“The past ten years have been particularly exciting,” says Julien Plouzeau, Senior Partner at Oraseya Capital, discussing Dubai’s tech sector. Oraseya is the newly launched Dubai Integrated Economic Zones Authority (DIEZ)-backed venture capital fund.

In little more than a decade, it has grown to include over 4,000 startups and more than 400 VCs—catalyzing the world’s fastest growing VC ecosystem, according to Pitchbook's 2023 rankings.

This rapid growth is impressive, but Plouzeau says, “I believe we’ve reached a turning point in our maturity curve.”

A swelling network effect combined with robust and growing public sector support have precipitated an increasingly global mindset in Dubai’s startups, promising to catapult the emirate’s tech sector to new levels – and investors are taking notice.

Capital magnet

“With its strategic location, business-friendly environment, skilled talent pool, and modern infrastructure, Dubai is a great place for early-stage companies to start and scale up,” says Plouzeau.

This startup-friendly environment has bred a number of eye-catching success stories, like Careem – the first $1bn+ exit in the region – and fellow unicorns Tabby, the buy-now-pay-later FinTech, and food delivery platform Kitopi. Venture capitalists are keen to find, and fund, the next generation.

Philip Bahoshy, CEO of Dubai-based investment data platform MAGNiTT, says that “the number of startups that are headquartered here continues to grow exponentially. And as a result of that, you see this network effect of investors coming to the region.”

According to MAGNiTT’s 2023 UAE Venture Investment Report, while the UAE was not immune to 2023’s global slowdown in investment, the same year saw a 61% uptick in seed valuations. This is thanks to an 80% growth in seed funding 2022-23 – and global (non-local) investors comprised a greater, and growing, share of the total.

In short: VC focus has shifted to getting in at the ground floor, and they’re increasingly coming from outside of the region.

Part of the attraction – and another vital source of startup support – is the level of public investment flowing towards the sector.

Stimulating innovation

The emirate’s flagship industrial policy, the Dubai Economic Agenda, ‘D33’, advocates strongly for tech. Stated goals include scaling up 400 startups and growing 30 unicorns by 2033.

One complementary initiative is the launch of Oraseya. Its portfolio is focused on supporting early-stage companies – pre-seed to Series B – with ties to Dubai. Success stories include Writer.com which “recently raised an impressive $100 million in their Series-B funding round,” according to Plouzeau, and 360VU, “the region’s first immersive social app, which recently made headlines by partnering with Apple.”

And Oraseya’s SANDBOX program is Dubai’s only VC-backed startup accelerator. Participating pre-seed and seed-stage companies receive $150,000 investment before undergoing five months of diagnostics, mentorship, workshops and networking with peers, potential partners and investors from across MENA.

It is the latest – and arguably most desirable – in a bustling landscape of such programs, joining similar accelerators from the Dubai International Finance Centre (DIFC) and R&D-focused Dubai Future Foundation (DFF).

This injection of funds and support from Dubai’s government and free zones comes at a time when its tech ecosystem is finding its niche as a global launchpad.

Global outlook

Plouzeau says that until recently, the approach in Dubai’s tech ecosystem was to mimic the models that work in the US and Europe. But now, “we’re seeing a new generation of founders with a global outlook. They aim to solve not just regional problems but also create solutions that can scale worldwide.”

And Dubai is the ideal place to do it. Historically a trade gateway between east and west, Bahoshy says that for both regional startups and international players looking to establish themselves in local markets, “their first port of call tends to be within Dubai to set up, and then scale out into other jurisdictions.”

“It’s always hard to predict the future, but Dubai’s tech ecosystem trajectory looks particularly bright.”

— Julien Plouzeau, Senior Partner at Oraseya Capital

Even for digital businesses, both Plouzeau and Bahoshy emphasize the importance of physical connection in Dubai’s importance as a global launchpad. It is geographically central, with advanced connecting infrastructure – two-thirds of the world’s population is within eight hours by plane.

And its highly diverse talent pool means skilled individuals from every region are available for navigating the idiosyncrasies of every accessible market.

A bright future

Dubai’s tech ecosystem is experiencing a positive feedback loop. Its notable successes are attracting investors, which attracts more startups, which is attracting more investors.

In the process, it’s evolving not just into the next San Francisco or London, but into its own kind of tech hub, with its own kind of global reach – amplified by the influx of support from initiatives like ‘D33’ and SANDBOX.

As Plouzeau concludes, “It’s always hard to predict the future, but Dubai’s tech ecosystem trajectory looks particularly bright.”