Dubai home to over 40% of MENA scale-ups, says report

Dubai is home to over 40 per cent of MENA region's scale-ups, with 306 scale-ups calling the emirate home, according to the latest report from the Dubai Chamber of Digital Economy.

According to the Dubai's Venture Capital Ecosystem” report, Dubai still accounts for over 90 per cent of all scale-ups in the country, which is home to 338 scale-ups in total.

It said that a total of 749 scale-ups across the MENA region (excluding Israel), have raised a total of over $19.5 billion cumulatively over the past decade (2012-2022), with UAE scale-ups accounting for 65 per cent of total cumulative capital raised.

Dubai’s 306 scale-ups have raised over $11.7 billion in funding over the course of the past decade, which represents an impressive 60 per cent of the MENA region’s total cumulative fundraising total.

In addition, in 2022, Dubai-based startups doubled-down on their prior year results, fundraising over US$2 billion.

Meanwhile, the growth of funding in the MENA region has exceeded $4 billion in 2021 and 2022 and the number of mega-rounds of $300 million or more has seen an increasing trend with three seen in 2021 and six in 2022, including two scale-ups listing on stock exchanges.

In 2022, there was a significant shift in the number of funding rounds, where scale-ups raised funding, and a trend towards larger cheque sizes and funding bracket gained momentum. In the $100 million to $1 billion range, funding rounds increased by more than 100 per cent between 2021 and 2022. Other funding ranges also saw increases between 20 per cent to 87 per cent.

Considering the source of capital raise, venture capital and corporate rounds accounted for over three quarters of the capital raised, while IPOs and ICOs accounted for nearly equal share.

The number of scale-ups have also increased considerably, in Dubai, growing 26 per cent between 2021 and 2022. In terms of absolute numbers, Dubai saw an increase of 64 scale-ups between 2021 and 2022 growing from 242 to 306 scale-ups.

Venture funding in Dubai has seen tremendous growth in the past decade. From a time of only seed stage and earlier rounds, Dubai has grown to become the only city in the MENA region to be home to startups to raise funds in Series E and Series F rounds.

The report, which was produced in collaboration with Entrepreneur Middle East, reveals that more than 30 per cent of the funding rounds are attributed to startups headquartered in Dubai, implying 87 per cent of all funding rounds for UAE-based companies are for firms headquartered in the emirate.

By 2031, the national digital economy is expected to be conservatively valued at well over $140 billion (from today’s $38 billion).