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The Dubai Chamber of Digital Economy, one of the three chambers operating under the umbrella of the Dubai Chambers, revealed in its third report on the digital economy, entitled “The Venture Capital System in Dubai”, that Dubai is home to more than 40% of the rapidly growing emerging companies in the Middle East region. North Africa.
The report aims to provide an overview of the investment landscape that supports emerging digital companies and the rapidly growing transformational emerging companies in Dubai and the Middle East and North Africa region, and to provide updated data and statistics that reflect the UAE’s leadership as a global destination for emerging digital companies with rapid growth.
Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications, Chairman of the Board of Directors of the Dubai Chamber of Digital Economy, confirmed that the advanced digital system established by the UAE contributed to enabling the entrepreneurship sector and achieving significant growth in its activity and rapid development, as a result of the proactive vision it adopts. The country is developing legislation, initiatives and plans in the digital field, to attract billionaire companies and investors from around the world, to enhance the stimulating environment for startups and companies with rapid growth, and to consolidate the country’s position as a global center for the digital economy.
He said that the results presented in the report are a reflection of years of hard work in creating and developing smart and digital solutions and employing them to support building a new and future model for the economy sector in the UAE in general, and Dubai in particular, and reflect what Dubai represents as a global capital for the future economy.
Supporting Dubai’s endeavors to become the global destination for digital entrepreneurs
The report stated that as part of its efforts to support Dubai’s endeavors to become the global destination for digital entrepreneurs, the Dubai Chamber of Digital Economy is working to attract leading and emerging technology companies that will support Dubai’s digital aspirations, indicating that the emirate is moving steadily to achieve its ambitions through a number of forward-looking initiatives and investment in the latest technologies. And that it has set a standard in the mechanisms for cities to benefit from technology to enrich the life of society and attract international companies, starting with the world-class optical fiber network, through its systems based on cloud computing, and up to its methodologies in developing smart cities.
The report said that the opening of the data center for integrated solutions “Moro” in February 2023, which is the largest data center powered by solar energy in the world, is one of the most prominent examples in this regard. It was launched under the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, “may God protect him”, in 2017 to bring about a radical transformation and exceptional progress that shortens the next 10-year journey.
The report revealed that there are 749 fast-growing digital startups in the Middle East and North Africa region (excluding Israel), which raised funding during the past decade (2012-2022) amounting to about $19.5 billion, with the share of fast-growing startups in the UAE being about 65 percent. % of the total financing raised by these companies in the region, i.e. $ 12.6 billion (46.5 billion dirhams), and the number of digital startups with rapid growth in Dubai reached 306 companies out of a total of 749 companies in the Middle East and North Africa region, while the total number of startups is The rapidly growing digital sector in the UAE has 338 companies, more than 90% of which are headquartered in Dubai.
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The report pointed out that the fast-growing digital startups in Dubai raised about $11.7 billion (42.9 billion dirhams) in funding over the past decade, accounting for 60% of the total funding raised by fast-growing digital startups in the Middle East and North Africa region. In 2022, startups in Dubai raised more than $2 billion in funding.
He explained that the growth of financing for fast-growing startups in the Middle East and North Africa region exceeded $4 billion during 2021 and 2022, while huge funding rounds of $300 million or more recorded an upward trend, rising from three rounds in 2021 to six rounds in 2020. 2022, including the listing of two companies with rapid growth in the financial markets.
The report said that the year 2022 witnessed a remarkable shift in the number of financing rounds, with companies with rapid growth tending to mobilize financing, with greater momentum in the volume of financing, and the number of financing rounds ranging in value from $100 million to $1 billion increased by 100% between 2021 and 2022, while other funding ranges also witnessed a significant improvement, ranging between 20% and 87%.
With regard to the source of capital for funding rounds, the report indicated that investment capital and funding rounds accounted for more than 3 quarters of the funding raised, while initial public offerings and initial offerings in digital currencies accounted for the remainder with an almost equal share for each. The number of rapidly growing startups in the Emirate of Dubai also witnessed an increase of 26% between 2021 and 2022, to reach 306 companies out of 242 companies, which is equivalent to 64 new companies within a year.
Project finance in Dubai has also witnessed significant growth over the past decade. Dubai has evolved to become the only city in the Middle East and North Africa region that embraces startups seeking to raise funding in Series E and F rounds, after it was witnessing only seed and early stage funding rounds.
The report, which was prepared in cooperation with Entrepreneur Middle East magazine, revealed that Dubai-based startups accounted for more than 30% of the number of funding rounds related to startups in the Middle East and North Africa, while 87% of The number of financing rounds for the companies
