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UAE — VC navigator

Where tradition meets technology

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Market overview

Review of the market and key statistics

VC List

The table of 300+ VCs, their investment focuses and contacts

Taxes & incorporation

Information on how to launch a startup in the UAE

52%
of all VC deals in MENA are held in the UAE
$1.85 bn
raised by startups in the UAE in 2022
2nd
The UAE's rank among startup ecosystems in MENA
44%
out of total venture capital in MENA

Introduction

This report is a go-to guide for international startups and investors that are keen on exploring the UAE market, as it answers several questions frequently asked by entrepreneurs. Additionally, the report includes the list of VC funds and business angels ready to invest into startups in different spheres.

The United Arab Emirates (UAE) has emerged as a leading hub for entrepreneurship and innovation in the Middle East. With a favorable business environment, strategic geographical location, and government support, the UAE's venture capital (VC) ecosystem has witnessed rapid growth in recent years. This comprehensive overview aims to provide key statistics, interesting facts, and insights into the UAE's VC landscape.

The UAE's VC ecosystem comprises various stakeholders, including venture capital firms, angel investors, startup accelerators, incubators, and government initiatives. The ecosystem is primarily centered around the cities of Dubai and Abu Dhabi, which are known for their dynamic business environments.

The UAE's VC ecosystem has attracted interest from international investors, including renowned venture capital firms and angel investors. The presence of global tech giants, such as Amazon, Microsoft, and Google, who have established regional headquarters in the UAE, has further boosted investor confidence.

The UAE's venture capital ecosystem has experienced remarkable growth, driven by government support, a favorable business environment, and a focus on innovation. The country has witnessed a surge in funding, the emergence of unicorns, and the establishment of supportive infrastructure. As the UAE continues to foster entrepreneurship and attract global investors, the VC landscape is expected to thrive, further positioning the country as a leading hub for startups and innovation in the region.

One notable success story that exemplifies the UAE's immense potential is Careem, a company that achieved a momentous exit by being acquired by Uber for an amount exceeding US$ 3 billion. This historic acquisition marked a significant milestone as the first unicorn in the Middle East, outside of Israel.

Market overview

$86.1 bn
Total funding
2x
Growth since 2020
586
Total VC exits
5
Unicorns (see below)

2022 is a very special year for the UAE's ecosystem –  for the first time the country emerged as a top-1 country for venture capital financing in the MENA region, as companies based in the Emirates raised $699 million in the first half of 2022.

Dubai is leading the way as the main startup ecosystem in the UAE.Since 2017, startups based in Dubai have attracted approximately 96% of all funds raised in the UAE, demonstrating the dominant and robust nature of Dubai’s startup economy.

The Dubai Chamber of Digital Economy projects that the country’s digital economy will reach a value of US$ 140 billion by 2031, with Dubai-based startups playing a crucial role in achieving this goal.

Speaking of the top-funded businesses, crypto, foodtech, e-commerce, fintech could be defined as the most funded spheres.

Crypto: The cryptocurrency sector has gained significant traction in the UAE, attracting substantial investments. The country has been proactive in fostering a favorable regulatory environment for digital currencies, which has led to increased interest from investors and startups in the crypto space. Several crypto-focused companies, including exchanges, blockchain platforms, and crypto payment solutions are incorporated in the UAE. Notable startups: Rain, White Shark, LayerAI.

Foodtech: With a growing demand for innovative food delivery platforms, meal subscription services, and online grocery platforms, investors are keen to support startups revolutionizing the food industry. Funding has been directed towards companies that leverage technology to enhance the food ordering and delivery experience, improve supply chain management, and introduce sustainable practices. Notable startups: MyEatPal, Right Farm.

E-commerce: E-commerce continues to be a thriving sector in the UAE, attracting significant funding. The country has a tech-savvy population and a strong appetite for online shopping, creating opportunities for e-commerce startups. From online marketplaces and fashion platforms to electronics retailers and niche e-commerce ventures, companies in this sector have received substantial investments to fuel their growth and expand their market presence. Notable startups: Weee!, Cartlow.

Fintech: Startups focusing on digital payments, mobile banking, peer-to-peer lending, robo-advisory services are very popular in the UAE. The UAE's government and financial institutions have also been proactive in supporting fintech startups through regulatory initiatives and dedicated funding programs. Notable startups: zenda, Pyypl, Pluto.

What industries in the UAE do you find the most promising?

Arabian Business named 5 top trends for startups in the region:

Capital crunch: Startups will focus on raising capital wisely and managing their spending. Founders will optimize budgets, cut costs on non-essential areas, and prioritize building valuable products.

Finance in focus: Investors will scrutinize valuations more closely. Founders need to craft compelling narratives to encourage reinvestment without compromising their ownership. Unit economics will play a crucial role in investment decisions.

Sustainability in the spotlight: With the UAE hosting COP28, startups in the sustainability space will attract attention and funding. Investors and governments emphasize environmental sustainability, leading to increased regulations and interest in sustainable startups.

Industry impact over hype: Investors will prioritize industries with real impact rather than hyped-up stories. HealthTech, AgTech, PropTech are promising sectors in the face of economic uncertainties.

Relocation of international startups: The UAE's business-friendly environment and supportive legislation make it an attractive location for global and regional headquarters. Initiatives like ADGM and ADRO facilitate the relocation process, offering benefits to both foreign-owned businesses and local B2B firms.

Despite the current progress, there are still several challenges that need to be addressed to unlock the full potential of the UAE's startup ecosystem:

– Confusing set-up procedures. If you are unfamiliar with the UAE’s laws and procedures, setting up a business may feel like a difficult and confusing task. There are multiple consulting companies that can assist you to ensure your business set up is a quick and easy process, we would recommend enlisting the help of one of these companies if you are new to Dubai and the world of business.

–Weak R&D-Business links. The relative lack of a research culture permeates the organizations and institutions of the UAE. Experience of research participation among the broader population, such as completing surveys, is also limited and the norms of negotiating organizational access for research purposes are not yet established. Even in regions with a long tradition of research, accessing organizations and research participants can be a significant challenge

– Trade limitations. Although there are many benefits that come with setting up a business in a freezone, if you choose this option you will experience trade limitations, meaning that you will be restricted to performing all business operations within the confines of your free zone only. Although, depending on your type of business, it is possible to obtain an agreement with a distributor in order to operate in mainland areas.

Editor's opinion on market characteristics

Technical talent (IT, engineering, hardware)

Marketing talent (PR, ads, branding)

Management talent (operations, HR, management)

Pros & Cons of launching a startup in the UAE

Strategic Location

The UAE's strategic location serves as a gateway to both Middle Eastern and global markets, providing startups with access to a wide range of business opportunities and potential customers

High Cost of Living

While the UAE offers numerous advantages, it also has a very high cost of living, especially in major cities like Dubai and Abu Dhabi

Access to Capital

Access to funding is relatively easier compared to many other regions, providing startups with the necessary capital to fuel their growth and innovation (including pre-seed stage)

Low Amount of Accelerators

Accelerators play a vital role for early-stage startups. However, the UAE lags behind in terms of the sheer quantity of accelerators compared to other startup hubs around the world.

Supportive Business Environment

The UAE offers a business-friendly environment with minimal bureaucracy, tax incentives, and free zones that attract foreign investment

Cultural and Regulatory Considerations

The UAE has a unique cultural and regulatory landscape that may pose challenges for startups. Adhering to cultural norms, navigating local regulations, and obtaining necessary licenses can be time-consuming

VCs list

This list includes a diverse range of funds that invest in various stages of startup growth and in a variety of industries. From early-stage seed funding to growth-stage investments, these VC funds have a track record of supporting startups in the UAE.

For startups willing to scale on the UAE's market, this list can be an incredibly valuable resource. By having access to a curated list of top VC funds in the country, startups can easily identify potential investors who align with their business needs and goals. With the right funding, startups can accelerate their growth, expand their operations, and bring innovative solutions to market.

This list also provides a valuable opportunity for startups to gain insights into the investment landscape in the UAE. By understanding the different types of investors and their investment criteria, startups can tailor their pitches and strategies to increase their chances of securing funding.

Over 300 venture funds and 80 angels are gathered in the list – start to explore and send your pitch!

Unicorns and soonicorns on the UAE's market

E-commerce
Careem

Careem

'The everything app' for the region – a platform for ride-hailing and on-demand delivery services. It enables users to book their rides and also offers various services like food delivery, recharge services, courier/grocery delivery services, and more.

Company's website
Logistics
Swvl

Swvl

Swvl offers an app that allows customers to book fixed-rate rides on buses and vans in their network. A provider of tech-enabled mass transit solutions. Founded in Egypt, Swvl moved its main office to Dubai in 2019.

Company's website
logistics
Vista Global

Vista Global

An AI-driven subscription-based private jet booking solution. It offers on-demand global flight coverage, aircraft leasing/finance & aviation technology.

Company's website
Classified
Dubizzle Group (formerly EMPG)

Dubizzle Group (formerly EMPG)

A company that owns and operates classifieds portals in emerging markets – primarily in the MENA, South Asia and Southeast Asia regions.

Company's website
E-commerce
Kitopi

Kitopi

Kitopi, which stands for Kitchen Utopia, operates over 80 cloud kitchens across the UAE, Saudi Arabia, Kuwait, and Bahrain. The company enables food brands that operate delivery-only locations to start their online stores.

Company's website

Incorporation

10 steps to incorporate
your business in the UAE

Incorporating a startup in the UAE involves several steps that may vary depending on the chosen jurisdiction and company type. Here is a general overview of the steps involved, along with relevant official links for further information:

1. Determine the legal entity and jurisdiction

Decide on the appropriate legal structure and jurisdiction for your company. The UAE offers options like Free Zone Companies, Mainland Companies, and Offshore Companies. Explore the different options on the official website of the UAE

2. Choose a company name

Select a unique and suitable name for your company. Check the availability of the desired name and ensure it complies with the naming guidelines. You can perform a name search on the Ministry of Economy website.

3. Determine business activities

Identify the specific business activities your company will undertake. Refer to the Standard Industrial Classification (SIC) codes provided by the UAE National Bureau of Statistics.

4. Prepare required documents

Gather the necessary documentation, which typically includes passport copies of shareholders and directors, proof of address, and other relevant details. The specific document requirements may vary based on the chosen jurisdiction.

5. Submit the application

Submit the completed application and required documents to the relevant authority. For Mainland Companies, this would be the Department of Economic Development (DED) of the respective emirate. For Free Zone Companies, each Free Zone has its own authority responsible for company registrations. Refer to the specific Free Zone authority's website for detailed information.

6. Obtain initial approval

Upon submission, you will receive initial approval from the relevant authority. This step may involve verifying the proposed company name, shareholder eligibility, and compliance with legal requirements.

7. Lease office space

If setting up a Mainland Company, you will need to lease an office space in an approved location. Consult with the DED or relevant authority for guidelines on office space requirements.

8. Draft the Memorandum of Association (MOA)

Prepare the MOA, which outlines the company's structure, business activities, shareholders, and other pertinent details. Arrange for the MOA to be notarized by a public notary in the UAE. This step is essential for formalizing the legal document.

9. Obtain licenses & Pay Fees

Depending on your business activities, you may need to obtain additional licenses or permits from regulatory bodies. Contact the relevant authorities, such as the DED or Free Zone authority, to determine the specific licenses required for your business.

10. Company registration and bank account opening

Once all necessary approvals and licenses are obtained, complete the formal company registration process with the respective authority. Subsequently, you can proceed with opening a bank account for your UAE company. Consult with different banks in the UAE to understand their account opening requirements and procedures.

Please note that the steps provided are a general overview, and it is important to consult with legal professionals or business advisors who specialize in company incorporation in the UAE to ensure compliance with the latest regulations and requirements.

The report is supported by these amazing companies:

The review is created by:​

Kirill Sosnin

Kirill Sosnin

Co-founder at Blank.

Let's discuss the collaboration

I plan to launch more reviews of the underexplored regions, such as Saudi Arabia and Portugal.

Let me know if you are interested in this or other collaboration.

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