New report says MENA digital start-ups attracted $650m in funding in 2017, with 76% based in the UAE
Digital start-ups in the Middle East and North Africa attracted $650 million of funding in 2017, with 76 percent going to UAE-based firms, according to a new report.
The State of Digital Investments in MENA 2013-2017 report, jointly prepared by Dubai SME, the agency of the Department of Economic Development (DED), and Arabnet, said the UAE continued to be the leader in driving digital start-ups across the region, both in terms of number of investors and deals.
The UAE accounted for almost one-third (32 percent) of all MENA investors. Together with Saudi Arabia, Lebanon and Egypt, it also contributed to 70 percent of all investments in digital startups in the region in 2017.
The report said the UAE attracted 298 digital startups while the three countries ranked below it averaged 155.
Overall, MENA digital startups had an impressive 2017, attracting around AED2.39 billion ($650 million). Of this, 76 percent went to UAE-based startups, most of which was mobilised by Careem and StarzPlay.
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and chairman of The 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.
Sheikh Hamdan said the outstanding investor response and rankings that Dubai and the UAE have received regionally and globally validate its knowledge-economy strategies as envisioned in the UAE Centennial Plan.
He added that Dubai will continue to offer a globally competitive environment for innovation and further enhance ease of business to cement its position as a preferred investment destination in line with the Centennial Plan and the Dubai Plan 2021.
“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,” the crown prince said.
“Artificial intelligence 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 added.
“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.
Al Janahi added that the trends revealed in the report are particularly encouraging in view of the the Dubai SME 2021 Strategic Plan’s aim to create more support systems to enable outstanding SMEs to grow globally.
Although venture capital represents 25 percent of all investors in digital ventures in the region, the fastest growing investor segment over the past five years has been corporate investors, of which the UAE has the highest share (39 percent).