quadrupled to $2.87 billion last year, compared with $654 million in 2020, with roughly half that investment flowing into the U.A.E.
Funds
- Chief executive officer of London-based investment firm Hambro Perks, which has launched a fund to invest in startups in the Middle East.
- Three India-based executives at Sequoia Capital moved to Dubai during the pandemic, where they obtained long-term permits to move freely in and out of the city.
- Effective extension of Sequoia Capital India to Dubai helped produce the venture fund’s first investment in the Gulf region.
- California-based Sequoia’s India-focused fund in January led a $33 million early-stage investment in a Saudi-based fintech startup.
- Sequoia’s Europe-based team invested last year in Egyptian fintech startup Telda.
Role of SoftBank
1. SoftBank Group’s Vision Fund 2 in July led a $415 million investment in Kitopi.
2. SoftBank did a $125 million deal for a stake in Saudi Arabian customer-engagement platform Unifonic.
3. Investment firm, backed with $60 billion from Saudi and U.A.E. sovereign-wealth funds, established a presence in Abu Dhabi in 2018.
4. SoftBank waited for deal flow to pick up, and now sees more sophisticated entrepreneurs running Gulf-based companies of a significant-enough size.
5. SoftBank passed on investing in Kitopi in an earlier investment round, but it kept in touch with the founders and invested when the firm grew to operate more than 60 cloud kitchens across the U.A.E., Saudi Arabia, Kuwait and Bahrain.
6. Region’s sovereign-wealth funds such as Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Co. are also taking direct stakes and seeding local venture-capital firms.
Big Money Checks
Coming in from Silicon Valley VCs or global VCs who see this as the next emerging region.
Tech Companies & Popultaion
- Arab world has a young, tech-savvy population, but it traditionally has been a source of capital for investors rather than a place lauded for its entrepreneurs.
- Frequent conflicts have put off investors, and Saudi Arabia, the biggest economy, opened up economically and socially only in recent years.
- Investor interest in the Arab world remains dwarfed by venture-capital investment into the U.S., Asia and Europe.
- Israel startups attracted more than $25 billion last year.
Aim
- U.A.E. has a stated aim of becoming home to 20 tech companies worth $1 billion or more by 2031.
- Offering 100,000 “golden visas,” or permits that allow entrepreneurs and technology investors to live in the country for up to 10 years, longer than regular visas.
- U.A.E. has set up a national small-business program to help startups find funding, partner with established companies and market their products overseas.
Dubai Startups
- Have had exits, such as Uber Technologies Inc.’s purchase of local Dubai rival Careem, and Amazon Inc.’s 2017 purchase of e-commerce site Souq.com, that have emboldened former employees to start their own companies.
- Companies are setting up in Dubai but focusing on the wider region. Swvl Technologies Inc., which listed last year in a deal with a special-purpose acquisition company that valued the Dubai-based tech firm at roughly $1.5 billion, does ride-hailing service for taxi-vans, but its operations are focused on Egypt, Pakistan and Kenya rather than the U.A.E.
- Capiter, is based in Cairo, but has an office in Dubai because the city is good for hiring and raising capital.
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