Dubai launches $272m fund to attract more tech company listings

The Future District Fund aims to establish 1,000 digital companies in the next five years

The new fund will support Dubai’s digital economy and projects using the latest technology. Reem Mohammed / The National

Dubai has launched a Dh1 billion ($272.3 million) Future District Fund to support technology companies and encourage them to list on the emirate’s stock market.

The fund will help to establish 1,000 digital companies in the emirate in the next five years, Sheikh Maktoum bin Mohammed, Deputy Prime Minister, Minister of Finance and Deputy Ruler of Dubai, said in a tweet on Monday.

The fund, an initiative of Dubai Securities and Exchange Higher Committee, will support the emirate’s digital economy and projects using the latest technology and develop the economic sectors of the future.

It aims to increase investment in start-ups to Dh4bn, from Dh1.5bn currently.

Dubai, the commercial and trading hub of the Middle East, is trying to tap into the IPO rush that has been sweeping the region as it seeks to list 10 state-owned entities in the Dubai Financial Market as part of a broader strategy to double the financial market’s size to Dh3 trillion.

Dubai Water and Electricity Authority, the government-owned utility company, and road toll system Salik will be among the first to go public, Sheikh Maktoum said on Twitter this month.

The government also launched a market maker fund worth Dh2bn to attract listings from sectors such as energy, logistics and retail, while the Future District Fund target is expected to be technology companies.

The Future District Fund also appointed Sharif El Badawi as its chief executive. Since the mid-1990s, Mr El Badawi has worked with several tech firms in Silicon Valley, including Google, before moving to the region to focus on start-up investing.

The Future District Fund is the “evergreen venture capital fund”, anchored by Dubai International Finance Centre and Dubai Future Foundation, the fund said on its website.

It aims to put half of its investments into venture capital funds with a local focus and the other half into start-ups directly or through Future District affiliated programmes.

“The mandate of the fund is to boost start-up and venture capital investing and business activity in Dubai and the region … providing a healthy return to investors while facilitating diversified GDP [gross domestic product] growth and job creation for the next generation of industries and skills,” it said.

The fund intends to catalyse Dubai’s venture financing through direct investments that propel the growth of local and regional start-ups, attract international companies and support the growth of top firms through direct and co-investments.

It will also support the overall ecosystem by investing in the top regional funds, attract leading international VC funds to set up in Dubai and fuel the next generation of fund managers in the emirate for emerging funds.

Dubai was among the first cities globally to recover from Covid-19 pandemic and reopen its economy for business, while ensuring strict compliance with health and safety measures.