Middle East unicorns will flourish, predict VCs

January 26, 2024, 8:25 AM

For the first time since 2015, there were no deals worth more than $100 million last year in the UAE.

Despite this, venture capitalists predict the region will see the creation of at least 10 unicorns – defined as a privately held startup company with a value of more than $1 billion – within the next five years.

“Our very first fund in the region was launched in 2018,” Courtney Powell, managing partner at California-based venture capital company 500 Global, told AGBI.

“It was a $33 million fund and we invested in 180 companies from that. Today we have 12 to 13 companies valued at over $100 million.

“Nobody would have thought that the very first fund would have generated that sort of portfolio.”

A report by startup data company Magnitt revealed that overall funding in the UAE declined by 46 percent compared with 2022, but the Gulf state retained its title as the most active region by deal count.

That, according to Powell, is a “more telling KPI about the health of the (startup) ecosystem”.

“Rather than looking for funding gaps, it’s really important to look at the number of new startups that are being created across the region,” she said.

“In the US there are over 10 times more startups being created per capita than in the Middle East. We want to see more and more startups created in the region,” she added.

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