MENA's startup growth continues to be led by Dubai: over $11.7B lifetime raised across 306 scaleups

MENA's startup growth continues to be led by Dubai: over $11.7B lifetime raised across 306 scaleups

By Erika Masako Welch, 20 June 2023

Forget About Startups. It's All About Scaleups.

In recent years, the Middle East & North Africa (MENA) region has witnessed significant growth of scaleups, defined as startups who have raised US $1 million in capital, or more. In 2022 alone, 158 new scale-ups were added, bringing the grand total to 749 scale-ups across the 19 countries in MENA (excluding Israel), that have raised a total of over US $19.5 billion cumulatively over the years.

We see the same trends continue. Dubai was the first entrepreneurial hub in MENA (excluding Israel) for start-up activity, and it continues to maintain this leadership position.

It has acted as a safe harbor for many regional start-up founders to relocate to, to get better access to talent, capital and mentorship. Every year, more and more investors have also been flocking to the city on the Arabian Sea, setting up funds and looking at opportunities to invest across the region. And for many cities in MENA, Dubai is a shining example of what it takes to become a global hub for entrepreneurship. 

Dubai is the King of Scaleups in MENA

Today, Dubai is home to over 40% of the scale-ups in MENA, with 306 scale-ups calling the Metropolis home. Dubai still accounts for over 90% of all scale-ups in the country, which is home to 338 scale-ups in total; the majority of the remaining 33 scale-ups in the country are headquartered in the country’s capital, Abu Dhabi. 

Dubai’s 306 scale-ups have raised over US $11.7 billion in funding over the course of 2010 through till 2022, which represents an impressive 60% of the total cumulative fundraising total in MENA. 2022 saw the most number of international investors investing in Dubai-based startups, increasing exponentially from the year before. 



In fact, there are little to no signs of Dubai’s leadership position waning, although other cities in the region are also producing strong start-ups backed by significant capital. Cairo plays second-best host with 135 scaleups calling Egypt home, and Riyadh rounds out the top three cities with 93 scale-ups situated in the Saudi capital. 

Investors we spoke to, in Dubai and across the region, all seem to welcome the strengthening of startup ecosystems in this part of the world, saying it can only benefit all start-ups, founders and investors in the end – as start-ups in MENA rely on healthy markets across the region to gain the market share and customer base that they need. The more stable and supportive these economies are of tech startups and their innovative business models, the more opportunity for growth for startups and startup investors alike.

2022 had a number of important highlights for Dubai and the region as a whole. In 2022, scale-ups across MENA raised over US $6.5 billion; that’s one-third of the region’s lifetime total. Six mega-rounds valued at over $300M were completed in 2022 (out of a lifetime total of 12), indicating the level of maturation of many of the startups we are seeing today. Mega rounds contributed to over 35% of all scale-up funding in 2022.

Breaking into the Billion Dollar Club

2022 also marked the second year in a row that Dubai-based startups collectively raised over US $1 billion. In fact, in 2022, Dubai-based startups doubled-down on their prior year results, fundraising over US $2 billion. As many aspects of this report will show, Dubai-based start-ups lead the charge in terms of total capital fundraising within an ecosystem, total lifetime capital raised by individual scale-ups, most successful exits, largest fundraising rounds, as well as being home to the most number of unicorns in the region. 

Just as impressively, Saudi Arabian startups raised over $1 billion in capital in 2022, and have reached this level of growth in record time. On January 5, 2022, Saudi-based food-delivery aggregator, Jahez, set a precedence by listing on Saudi Arabia’s secondary market, Nomu; Jahez’s public listing with a market capitalization of US $2.4 billion showed investors that IPO exits were feasible in the Kingdom. Investors in Dubai are rallying behind Saudi’s growing startup ecosystem, and many have also voiced their support for Dubai to follow Riyadh’s lead, and put in place a plausible path for startups to raise capital via IPO on the Dubai stock exchange. The jury is still out on SPACs, though recent boom-and-bust SPAC fueled IPOs on foreign exchanges have not proved very effective for MENA scale-ups. That said, Dubai-based startups are best positioned in the region for the next wave of IPO growth stories, as only startups in Dubai can lay claim to having raised Series E and Series F pre-IPO funding rounds.

Dubai VCs warn of Market Corrections in 2023

Investors also tell us that they expect to see some market corrections in 2023, perhaps a sort of ‘funding winter’ taking-hold, as we have already begun to witness in the rest of the world. M&A and market-consolidation is expected over the next 3-5 years and will be the name of the game for the largest and most profitable entities to cement their positions. 

To get the lay of the investor landscape across Dubai and MENA, and for insights provided by the investors backing the start-ups and scale-ups that are changing the face of entrepreneurship in the region, read the report by clicking here.

Related: Dubai Chamber of Digital Economy Publishes 2023 Venture Report; Dubai adds 64 more scale-ups in 2022

Related Report

Dubai's Venture Capital Ecosystem

There are 749 scale-ups that have raised over US $1 million in fundraising in the Middle East and North Africa region; collectively raising over US $19.5 billion, cumulatively, as of December 2022. Over 40% of these scale-ups call Dubai home.

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