The ‘Tech’ Snowball Effect

 The ‘Tech’ Snowball Effect
Ammar Al Malik, Managing Director of Dubai Internet City and Dubai Outsource City
Published: 22 April 2019 - 10:47 a.m.

Back in a 2016 funding round, Dubai-based ride-hailing company Careem became the only unicorn in the region with a valuation of about US$1 billion, catapulting it into the league of the most bankable tech startups in the Middle East.

On 26 March 2019, Uber announced its acquisition of Careem in a historic US$3.1 billion deal. The move aligns with Dubai's ambition to surpass milestone after milestone in its pursuit of excellence and is a testament to the emirate's thriving technology ecosystem that presents opportunities for companies and investors beyond real estate.

Careem's latest achievement follows the full acquisition of classifieds site Dubizzle by South African internet and media group Naspers for US$400 million in January 2019, and e-commerce giant Amazon's 2017 takeover of Souq.com for US$650 million. Such deals have positioned Dubai on the global map as an increasingly lucrative business and investment destination for those in the tech sphere.

For two decades, Dubai Internet City (DIC) has been home to some of the biggest regional tech businesses - including Careem, Souq.com, Dubizzle, Property Finder and Anghami - and has been at the heart of the UAE's rapidly maturing digital landscape. Over the last few years, we have witnessed an increasing number of multi-million- and multi-billion-dirham deals emerging from our technology hub with a greater frequency than ever before.

This is clear proof of Dubai's conducive business infrastructure and enabling environment for local, regional and global companies to evolve and scale up, supported by a visionary leadership and business-friendly policies and initiatives.

We firmly believe that success breeds success. With its sheer magnitude, the Careem deal is sure to inspire young innovators across the region and translate into impressive numbers. This story will resonate for years, and highlight the growth potential of Dubai's startups and entrepreneurs to global investors.

Locally and regionally, we should see a surge in interest when it comes to investing in venture capital firms and startups, as is already evident today with opportunities available to anyone keen to leverage them. As a related benefit, the heightened demand from global investment firms will supply the ecosystem with necessary capital.

Moreover, from a talent and people perspective, Dubai shows a lot of promise for the foreseeable future. Easier visa regulations - encouraging skilled professionals, entrepreneurs and graduates to make their mark here and establish startups - in addition to relaxed foreign company ownership laws, will be important catalysts for attracting the best and brightest talent to the region.

From now, fostering this ecosystem and developing an innovative, knowledge-based economy mandates nurturing a locally grown workforce equipped with the skills necessary to succeed regionally and globally.

One of the key commitments of the Fifty-Year Charter, announced in January 2019 with the aim of improving life in Dubai, is to encourage student entrepreneurship at the university level. These efforts have a strong potential to initiate a snowball effect on the entire ecosystem that will see a rising number of students opting to become entrepreneurs and launch startups early on as the economy continues to diversify and capital flows in.

At DIC - the key driver of the UAE National Innovation Strategy, we eagerly anticipate the degree of ingenuity and innovation the following years will bring to the city. As His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, said, DIC has transformed the desert into a regional technology hub, and we look forward to the next phase of growth that Careem's acquisition and similar deals herald.

Congratulations to Careem's founders - Mudassir Sheikha, Magnus Olsson and Abdulla Elyas, to Careem's staff and investors, and to Uber for this extraordinary watershed in the history of regional technology startups.

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