The Emirates and Saudi Arabia? They Are Running Fast

She was supposed to stay in Dubai for three days, the time to exchange business cards with promising investors and head back home. She has ended up staying there for three years and has no intention of leaving. "The United Arab Emirates can be looked at as a startup, if you compare them to Western countries," says Chiara De Caro, Bocconi alumna and Managing Director of AGCC, an accelerator that helps governments, companies and startups undertake innovation paths. It was natural for her to anchor in the Gulf: those who sail in search of new tech treasures know what seas you need to sail.

What is it like to innovate in this part of the world?

Compared to Europe, there is a substantial difference: here there is a nascent system. Consider that Saudi Arabia opened to the outside world only six years ago. The startup market is particularly recent and perhaps immature, but it is moving at a much faster speed than in the West: I started working on my first startup in Italy in the 2000s and I can assure you that the evolution was much slower.

A velocity favored by the amount of capital circulating in the Gulf...

Available capital is greater, but funding no longer is only domestic: data shows that 46% of invested capital comes from the United States, with foreign countries paying increasing attention to this part of the world. While previously people came here knocking on doors to collect money, now they bring it. And this happens because the whole system is much faster and more reactive, it is not just about budgets.

What does that mean?

It's all different compared to Europe, let's say that the United Arab Emirates and Saudi Arabia are startup economies compared to the West. A change initiated by governments that have incentivized, helped and strengthened the innovation ecosystem also with deregulation mechanisms and more flexible laws compared to Europe, which allow you to test products and do things that you could only imagine elsewhere. In short, there is an understanding here that the possibility of diversifying the economy comes from innovation, so programs such as UAE 2030 and Saudi 2030 have been promoted with the intent to spread digital culture across society.

What is the effect on the venture capital market?

Investments run at a different pace here. In 2024, Italy recorded $1.2 billion in investments, in the Middle East-North Africa $2.2 billion were raised, of which 45% in the United Arab Emirates and 35% in Saudi Arabia. Almost $1.8 billion between the two. And the 2025 figure will certainly be much higher: just considering May, investments in the United Arab Emirates are 30% higher than in the whole of 2024. We are talking about a lot of money.

Where is investment directed?

There is a lot of focus on the early stage, and it is normal if we remember that this is a growing ecosystem without too many companies to support in the scaleup phase. Like any emerging market, at the beginning there was a lot of copycat of what worked in other countries, just think of Talabat's food delivery platform. There is also a lot of fintech, as it is always one of the first areas of interest, even if now the interest of investors is shifting to sustainability and artificial intelligence. Over the last three years I have also noticed greater quality in the startups being created: there are still the traits of the immature ecosystem, but everything is developing quickly.

Innovative companies also respond to the needs of the territory. What is being asked from innovation?

For the Gulf, there are some particularly relevant sectors, linked to agriculture and water management. Technological solutions that impact these segments can be successful even if you don't have anything disruptive at the moment. Our job at AGCC is to bring advanced technology to the territory and enable entrepreneurs to grow and expand their business ideas in the rest of the world by having at their disposal facilities, money and a strategic geographic position.

What kind of startuppers can you find in Dubai and Riyadh?

The profile of young entrepreneurs has changed a lot, because those who come here now stay for a long time. They are often expats coming from Singapore, Hong Kong or the United States. Citizens of the world who want to profit from the strong growth of the Gulf. Those who come to set up a startup find that quality and talent are not lacking here.