The city of Dubai is aligning with the goals of the 'Dubai Economic 2033' agenda by launching a fund of 136 million to finance technology startups.
Article written by Nicolò Joswig.
The city of Dubai has long been associated, perhaps with a partially negative connotation, with the emigration of Europeans for economic reasons and the opening and relocation of businesses by Italian citizens to this destination. This is not only due to the rapid development and flourishing economic ecosystem of this reality but especially because of the absence of income taxes and import-export duties.
Yet, especially in recent years, Dubai has been making significant strides in the startup sector, focusing on innovation as one of the driving forces of its economy. In general, the MENA region in 2021, according to the startup data company MAGNiTT, recorded $2.6 billion in VC funding (the highest ever recorded for the region), with a significant portion directed towards startups in the United Arab Emirates.
Regarding Venture Capital investments, according to MAGNiTT, the United Arab Emirates (UAE) saw a sequential increase in the third quarter (Q3), with an investment of $124 million distributed across 30 transactions.
Covering approximately 60% of the total MENA funding, the UAE can be considered the entrepreneurial hub of the region, boasting names (based in Dubai) such as Careem, acquired by Uber in 2020 for $3.1 billion, and the leading Middle East e-commerce platform Souq.com, acquired by Amazon in 2017 for $580 million.
In this context, the new Venture Capital fund launched a few days ago by the Dubai Integrated Economic Zones Authority (Diez), under the patronage of Dubai's ruler Sheikh Mohammed bin Rashid Al Maktoum, is positioned. The fund is valued at a substantial $136 million and is created with the intent to finance technology startups and support the economic goals, especially in digitization, outlined in Dubai's Economic Agenda 2033. This initiative aims to promote the formation and, more importantly, the growth of SMEs in sectors with high potential for development, innovation, and attractiveness.
The fund demonstrates Dubai's interest in increasingly investing in highly innovative startups as a means to achieve the goal of becoming, by 2033, "the most important business hub globally," as declared by Sheikh Mohammed bin Rashid Al Maktoum himself. The ruler, who also serves as the president of Diez, stated during the launch of the venture capital fund on the sidelines of the Dubai Business Forum that startups are "a vital segment for the progress of Dubai's economy in the decades to come."
This interest in the startup sector should be a cause for reflection and is intended to "attract both entrepreneurs and investors who aspire to reshape the landscape and future of advanced technological sectors," as stated by Dr. Mohammed Al Zarooni, the executive chairman of DIEZ. It represents yet another instance of talents being attracted away from Italy.
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