September 5, 2022
August 31, 2022
Despite Covid-19 and the geopolitical conflicts happening on the world stage, the economy in the UAE is blooming. The Emirates have recorded a 47% growth in non-oil exports, 16% in foreign investments and 126% in new companies that are registered in the UAE. In 2021 the country’s Gross Domestic Product grew by 3.8%, exceeding the estimations of international institutions that predicted1.7% growth. For this year the Central Bank expects that the UAE’s economy will expand by 5.4%, largely due to its Covid-19 policy. During the pandemic the country managed to adapt quickly onto a new way of living and was able to keep most of its businesses open. On top of that, 33 initiatives were approved by the government to support different sectors during Covid-19. These initiatives have had 100 percent (!) success rate in empowering the economy, developing sectors, and opening new markets. The International Monetary Fund projects the GDP to grow with 4.2% in 2022.1
The United Arab Emirates is an expat country: expats from all over the world cover for 89% of the population! Only 11% of the people living in the UAE are local and will call themselves Emiratis. To ensure the locals benefit from the flourishing economy, the Cabinet of the UAE has announced a series of initiatives to boost the Emirati workforce in the private sector.
These initiatives include paid training programs, subsidies and support for local entrepreneurs leaving the public sector. Citizens that are currently working in the government sector will be given paid leave (half of their current salary), for the duration of an entire year, in order to start a business. The plan is to have 75.000 Emiratis working in the private sector by 2026, which would make10% of the entire private-sector workforce.1
The UAE’s private sector is large. The country aspires to be THE entrepreneurial nation and to be the home of 10 unicorn startups by 2031. It also plans to be one of the top 3 countries on the Global Entrepreneur Index (the UAE ranked 4th in 2020).5 With a population under 10 million, it has 4,000 startups. The investments numbers in the UAE are also above the global average. The median Seed Round in Dubai is $500,000 and the median Series A Round is accounting to $3.3 Million approximately. 4
In Proptech the country is also making great progress. The UAE’s ever growing real estate sector indicates an accelerating growth in Proptech adoption.
The UAE is home to a number of well performing Proptechs, like i) a real estate crowdfunding platform that allows users to invest in real estate in a simple, transparent and hassle-free manner, 2) a platform for developers, real estate brokerages, and house hunters and 3) an online home financing broker, allowing users to search and choose a mortgage.2
We are planning to follow the developments in the UAE Proptech sector closely!
We really think the UAE region is fantastically placed to drive some of the next waves of innovation in PropTech. Supply chain costs (shipping costs are at five times what they were last year), energy usage and digital construction techniques, are some of the challenges we feel will be next on the immediate horizon. The UAE region has some enormously innovative and large enterprises who can fund and deploy solutions to overcome these issues...
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