Most seasoned entrepreneurs based in the Middle East and North Africa (MENA) will tell you
to head to the United Arab Emirates to launch your tech product before rolling out your
growth strategies for the region.
At 10 million residents, comprised mainly of expats, it is a sizeable test market.
Like the rest of the region, the country has a young workforce, there is high internet
penetration and, according to the Oxford Business Group, users in the UAE spend seven hours online each day placing the country at number 10 globally in terms of usage. Dubai Tourism & Commerce Marketing estimates that over 40% of MENA startups establish themselves in the UAE.
Four compelling reasons to choose the UAE
1. Digital Transformation Policies
The UAE is on an aggressive timeline to transform itself into a knowledge-based nation. The
chances of success are high if you consider how rapidly the country has developed over the
past 50 years. From its humble beginnings as a collection of seven statelets reliant on pearl
diving and fishing to the discovery of oil in the 60s that propelled them into a new era of trade and rapid development. The country, along with other Gulf states, have been amongst the first to legislate in support of digitalization.
In 2018 Abu Dhabi Global Market announced their digital sandbox initiative to boost financial services innovation. Blockchain is also high on the agenda and by 2021 half of government transactions is forecast to occur on a blockchain platform. Two ministerial positions have been created, the Minister for Cabinet Affairs and the Future and the Minister of State for Artificial Intelligence show how serious the leaders are about their vision.
2. Straight Forward Business Setup
If you want to create a world class infrastructure and attract innovative companies, you
simplify processes. The country’s 45 free zones are the result of such efforts. Each zone is
mostly industry specific and offers a liberal business environment, supporting infrastructure
and incentives such as 100% foreign ownership, tax and duty concessions. A recent example
is the DIFC innovation license to attract Fintech startups to Dubai.
In 2017 the Instant License initiative was launched by Dubai to speed up obtaining a
business license. There is no requirement to specify the company location provided the
business is in its first year. Coupled with a business visa, eligible entrepreneurs are allowed a
six-month multiple entry with the option to convert into a residency permit.
3. Thriving Tech Ecosystem
The public sector driven ICT Fund has invested more than $400m in incubators, research
and development, education and innovation programs. Consistent spending continues to
nurture the startup ecosystem, examples include Hub71 in Abu Dhabi which offers
incentives such as free office space, health insurance and subsidized housing for
entrepreneurs. Dubai Silicon Oasis, the largest startup hub in MENA, offers seed funding
and the Dubai based accelerator TURN8 provides follow-on investment for startups
operating in robotics, nanotechnology and IoT applications.
The Dubai government even has their own accelerator program, Dubai Future Foundation,
established to build partnerships between government and startups with the sole aim to
develop and apply disruptive technologies.
4. Attracting Foreign Investment
The UAE’s first unicorn, Careem, has truly put the country and the region on the map. In
2019 Uber bought the ride hailing platform for $3.1bn. This year’s largest exit was the
purchase of Dubai based Instashop by German multinational Delivery Hero for a cool
$360m.
Investment in MENA is at an all-time high with 2020 seeing a new record of $1bn invested
in startups, despite a world-wide pandemic.
According to Magnitt’s Venture Report, 2020 saw fewer deals but with larger funding
rounds. The UAE maintains pole position with the largest share of total funding followed by
Eqypt and the Kingdom of Saudi Arabi. Investment by foreign investors was up 3% from
2019. Recent strong investment rounds by the likes of UAE based Fetchr and Propertyfinder
will no doubt keep the focus on MENA startups.
Startup Sweden’s AccessMENA program in Dubai, 17–21 October 2021 Startup Sweden has launched their market access program for MENA with a call to female founders globally to apply. A part of The Swedish Agency for Economic and Regional Growth, Startup Sweden is tasked with accelerating the country’s most promising tech startups. The program organized jointly with
the Swedish Institute is free of charge and will take place during Expo2020, in October 17–21 this year. Our partner in Dubai is Astrolabs, an experienced digital eco-system builder who share the same passion as Startup Sweden for innovation
and diversity.
Any questions please contact dawn.nordenblank@tillvaxtverket.se
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