Dubai start-ups raised more than $2bn in funding last year, according to a report by the Chamber of Digital Economy.
The start-up funding is a boost for the UAE’s digital economy, which is expected to be conservatively valued at more than $140bn (from today’s $38bn).
The news was reported as the Chamber of Digital Economy launched its third report on the emirate’s digital economy.
Dubai digital economy
The “Dubai’s Venture Capital Ecosystem” report provides an overview of the investor landscape backing the start-ups and scale-ups that are transforming the city and the MENA region.
According to the report, a total of 749 scale-ups across the MENA region (excluding Israel), have raised a total of over $19.5bn cumulatively over the past decade (2012-2022), with UAE scaleups accounting for 65 per cent of total cumulative capital raised across the region.
Today, Dubai is home to more than 40 per cent of the MENA region’s scale-ups, with 306 scale-ups calling the emirate home.
Dubai still accounts for more than 90 per cent of all scale-ups in the country, which is home to 338 scale-ups in total.
Dubai’s 306 scale-ups have raised more than $11.7bn in funding over the course of the past decade, which represents an impressive 60 per cent of the MENA region’s total cumulative fundraising total.
In addition, in 2022, Dubai-based start-ups doubled-down on their prior year results, fundraising more than $2bn.
In addition, the growth of funding in the MENA region has exceeded $4bn in 2021 and 2022 and the number of mega-rounds of $300m or more has seen an increasing trend with three seen in 2021 and six in 2022, including two scaleups listing on stock exchanges.
In 2022, there was a significant shift in the number of funding rounds, where scale-ups raised funding, and a trend towards larger cheque sizes and funding bracket gained momentum.
In the $100m to $1bn range, funding rounds increased by more than 100 per cent between 2021 and 2022. Other funding ranges also saw increases between 20 per cent to 87 per cent.
Considering the source of capital raise, venture capital and corporate rounds accounted for more than three quarters of the capital raised, while IPOs and ICOs accounted for nearly equal share.
The number of scaleups have also increased considerably, in Dubai, growing 26 per cent between 2021 and 2022.
In terms of absolute numbers, Dubai saw an increase of 64 scale-ups between 2021 and 2022 growing from 242 to 306 scale-ups.
Venture funding in Dubai has seen tremendous growth in the past decade. From a time of only seed stage and earlier rounds, Dubai has grown to become the only city in the MENA region to be home to startups to raise funds in Series E and Series F rounds.
Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications, and Chairman of Dubai Chamber of Digital Economy, said: “The UAE’s advanced digital ecosystem has accelerated the development of the entrepreneurship sector and contributed to significant growth in its activity.
“The country’s proactive vision in developing legislation and initiatives in the digital field creates a favourable environment for startups and fast-growing companies, which has attracted unicorn companies and investors from around the world and consolidated the UAE’s position as a global hub for the digital economy.
He added: “The results in the report reflect our long-term commitment to developing smart digital solutions and deploying these to build a new and future-facing model for the economic sector in the UAE, and Dubai in particular, and underline the emirate’s position as a global capital for the future economy.”
As Dubai sets its sights on becoming the global destination of choice for digital entrepreneurs, the Chamber of Digital Economy is tasked with attracting leading tech companies, start-ups and scale-ups that can support digital ambitions.
The chamber was created to build the world’s best digital infrastructure and transform Dubai into an international technology hub.
With a series of visionary initiatives and investments in cutting-edge technology, Dubai is well on its way to achieving its ambitions. From its world-class fibreoptic network and cloud-based systems to its innovative approaches to smart city development, Dubai has set the standard for how cities can leverage technology to enhance the lives of its citizens and attract global businesses.
Just one recent example is the opening of the Moro Hub in February 2023, world’s largest solar-powered data centre.
The 100-MW facility is a Dubai 10X initiative, which is an innovative program launched by Sheikh Mohammed bin Rashid Al Maktoum in 2017. The initiative entails government entities creating disruptive, exponential change, placing the city 10 years ahead of leading global cities.
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