Banking & Finance

Dubai startup fund aims to be worth $7bn within 10 years

March 21, 2023, 3:39 PM

The Dubai Future District Fund for tech startups is unanchored by Dubai Future Foundation and Dubai International Financial Centre

Government-backed VC fund specialises in tech startups
Plans to raise $300m from both the public and private sector this year
Fund for long-term sustained growth, says CEO

Dubai Future District Fund is aiming to have $7 billion worth of assets under management within 10 years, creating more than 185,000 jobs and contributing $20 billion to the emirate’s gross domestic product.

The government-backed fund – launched in 2020 by Dubai’s ruler Sheikh Mohammed Bin Rashid Al Maktoum – has invested $28 million to date, with 16 investments in its portfolio, including 10 directly into startups and capital deployed into six funds.

DFDF CEO Sharif El-Badawi said the number of investments will increase to 180 companies and 55 venture capital funds over the next decade, with expected returns in the region of $27 billion.

El-Badawi’s forecast would see the fund’s portfolio realise a market cap of $43 billion, and that it would aim to deliver commercial returns of 3-5x over the next 10-15 years.

“We’re not here to flip a quick buck,” he said. “Venture capital is responsible for long-term sustained growth.”

Anchored by Dubai Future Foundation and Dubai International Financial Centre, DFDF is the region’s first evergreen venture capital fund to specialise in early-stage, high-growth technology startups for emerging markets.

It currently has $200 million worth of assets under management, but plans to raise a further $300 million from Dubai Inc investors – government authorities, government-related entities or quasi-government entities – in the first half of this year.

“It’s time for Dubai Inc entities to reverse course in a way where we all come together on a single platform,” El-Badawi said.

DFDF will seek another $300 million from the private sector before opening up the final 20 percent to qualified retail investors, with the aim of reaching $1 billion by the end of 2024.

El-Badawi said: “We’re saying invest with Dubai, in Dubai’s index, because if we do our job right, we have all the best funds under our platform and all the best technology startups, diversified across sectors and stages.”

“I was always concerned about the effect on small companies of the big tech companies, but there’s now so much support for early-stage startups,” he said.

Research firm Magnitt reported in January that while the UAE was the only Mena country to see the total amount of funding raised by its startups passed the $1 billion-mark last year, funding was still down overall. Data showed that UAE startups raised $1.190 billion from 153 deals in 2022, a year-on-year decline of 20 percent.