The UAE is the first in the region to attract venture capital investments in emerging projects in 2021
The United Arab Emirates ranked first regionally, at the level of the Middle East and Africa, in attracting venture capital invested in emerging projects, according to the Magnitt platform report on “Venture Capital Markets and the State of Startup Financing in the Middle East, Africa, Turkey and Pakistan.” for the year 2022.
The report described the UAE as the most active market in the Middle East and Africa, as it succeeded in attracting venture capital amounting to about 4.3 billion UAE dirhams (US$1.165 billion) in 2021, achieving a significant growth leap in this regard compared to 2020, at a rate of up to 93%, which is the first time in the history of the UAE that venture capital investments in emerging projects exceed the $1 billion barrier.
His Excellency Dr. Ahmed Belhoul Al Falasi, Minister of State for Entrepreneurship and Small and Medium Enterprises, said that the result achieved by the UAE in the field of attracting venture capital and financing emerging projects represents a new achievement added to the track record achieved by the country thanks to the support and vision of its wise leadership in developing and diversifying its national economy Providing an advanced ecosystem for entrepreneurship and emerging, small and medium companies in the UAE, and consolidating its position as the first destination for entrepreneurship and entrepreneurial projects in the region and the world, in line with the goals of the fifties and the determinants of the UAE Centennial 2021.
His Excellency added that 2021 is an exceptional year for the entrepreneurship sector in the UAE, as the country has succeeded in achieving a major development leap, up to twice the volume of venture capital investments that have been attracted and attracted to finance start-ups and small and medium-sized companies in the country, in conjunction with the launch of integrated national projects. And a giant to achieve a fundamental shift in the entrepreneurship system, foremost of which is the Home of Entrepreneurship and the fifty projects aimed at serving entrepreneurs and owners of entrepreneurial projects.”
His Excellency pointed out that the result is evidence of the strength of the national policies and strategies that have been implemented to enhance the competitiveness and attractiveness of the business environment and entrepreneurial activities in the country in particular, which are derived from the vision and directives of the wise leadership and the 50 Principles, and reflect the strength of the economy based on knowledge, innovation and technology in the country through tools Diverse capital, the most important of which is risk capital, and it gives a clear message that the country’s markets are able to attract the best quality investments and represent the first destination to link new and pioneering projects with local, regional and international investors to support and help them achieve high levels of success and access to local and foreign markets, in a manner that provides a system that supports the process Companies are developing at a rapid pace and placing them on a new path of regional and global competitiveness, starting from the land of the UAE.”
In detail, the Magnet report indicated that the venture capital investments received by the UAE in 2021 were distributed among 155 start-up projects in the country, with a growth of more than 12% compared to 2020, and the report indicated that the UAE ranked first in all regions Covered by the report, and include the Middle East, Africa, Turkey and Pakistan, in terms of the average size of a single financing deal, which amounted to about 28 million dirhams in 2021, an increase of 72% over the average volume of financing deals concluded in 2020, which consolidates the position of the UAE as an incubator environment For enterprise growth and support of the unicorn corporate model.
The report also indicated that the UAE ranked first in the Middle East and Africa in the number and volume of acquisition deals, as it witnessed 11 acquisitions out of 35 operations in the region, and the total volume of these deals amounted to 2.2 billion dirhams (605 million dollars), which reflects The vitality of the startup market in the country and its promising prospects for growth, especially with regard to the return on investment for business owners and investors, and prosperity in the labor market and jobs in this sector in the country.
According to the report, the UAE accounted for about 46% of the total venture capital received by the Middle East and Africa combined in 2021, and more than 26% of the total number of deals concluded in this same region last year, which reflects The high confidence of regional and international investors in the UAE markets and the promising prospects for growth through them.
The report indicated that the top five activities in attracting capital in this region included, in order, food and beverages, financial technology, e-commerce, transportation and logistics, and enterprise software.
Two Emirati companies were among the five companies that attracted the five largest financing deals in this region, namely Kitopi Food and Beverage, which secured a financing of 1.5 billion dirhams (415 million dollars), which is the largest financing deal in the region, and Pure Harvest Farms. Pure Harvest Smart Farms, which secured 238.5 billion dirhams ($65 billion), is the fifth largest financing deal in the region.
The report also stated that the UAE represented the preferred destination in the Middle East and Africa for the relocation of the main and regional headquarters of emerging companies to it, noting that the most prominent of these operations in the country’s markets last year was the move of the Lebanese music broadcasting company Anghami via digital platforms to Abu Dhabi Global Market, the Egyptian company “Swvl” for transformational mass transit solutions based in Dubai, and the American “Stripe”, which is one of the leading financial technology companies in Silicon Valley in the United States, which has chosen Dubai as the starting point for its regional expansion in the Middle East and North Africa, and WeWork, an American company for commercial real estate and office workspace solutions, which operates today in Abu Dhabi and Dubai.
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