LoginCollected by: Mana Honar Pisheh
Start-ups inbai raised a total of $2 billion in funding last year, as the emirate’s digital economy sets its sights on a target of $140 billion amid projections of significant growth in the sector.
According to a report by the Chamber of Digital Economy, start-ups in Dubai secured a total of $2 billion in funding last year.
Dubai’s start-ups received over $2 billion in funding last year, as reported by the Chamber of Digital Economy, providing a significant boost to the UAE’s already burgeoning digital economy, which is projected to be valued at over $140 billion, up from its current valuation of $38 billion. The announcement coincided with the launch of the Chamber of Digital Economy’s third report on Dubai’s digital economy.
The recently released “Dubai’s Venture Capital Ecosystem” report sheds light on the investor landscape supporting the rapidly growing start-up and scale-up scene in Dubai and the wider MENA region. Over the past decade (2012-2022), a total of 749 scale-ups in the MENA region (excluding Israel) have raised more than $19.5 billion, with UAE scale-ups accounting for 65% of the total capital raised. Currently, Dubai hosts over 40% of the MENA region’s scale-ups, with 306 scale-ups based in the city.
Dubai remains the dominant hub for scale-ups in the UAE, hosting over 90% of all scale-ups in the country, which totals to 338. Of Dubai’s 306 scale-ups, they have raised over $11.7 billion in funding over the last decade, accounting for 60% of the MENA region’s total cumulative fundraising. Dubai-based start-ups have continued their upward trajectory, raising more than $2 billion in 2022, doubling their fundraising results from the previous year.
The report also highlights the significant growth in funding for the MENA region, which has exceeded $4 billion in both 2021 and 2022. Furthermore, there has been an uptick in the number of mega-rounds of $300 million or more, with three occurring in 2021 and six in 2022. Notably, two scale-ups have recently listed on stock exchanges. This trend suggests that there is increasing investor confidence in the region’s start-up and scale-up ecosystem, and that more companies are successfully scaling and making a significant impact.
A notable trend in 2022 was a shift in the number of funding rounds and a growing preference for larger cheque sizes among scale-ups. Funding rounds in the range of $100 million to $1 billion saw a more than 100% increase between 2021 and 2022, while other funding brackets also saw increases ranging from 20% to 87%. This data indicates that investors are increasingly willing to support larger-scale ventures, suggesting that the region’s start-up and scale-up ecosystem is continuing to mature and develop.
Venture capital and corporate rounds accounted for more than three quarters of the total capital raised, while IPOs and ICOs were responsible for an almost equal share. The number of scale-ups has also risen significantly in Dubai, increasing by 26% between 2021 and 2022 alone. In absolute terms, the city saw an increase of 64 scale-ups, growing from 242 to 306 in that time. The report also highlights the impressive growth of venture funding in Dubai over the past decade, with the city now home to startups that have raised funds in Series E and Series F rounds, marking a significant milestone in the development of the city’s start-up and scale-up ecosystem.
In summery:
The UAE’s digital ecosystem has played a pivotal role in the development of its entrepreneurship sector, with the country’s proactive vision in developing legislation and initiatives contributing to significant growth in activity. As Dubai aims to become a global hub for the digital economy, the Chamber of Digital Economy is tasked with attracting leading tech companies, start-ups and scale-ups to support these ambitions. With a range of visionary initiatives and investments in cutting-edge technology, including the world’s largest solar-powered data center, Dubai is setting the standard for how cities can leverage technology to enhance citizens’ lives and attract global businesses.
AlsoRead: