Dubai is among the top 35 most attractive cities in the world when it comes to attracting venture capital and the funding of start-ups, according to a global index that assessed over 100 cities across the world.
The emirate ranked 30th in terms of its ability to attract venture capital and 32nd in a category that evaluated how well start-ups are funded, according to the first Innovation in Business Index from Finom, a business-to-business financial platform in the Netherlands.
Dubai also scored favourably in categories such as IT and software, artificial intelligence and machine learning, and FinTech innovation.
The index ranked global cities that are responsible for driving innovation forward in the business world and are renowned for their start-up activity, research capabilities and strong industrial presence. It selected 100 global cities, from an initial shortlist of 200, and ranked them according to a range of metrics.
“Throughout history successful innovative companies have initiated the development of a supporting ecosystem in their home town or city," said Yakov Novikov, chief executive and co-founder of Finom. "The same trend continues to be seen today, with different cities leading the innovation landscape in different industries."
Dubai, which is home to many global start-ups such as Telegram and the Uber-owned Careem, fared well in various indices as a result of its business-friendly policies. The emirate ranks high in global business rankings, such as the World Bank's Doing Business index while last week's Global Financial Centres Index ranked the emirate 18th among the most competitive global financial centres.
On the Finom index, Dubai scored 63.11 out of 100 in VC funding while in the start-ups segment – which Mr Novikov emphasised as a vital factor in powering an economy – the emirate scored 54.13.
“Innovation is frequently ignited by start-ups, which use an external perspective to disrupt existing processes and industry incumbents. This is exactly what has been happening in the finance and banking sectors over recent years,” Mr Novikov said.
"Having a robust start-up culture has many knock-on benefits for cities and their residents, including increased employment opportunities, a healthier economy and the establishment of a business ecosystem that is operating at the forefront of industry change.”
VC funding and start-ups contribute to the economic activity in Dubai. The emirate lists almost 200 VC funds, according to start-up tracker Tracxn.
Start-ups from the UAE accounted for 61 per cent of $1.2 billion raised in the first half of 2021, according to Magnitt. A separate report by the Dubai Chamber of Commerce and Industry showed that start-ups in Dubai and the UAE normally attract 50 per cent of total funding in the Mena region.
San Francisco topped the overall index, owing to its strength in company R&D spending and green technologies, while London dominated in FinTech and start-ups. The British capital also had the most perfect scores, including in tech ecosystem, universities R&D, banking and financial services, hospitality, IT and travel.
Beijing was ranked the top city in the fields of AI and machine learning, and education and mobility.
Cities with the most funded start-ups also scored strongly for venture capital funding, specifically London, New York and San Francisco, according to the report.