The third report on Dubai’s digital economy has been released by the Dubai Chamber of Digital Economy, one of the three chambers operating under Dubai Chambers. An overview of the investor environment supporting the start-ups and scale-ups that are revolutionising Dubai and the MENA region is given in the “Dubai’s Venture Capital Ecosystem” study.
The UAE’s advanced digital ecosystem has sped up the development of the entrepreneurship sector and contributed to a significant increase in its activity, according to Omar bin Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications and Chairman of the Dubai Chamber of Digital Economy. The UAE has strengthened its position as a major hub for the digital economy thanks to the nation’s proactive vision in developing legislation and initiatives in the digital sector, which fosters an environment that is favourable for startups and rapidly expanding businesses.
“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,” Al Olama continued. “They also underline the emirate’s position as a global capital for the future economy.”
Dubai Chamber of Digital Economy is entrusted with luring top IT firms, start-ups, and scale-ups that can support Dubai’s digital objectives as it sets its eyes on becoming the global location of choice for digital entrepreneurs. The chamber was established in order to develop the best digital infrastructure in the world and turn Dubai into a major global technology centre.
Dubai is well on its way to realising its goals thanks to a number of forward-thinking projects and investments in cutting-edge technology. Dubai has established the benchmark for how cities may use technology to improve the lives of their residents and draw in international enterprises. This is true of everything from its world-class fiberoptic network and cloud-based systems to its creative approaches to the development of smart cities.
The launch of the world’s largest solar-powered data centre, the Moro Hub, in February 2023, is only one recent example. The 100-MW facility is part of the Dubai 10X initiative, a ground-breaking project introduced in 2017 by H.H. Sheikh Mohammed bin Rashid Al Maktoum. With this project, Dubai will be 10 years ahead of other major global cities by bringing about disruptive, exponential transformation.
In the MENA region (excluding Israel), 749 scale-ups have collectively raised over US$19.5 billion over the past ten years (2012–2022), with UAE scaleups accounting for 65% of the total cumulative capital raised in the region.
With 306 scale-ups as residents, Dubai now hosts more than 40% of the scale-ups in the MENA area. In spite of the fact that there are 338 scale-ups in the nation, Dubai still hosts more than 90% of them.
Over the previous ten years, Dubai’s 306 scale-ups have raised over US$11.7 billion in the capital, accounting for an astonishing 60% of the MENA region’s entire cumulative fundraising total. Additionally, Dubai-based companies raised over US$2 billion in 2022, doubling their previous year’s results.
Additionally, the increase of fundraising in the MENA region exceeded $4 billion in 2021 and 2022, and there were three mega-rounds of $300 million or more in 2021 and six in 2022, including the IPOs of two scaleups.
Scale-ups raised money in 2022 when there was a major change in the number of financing rounds and a growing tendency towards higher cheque sizes and funding brackets. Between 2021 and 2022, funding rounds climbed by more than 100% in the $100 million to $1 billion category. Increases in other funding levels ranged from 20 to 87 per cent.
In terms of the method used to generate money, venture capital and corporate rounds accounted for more than 75 per cent of the funds raised, with IPOs and ICOs accounting for a roughly equal amount.
In Dubai, the number of scaleups grew by 26 per cent between 2021 and 2022, which is a significant growth. Between 2021 and 2022, Dubai had a rise of 64 scale-ups, from 242 to 306 scale-ups, in terms of absolute numbers.
Over the past ten years, venture capital has grown significantly in Dubai. Since only the seed stage and earlier rounds were once available, Dubai has developed into the only city in the MENA area where entrepreneurs may raise money in Series E and Series F rounds.
More than 30% of investment rounds are ascribed to businesses with their headquarters in Dubai, according to the research, which was created in partnership with Entrepreneur Middle East. This means that 87 percent of all funding rounds for UAE-based companies go to enterprises with their headquarters in the emirate.
The country’s digital economy is projected to grow from its current worth of US$38 billion to a conservative estimate of well over US$140 billion by 2031. Collaboration between ecosystem participants and stakeholders, along with the Dubai Chamber of Digital Economy, will guarantee that Dubai becomes the next global hub for the digital economy.
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