Welcome to the heart of innovation in the Middle East – the United Arab Emirates (UAE). With its strategic location, robust infrastructure, and business-friendly environment, the UAE has emerged as a beacon for startups and entrepreneurs seeking to turn their ideas into reality. From the bustling streets of Dubai to the burgeoning tech hubs of Abu Dhabi and beyond, join us as we uncover the investment landscape, success stories, players, and the latest developments in the UAE's vibrant startup scene. Whether you're a seasoned entrepreneur, an investor looking for the next big thing, or simply curious about the future of business in the region, this guide is your gateway to understanding the thriving world of startups in the UAE.

Tracking Investment Growth in the UAE Startup Sector

The UAE startup ecosystem saw fluctuations in deal activity. There were 196 deals in 2021, which increased to 252 in 2022 before declining to 211 in 2023. Funding raised also fluctuated, totaling $1.46 billion in 2021, rising to $1.85 billion in 2022, and then dropping to $970 million in 2023. The number of exits decreased over the past three years, from 30 exits in 2021, to 23 exits in 2022, and 14 exits in 2023. Notable exits included NymCard's acquisition of Spotii in 2021, Careem's purchase of Denari Cash in 2022, and Hala’s acquisition of paymennt.com in 2023.

UAE Unicorns

Careem

Careem, a transportation technology company based in the Middle East, operates a popular car booking platform connecting passengers with local drivers. In 2019, Careem achieved a significant milestone as the first unicorn exit in the Middle East and North Africa region, being acquired by Uber for a groundbreaking $3.1 billion. This acquisition validated Careem's position as a prominent player in the region's startup landscape. In addition to its core ride-hailing service, Careem has diversified its offerings by developing an app that integrates food delivery, bike rentals, and financial services like money transfers. With a total funding of $771.7 million raised over seven rounds, Careem has emerged as a leading innovator, providing convenient solutions for urban mobility and financial transactions.

EMPG

Emerging Markets Property Group, EMPG, also known as Dubizzle Group, operates classifieds portals in emerging markets and achieved unicorn status after raising a $150 million round led by OLX Group and its existing shareholders in 2020. Established in 2015, the company has expanded its presence across ten countries, employing approximately 5,500 individuals. With a total funding of $479 million raised over six rounds, Dubizzle Group has become a recognized platform for buying, selling, and renting homes, automobiles, and household goods in its target markets.

Kitopi

Kitopi, a cloud kitchen startup founded in 2018, offers delivery-only services for restaurants through its Kitchen as a Service (KaaS) platform. By providing managed infrastructure and software, Kitopi enables restaurants to establish delivery-only locations with minimal capital expenditure and time. In 2022, Kitopi became a unicorn after raising $415 million in a Series C funding round led by Softbank, valuing the company at over $1 billion. This valuation underscores Kitopi's disruptive business model and rapid expansion across multiple markets.

Tabby

Tabby is a payments and shopping app based in the UAE, initially headquartered there before moving to KSA, that empowers customers to pay in installments, providing greater financial freedom and control over their spending. The app has formed partnerships with over 30,000 global brands, including H&M and Adidas, and has amassed a user base of over 10 million across Saudi Arabia, UAE, Egypt, and Kuwait. Having raised $1.7 billion over 13 rounds, which included a Debt Financing round in 2023, Tabby continues to innovate and enhance the shopping experience.

Key Developments In 2024

In 2024, the UAE's tech and startup ecosystem has seen significant developments, demonstrating the region's dedication to fostering innovation and entrepreneurship. Abu Dhabi's tech ecosystem, Hub71, has formed a strategic partnership with Stride Ventures to support startups by offering access to capital and mentorship opportunities. At the same time, Microsoft has collaborated with AI firm G42 to provide advanced AI solutions using Microsoft Azure, through this deal Microsoft has invested $1.5 billion for a minority stake in G42 and has joined its board of directors. Additionally, the UAE-based early-stage VC firm COTU Ventures has launched a $54 million inaugural fund to support startups in the Middle East from pre-seed to seed stages, further enriching the investment landscape and nurturing the growth of emerging businesses in the region.

In conclusion, the UAE is solidifying its position as a global hub for innovation and technology, as evidenced by recent developments in its startup ecosystem. Through strategic partnerships, significant investments, and the launch of dedicated funds, the country is creating an environment conducive to the growth and success of startups across various sectors. As these initiatives progress, the UAE is set to accelerate its journey towards becoming a leader in entrepreneurship and technological advancement, fostering economic growth and prosperity in the region and beyond.