The UAE funding landscape is seeing a paradigm shift, with venture capitals (VCs) and other investors increasingly preferring ventures in the technology, renewable and tourism sectors for funding, industry insiders said.
The country is also witnessing technology platforms-driven transformation in the investment sector, with intermediary ventures such as Incomlend linking smaller businesses to major international investors and private funders for securing financing, adding to the ongoing diversification drive in the economy.
“We’re seeing a significant emphasis on innovation and technology [by investors], fuelled by the UAE’s growing desire to become a tech hub,” Morgan Terigi, Co-founder and CEO of Incomlend, a Singapore-based global invoice financing marketplace for businesses and private capital, which made UAE as its operational hub, told Arabian Business.
“[The UAE] government’s supporting initiatives in artificial intelligence, blockchain, and e-commerce are also generating appealing potential for investors,” he said.
Terigi said the UAE has been seeing a significant infrastructure push, with investments in construction companies, logistics corporations, and infrastructure funds, leading to significant future growth.
The UAE is also emerging as a startup powerhouse, thanks to government support for entrepreneurship through programmes, investment, and luring international talent.
“Overall, the investment landscape is evolving towards a knowledge-based and innovation-driven economy that relies less on traditional resources.
“This gives tremendous potential for investors who want to be a part of the region’s development,” said the top executive of the investment intermediary company, billed as one of the first alternative cross-border trade finance platforms globally.
Smaller players coming on the radar of bigger investors
Industry experts said backed up by the supporting government policy and financial initiatives in technology and new industries, smaller firms with disruptive ideas are increasingly getting traction with bigger investors – regional and global.
They said venture capitalists and angel investors are seen looking for these hidden treasures of late.
Terigi said technology is undoubtedly one of the sectors to watch. “This is a logical combination, as AI, finance, and e-commerce is particularly appealing to both businesses and investors.”
He said sustainable business is another major player attracting big time attention from investors. “The UAE’s initiatives and desire to propel the country to a renewable energy hub may result in smaller players with unique ideas being purchased or supported by larger companies eager to expand their offers.”
Terigi said the current shift in the UAE’s investment sector is being driven by a combination of factors, with technology and technological advancements being a key player.
Industry insiders described the changing investment scenario as a direct impact of countries like the UAE aggressively seeking economic diversification.
The Middle East has traditionally relied on petroleum revenue, but countries such as the UAE are changing tack, leading to increased funding flow into new industries like tourism, renewable energy, and technology, they said.
Fintech, blockchain, AI transforming UAE investing
Blockchain, AI and fintech are cited among the new age technologies that are reshaping the UAE’s investing sector currently.
While financial technologies that streamlining and innovating many areas of investment, blockchain shows significant potential for increasing transparency and efficiency in areas such as fractional asset ownership and secure transactions, said Terigi, who also revealed that their company, Incomlend, recently acquired a web3 fintech, LC Lite – a blockchain-enabled platform digitising global trade receivables finance through a unique token-powered transaction mechanism, in its bid to further spread its footprint in the sector.
He said AI is another technology which is gaining wider use cases in the UAE, including in algorithmic trading, which can analyse markets and execute transactions quickly.
It can also use news and social media to assess investor mood and forecast market moves, and in identifying and preventing fraudulent conduct in the financial sector, said the top executive of Incomlend, which is looking to expand in the Middle East region, including Saudi Arabia.
“Some of these technologies are still new, but they have already had a substantial impact on the UAE’s investment sector.
“They are making investing more accessible, efficient, and data-driven, with the potential to attract new investors and democratise the investment environment,” Terigi said.
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