Dubai Digital Investments plans IPO to finance technology deals

New platform founded by entrepreneur Faisal Belhoul aims to raise $272m from its planned listing in Dubai by end of the year

A visitor holds prayer beads while looking at financial information screens at the Dubai Financial Market (DFM) in Dubai, United Arab Emirates, on Tuesday, Nov. 10, 2015. Dubai's index declined for three straight months after a collapse in the price of crude battered economies in the oil-producing nations of the Gulf Cooperation Council. Photographer: Jasper Juinen/Bloomberg
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A new platform founded by entrepreneur Faisal Belhoul is planning an initial public offering (IPO) in Dubai by the end of this year to invest in technology companies.

Dubai Digital Investment aims to raise Dh1 billion ($272 million) from the listing, Mr Belhoul told Bloomberg in an interview.

“We’ve been granted permission by the local authorities to launch a greenfield investment company that focuses on the technology sector,” he said.

Mr Belhoul, vice chairman of the Dubai Chamber of Commerce and Industry, was previously involved in the IPO of Al Noor Hospitals Group in London in 2013 and the share sale of another healthcare and education company in Dubai a year later.

With his latest venture, he plans to invest in regional and global technology opportunities alongside VC firms and founders. That also fits in with Dubai’s ambitions to become a major technology hub.

The greenfield listing will allow retail and individual investors to gain exposure to technology companies, Mr Belhoul said. He added that many of those smaller investors are otherwise unable to buy into tech companies because the average investment size is too big.

Greenfield listings were popular in Dubai about a decade ago, but have since faded.

The city’s last such IPO, healthcare and education investment company Amanat Holdings, was also helmed by Mr Belhoul.

The company's stock dropped 20 per cent on debut in 2014 and still trades below its offer price. Retail and dining company Marka, which raised $75m from a greenfield IPO in 2014 and never reported a profit, wound down in 2019.

The Middle East just clocked its best first half for IPOs on record, spurred by high oil prices and equity inflows.

Dubai Digital’s plans to seek opportunities in technology also coincide with a rout in that sector, with investors turning away from what they see as overpriced assets. There are others eyeing bargains in the sector, though. Abu Dhabi’s Mubadala Investment is defying the rout in valuations to invest in technology-focused businesses.

“The current adjustment in valuations makes it a very attractive entry point for any investor focusing on the tech space,” Mr Belhoul said. “We believe the market conditions have only made our strategy more compelling.”

Updated: July 15, 2022, 3:02 PM