Dubai, which is home to 39 per cent of the Middle East and North Africa’s scale-ups, accounted for almost 57 per cent of the scale-up funding in the region last year, a report has shown.
A scale-up is defined as a company with 10 or more employees that has an average annual growth of 20 per cent over the past three years, the Organisation for Economic Co-operation and Development said.
Last year, Mena scale-ups collectively raised $9.1 billion, representing 0.12 per cent of the region’s total economy, the report, developed by Dubai Chamber of Digital Economy in co-operation with Mind the Bridge and Crunchbase, showed.
The UAE attracted 59 per cent or $5.4bn of the total funding, with Dubai alone accounting for 57 per cent of that amount.
Scale-ups in Egypt, the region’s most populous nation, Saudi Arabia, the Arab world’s largest economy, raised $1.4bn and $1.2bn, respectively.
The findings of the report reflect Dubai's continuing efforts to advance its digital economy and create a conducive environment in the emirate for scale-ups to thrive and grow, said Omar Sultan Al Olama, UAE Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications and chairman of the Dubai Chamber of Digital Economy.
The number of scale-ups in the Mena region reached 587 last year, up more than 322 per cent on an annual basis. The UAE accounted for the largest number of scale-ups (251), followed by Saudi Arabia (106) and Egypt (84).
“The UAE continues to add more incentives for businesses and start-ups. The introduction of golden visas, green visas, freelancer and entrepreneur visas are all bold and positive steps the country has taken to boost its value proposition,” said Hamad Buamim, president and chief executive of Dubai Chambers.
The Dubai Chamber report revealed that 26 Mena scale-ups relocated their headquarters inside the region to boost their growth.
The UAE was the preferred destination for relocation, with eight scale-ups setting up in the country, followed by Saudi Arabia (seven) and Egypt (four). About 41 scale-ups opted to expand their footprint beyond Mena, primarily to the US (13), the UK (five), France (five), India (three) and Canada (two).
“Venture capital is a crucial element needed to nurture thriving entrepreneurial ecosystems and advance digital economies. We will continue to work closely with public and private sector stakeholders to ensure a conducive environment for VC firms and investors, as well as entrepreneurs from around the world,” Mr Buamim said.