International startups are increasingly vying for an opportunity to establish their global hubs in the UAE to accelerate their growth. This is one of the key findings released today by Flat6Labs, the MENA region’s leading seed and early-stage venture capital firm, based on the company’s analysis of over 4,000 applications to five cycles of its Ignite seed funding and incubator program between June 2021 and October 2023.
During this nearly two-and-a-half-year period, the number of applications from startups based outside the Middle East and North Africa (MENA) region grew by an impressive 284%, validating the success of the initiatives made by the UAE’s leadership to attract the world’s most innovative business leaders to the country.
Flat6Labs also reported a consistent increase in the number of applications from UAE-based startups over the five cycles of the program, reflecting a 2x increase over the recorded window. While the Ignite program is open to startups from around the world, it was interesting to see that in every cycle, the number of applications from startups in Egypt was second only to that of the UAE.
“The steady and considerable increase in the number of applications to our program over each six-month cycle indicates just how rapidly the UAE is advancing its position as a global hub for tech entrepreneurship. The nation’s highly active VC and investor community, favourable legislation, rich talent pool, high standards of living, and coveted position as the gateway to the thriving MEA region, and indeed the world, make it ideal for disruptive businesses to establish their global headquarters,” said Ryaan Sharif, General Manager at Flat6Labs UAE.
Also significant was the increase in the number of applications by female-founded startups, which grew 244% over the last two and a half years. Impressively, female-founded companies accounted for 32% of all applications made to the Ignite program. Such maturing of the startup ecosystem is also evidenced in the fact that while two and a half years ago, the number of applications was evenly split between organisations in the ideation, launch, minimum viable product (MVP) and revenue-generating stages, today, the proportion is heavily skewed towards startups that have already started generating revenues.
“Female founders are certainly at a greater advantage than they were, say, a decade ago. Governments and investors are beginning to realise the positive economic implications of being more inclusive of women in the entrepreneurial ecosystem. Work remains to be done, but the mounting evidence of the above-average potential of female founders to lead successful startups, combined with the rise of female-led and female-focused VCs, is welcome,” said Sharif.
Flat6Labs also provided insight into the areas of business that pioneers are focusing their efforts on. HealthTech startups accounted for the largest number of applications to the Ignite program, followed by near-equal proportions of FinTech, FoodTech, and Transport & Logistics ventures. Interestingly, not far behind was the number of GreenTech companies, which also reflects the ongoing flight of capital towards sustainable investment opportunities.
Sharif offered his outlook for 2024, “The startups that will be especially well positioned to draw investor attention in 2024 are those that have based their disruptive innovations around sectors that the government is heavily backing. 2024, therefore, holds the most promise for FinTech, Generative AI, e-commerce enablement, HealthTech and Renewable Energy Tech innovators.”
