Gulf edges closer to its first homegrown tech unicorn

Creative Commons/Richard Tanzer Fotografie

• Head of DIFC’s Fintech Hive says region is full of potential
• Buy now, pay later platform Tabby is candidate
• Global fintech funding fell 46% to $75.2bn in 2022

The Gulf region is two years away from realising its first tech unicorn, according to Mohammad Alblooshi, head of Dubai International Financial Centre’s Fintech Hive.

Becoming a unicorn – a company with a valuation over $1 billion before being listed on the stock exchange – is the dream of many tech startups.

In the fintech space the number is dominated by companies from the US and Europe. 

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But Alblooshi expects that the Gulf is not far away from adding its name to the growing list.

“I believe we will see unicorns in the fintech space within the next 24 months,” he said.

“We’re still below our true potential in the region. There’s so much more that fintechs will achieve.”

He pointed towards Mubadala-backed buy now, pay later platform Tabby as a potential candidate for unicorn status.

The startup raised $58 million in a series C round in January, valuing the company at $660 million.

Alblooshi said that while other countries across the world were quick to capitalise on the growth of fintech following the financial crisis of 2008-09, Gulf countries only arrived on the scene around 2015.

“I think we’re a bit late but the good thing about the region is that it grows at an unparalleled pace,” he said. 

“The region is also a corridor that’s open towards India and Africa.”

During 2022 investment in DIFC’s fintech and innovation community exceeded $615 million.

The total number of active firms in the sector grew 36 percent to 686, with fintech companies attracted from across the region, India, the UK and the Far East. 

The fintech and innovation sector in the Middle East, Africa and South Asia region is growing at pace with a market value forecasted to double in size from $135.9 billion in 2021 to $266.9 billion in 2027, according to DIFC FinTech Hive’s 2022 Fintech report. 

However, global fintech funding fell 46 percent to $75.2 billion in 2022, with the slowdown particularly acute in the final quarter of the year, with just $10.7 billion recorded – the lowest quarterly level since 2018, according to stats from CB Insights.

Alblooshi, who was speaking ahead of the inaugural Dubai Fintech Summit to be held on May 8-9, said that while the last two quarters witnessed a slowdown in capital allocation for fintech startups, he is confident the region can withstand any global slump.

“Some of the startups that have capital committed from global VCs have probably been tapered down by what’s happening in the west, especially in the US. That has slowed down things a bit,” he said.

“But at the same time you still have a lot of capital in the region that is flowing into the markets.”