Confidence in the UAE's technology sphere remains high, with the country holding fast to its position as the leader in driving digital startups across the region in 2017, both in terms of number of investors and deals.
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, said that a persistent focus on innovation and government initiatives to create a variety of new investment opportunities are reinforcing the UAE's position as the region's entrepreneurial hub.
"Greater transparency across processes and regulations along with innovation and emphasis on sustainable business growth have significantly improved investor confidence in the emirate. The emirate is also pioneering digital innovations in the region as part of a national initiative," he said, highlighting the 'The State of Digital Investments in Mena 2013-2017' report.
- Economic Participation of Saudi Females Rises While Unemployment Rate Remains Stable
- Saudi, Dubai and Abu Dhabi on the Top ‘Most Wanted List’ for Hotels in the Middle East
"Artificial intelligence (AI) and blockchain are already redefining existing service models and processes, while also transforming the entrepreneurial landscape. Dubai and the UAE provide the ideal platform for innovative entrepreneurs and digital startups to grow globally. We are already seeing successful outcomes," he said.
Citing the results of the report - which was jointly prepared by Dubai SME and ArabNet - Omar Christidis, founder and CEO of ArabNet, said: "One in three investors in the Middle East and North Africa region are based in the UAE."
The report revealed that the UAE retained its regional leadership for the fifth year now, and accounted for 32 per cent of all Mena investors. Together with Saudi Arabia, Lebanon and Egypt, it also contributed to 70 per cent of all investments in digital startups in the region in 2017. While the UAE attracted 298 digital startups, the three countries ranked below it averaged 155. Digital startups in the region witnessed a fruitful 2017, attracting around $650 million. Of this, 76 per cent went to UAE-based startups, most of which was mobilised by Careem and StarzPlay.
Christidis noted that as the digital landscape in the UAE, and the wider Mena region, continues to mature, and companies seek to explore technologies such as AI and the Internet of Things (IoT), the investment landscape will continue to flourish. The number of tech investors in the Mena region continues to grow steadily, with a compound annual growth rate of 31 per cent for the period between 2012 and 2017. The ecosystem witnesses around 40 new funds per year between 2015 and 2016 and around 30 new funds in 2017/2018 year-to-date.
"Almost every country in the Mena region today has an accelerator; its the most common type of investment institution, and almost always the first type of investment option to be launched," he said. "Last year, we saw some mega rounds for Souq.com and Careem that really drove the total value of investments. Most of the large deals continue to take place in the UAE."
"Arab and Middle East entrepreneurs and investors eager to capitalise on emerging technologies see Dubai and the UAE as a remarkable opportunity. With Dubai firming up its position both as a destination of choice and a smart city, investors will be exploring further investments in this area," said Abdul Baset Al Janahi, CEO of Dubai SME.
He added that the trends revealed in the report are particularly encouraging in view of the Dubai SME 2021 Strategic Plan's aim to create more support systems to enable outstanding SMEs to grow globally. "Almost one-third of the region's investment funds focused on startup growth are now based in the UAE. Startup accelerators across the region have also grown 16 per cent."
The report also shed light on the fact that in the past few years, technology-based models have been steadily increasing. In 2017, technology based businesses witness a spurt in number of investments with a rate of increase of 80 per cent from 2016 to 2017. Technology startups in the fields of finance and healthcare are gaining the most traction in 2017.
By Rohma Sadaqat
Copyright © 2022 Khaleej Times. All Rights Reserved.