While Silicon Valley may stand undefeated as the most prominent name for tech entrepreneurs and startup visionaries, other regions are worthy competitors. Dubai’s rulers see a startup economy as one of the keys to ensuring it will be a global player long after the region’s oil runs out. Can Dubai rise to be a 21st-century tech ecosystem?
Dubai has become the center of commerce and technology in the Middle East. The middle eastern headquarters for large Tech companies, such as Facebook, Twitter, Microsoft, Google, Oracle, are located in Dubai . This development has attracted a great number of companies to come to Dubai. Similarly, it led to a growth in significance for Dubai’s position as the startup hub of the Middle East. Dubai is an attractive market for companies, and has a lot to offer to entrepreneurs. Although it is a relatively small market by itself, it has attracted outside talent as well as outside capital. Entrepreneurs launch a startup in Dubai to scale for the entire region and beyond. Furthermore, Dubai is politically and economically stable, safe and prosperous. The quality of life is high, enabling highly skilled and talented people to move to Dubai. The favourable tax conditions (Dubai introduced taxes in the beginning of 2018: 5% VAT) also attract capital, companies and people.
The startup scene effectively started in 2010 with a few startups, one co-working space and a few early stage investors. In recent years, this has grown into a massive scale: There are hundreds of startups, hundreds of million dollars in venture capital, many co-working spaces, incubators and accelerators. Even the government is support the ecosystem with capital as well as their flagship and prestiges accelerator: Dubai Future Accelerator (https://dubaifutureaccelerators.com/en/) Its vision is to pull the future forward faster.
Nonetheless, the market itself is still quite young and undeveloped. That means execution is more difficult, but it also means that competition is less fierce. It is challenging to create a successful business in Dubai, but if you do, it is worth it. In recent years, there have only been a few exits. The most famous one has been Amazon’s acquisition of Souq (http://souq.com/). Rumour has it that Uber has plans to acquire its local competitor Careem very soon for $2.3bn.
As more and more of these deals take place, there will be more attention and trust in the ecosystem. Consequently, there will be more experienced entrepreneurs as well as more capital in circulation. These are all indicators that the ecosystem is moving towards the right direction. I believe the peak of Dubai’s tech ecosystem is yet to come, what do you think?
