Dubai: Leading the Regional Tech Sector
26 Mar 2019
Attributed to Ammar Al Malik, Managing Director of Dubai Internet City and Dubai Outsource City
Back in a 2016 funding round, Dubai-based ride-hailing company Careem became a unicorn with a value of about US$1 billion, making it one of the most bankable tech startups in the Middle East. Last week, Uber announced its plans to acquire Careem for a staggering US$3.1 billion – representing a 210 per cent increase in value. Considering Dubai’s ambition to surpass milestone after milestone – from the tallest tower to the largest mall – this deal is testament to the emirate’s thriving business ecosystem, which presents endless opportunities for companies and investors.
Careem’s latest achievement follows South African investment firm Naspers’s full acquisition of classifieds site Dubizzle for US$400 million, and e-commerce giant Amazon’s 2017 acquisition of Souq.com for US$650 million – all three of which are deals that positioned Dubai on the global map as an increasingly lucrative business and investment destination.
The city’s appeal to entrepreneurs and investors is further compounded by studies released ahead of the AIM Startup summit, which found that Dubai is the world’s top destination for hundreds of startups – followed by New Zealand, Singapore, Norway, Germany, Japan and Sweden. This, supported by the fact that the MENA region saw a total of US$893 million invested in start-ups last year, indicates that businesses are booming in the Middle East – and that Dubai remains at the forefront of this growth.
For over two decades, Dubai Internet City (DIC) has been home to some of the biggest tech businesses in the region – including Souq.com and Careem – and has been at the heart of the UAE’s rapidly maturing digital landscape. Over the last few years, we have witnessed an increasing number of multi-million and multi-billion-dirham deals emerge from our unique ICT hub, with a frequency greater than ever before. This clearly evidences Dubai’s conducive business infrastructure, and reinforces its credentials as an enabler for local, regional and international companies to evolve and scale up, supported by a visionary leadership and business-friendly policies and initiatives.
Furthermore, we firmly believe that success feeds success. By virtue of magnitude alone, the Careem deal is sure to inspire young innovators across the region, who are fuelled by the desire to become the newest members of the billion-dollar-club. In the next few years, I believe we are likely to see an increase in cutting-edge, tailor-made solutions coming from local start-ups and entrepreneurs, which will in turn reinforce Dubai’s position as one of the smartest, most innovative cities in the world.
Additionally, from an economic perspective, Dubai has a lot to look forward to in the years to come. Considering these recent acquisitions, it is well within reason to expect these multi-billion-dollar companies to set up IPOs (initial public offerings) and thereby, attract the whole spectrum of business – ranging from young and talented entrepreneurs and innovators, to seasoned global conglomerates and digital disruptors.
As key drivers of Dubai’s Strategy for Innovation, we eagerly anticipate the degree of ingenuity and innovation the following years will bring to the city, and we look forward to discovering how these deals will herald the next phase of growth within the region.