The United Arab Emirates (UAE) has seen a boom in tech startup and investor activity over the last year. In fact, the UAE saw over 45% growth in the number of privately owned tech startups that raised equity rounds of funding in 2016 compared to 2015.
The country is now home to one unicorn company valued at $1B; the ride hailing company Careem Networks reached unicorn status in December 2016. The e-commerce company Souq.com received a billion-dollar valuation in February, last year. However, Amazon is reportedly now in the process of acquiring Souq.com, for a price that has been reported to be between $650M-$750M.
Another Emirati e-commerce company, Noon.com, obtained $1B in funding in November 2016, and has said it will begin operating in 2017.
The most active venture capital firm in the UAE investing in tech startups is Wamda Capital.
Using CB Insights database we charted the rise of equity funding to tech startups in the UAE and mapped the most active VCs and corporate VCs based in the UAE that invested globally in tech startups since 2012. We also profiled the quarterly investment activity of Wamda Capital over the last two years.
Annual UAE Tech Startup Funding History
Tech startups in the UAE have raised more equity funding deals every year since 2012. Last year, deals peaked at 38. Dollars invested in Emirati tech startups first broke $100M in 2014, and sky-rocketed to over $1.7B last year. However, the $1B funding round to Noon.com from Mohamed Alabbar, and the Public Investment Fund of Saudi Arabia, accounts for an outsize portion of last year’s funding total. Nevertheless, if we remove that round, the amount of equity funding to private tech startups in the UAE, still increased 588% in 2016.
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Most Active UAE VCs
The most active venture capital investor based in the UAE by number of unique companies funded since 2012 is Wamda Capital, with 20 unique investments; two more than the next most active startup investor in the UAE, Flat6Labs Abu Dhabi. Flat6Labs Abu Dhabi, supported by Twofour54, primarily makes seed-stage investments in UAE startups. Rounding out the top three is BECO Capital, with 12 companies funded. The ten most active VC firms in the UAE have all invested in three or more tech startups since 2012.
Turn8, a venture fund established by the global trade corporation DP World, is widely considered one of the most active early-stage startup investors based in the UAE, but is excluded from this analysis due to the limited availability of disclosed information regarding the firm’s investments.
STC Ventures, the No. 5 most active UAE investor, is an independently managed venture capital fund whose anchor investor is the Saudi Telecom Company. STC Ventures is managed by Iris Capital, and has its headquarters in the Emirate of Dubai. Womena, tied at 5th, is an angel investment network for high-net-worth women in the Gulf that invests in startups.
Twofour54, in 7th, is a subsidiary of the Media Zone Authority Abu Dhabi. Along with STC Ventures, these two firms are the only corporate venture capital investors in the top ten.
Dubai Silicon Oasis, tied for eighth place, is a public-private partnership that invests in tech startups in the UAE, among other services.
UAE VC Investments Mapped
Notable common investments between the firms in our infographic below include the ride-hailing company Careem Networks, with partial backing from Wamda Capital, BECO Capital, and STC Ventures; the financial products comparison site Compareit4me with backing from Wamda Capital, Dubai Silicon Oasis, and STC Ventures; and the online marketplace The Luxury Closet, with backing from Wamda Capital, Dubai Silicon Oasis, twofour54, and EquiTrust. All three startups are based in the Emirate of Dubai.
These investors also participate in deals to companies outside the Middle East. For example, the US-based unicorn company Apttus, valued at $1.3B, obtained an $88M Series D round in September 2016, from investors that included Gulf Islamic Investments.
Note, several investments associated with Wamda Capital, in the mapping below are associated with MENA Venture Investments (MVI); the predecessor of Wamda Capital.
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Spotlight: Wamda Capital Annual Financing Activity
The Wamda Growth Stage Fund is a $75M fund launched in June 2015 by Wamda Capital. That fund was pre-dated by MENA Venture Investments (MVI), a $55.7M venture fund. Wamda Capital’s most active investment quarter was in Q3’16 when it participated in five deals. Wamda has invested in disclosed follow-on rounds to three companies in its portfolio: Careem Networks, Compareit4me, and the online fashion retailer for Muslim clothing Modanisa. Seed deals with Wamda Capital’s participation include: Lunch:on ($500K), KapGel ($1M), GEEKS ($600K), and Boxit ($600K), among others.
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