Dubai is undergoing a digital revolution fueled by the ambitions of investment firms such as the Dubai Investment Fund (DIF) and the UAE government’s support. In 2001, Microsoft established a regional base in Dubai.
The tech giant was persuaded to settle in the United Arab Emirates (UAE) due to a rent-free incentive that lasted for 50 years and a guarantee that all invested capital would be returned in full. It was the beginning of a trend in technology. As a result, companies such as HP, IBM, SAP, Oracle, 3M, and Google quickly established regional centers in Dubai. Because of this, a “cluster effect” was produced, and Dubai became an investment hub for technology companies. Today, Dubai Internet City is widely recognized as the Middle East’s equivalent of Silicon Valley. The location hosts some of the most successful startups in the Arab world, including Telegram, Yalla Group, Careem, Souq, Maktoob, Property Finder, Media.Net, Vista Global, and Kitopi, all of which have raised over one billion dollars.
Private sector investments in the United Arab Emirates are looking into new ways to broaden the country’s economy as part of the UAE government’s vision of a “Beyond Oil” economy. Following COVID, new regional investments focus heavily on the technology sector. The government actively encourages private investments in technology through 100% foreign ownership, zero corporate tax, easy exit plans for companies, robust commercial regulations, and alternative funding channels. The Arab nation is home to thirty different free trade zones, each of which offers a variety of financial and other benefits to domestic and international venture capitalists.
Some of the largest private equity companies in the world are based in the free zone known as Abu Dhabi Global Markets (ADGM), which is on par with other emerging economies such as Singapore, Malaysia, Israel, and the United Kingdom. One of the companies helping to drive change in the UAE is the Dubai Investment Fund (DIF). DIF actively invests in various types of technology companies and actively manages over 300 billion dollars in assets under management. The fund utilizes private equity partnerships to make investments in international stock markets and international businesses.
The Dubai Investment Fund was established in 2001, and despite multiple cycles of inflation and recession, it has maintained its strength. Its investment philosophy is still based on continuously diversifying its holdings and learning about new and developing technologies. DIF is investing in mainstream and alternative technology companies to rapidly expand its technology vertical.
In 2017, DIF continued to broaden its investment portfolio within the information technology industry and established new partnerships with established technology and emerging startup businesses. During that year, most of DIF’s investments were made in shares of companies such as Qualcomm, Intuit, PayPal, Booking Holdings, VMware, and AutoDesk.
“While we believe that we were extremely successful in growing the portfolio of companies we invested in during 2017, one thing is clear, investing in the right companies is our primary focus going forward,” stated Amir Shams, DIF’s CEO. “As DIF grows and the metrics for investments change, we are determined to create innovative opportunities for our portfolio as we seek out investments aligned with the three pillars of DIF – Diversification, Innovation, and Growth.”
According to Amir Shams, these investments will help the company’s investors reap the benefits of the forthcoming digital revolution in the Arab world. Through a complex web of long-term partnerships with multinational corporations, DIF is in an advantageous position throughout the entire tech chain that operates in the MENA region.
Investments in hydrocarbons, heavy industries, infrastructure, telecommunications, finance, and clean energy make up the bulk of DIF’s core portfolio. The fund’s technology investments will be able to leverage its core portfolio investments once it achieves majority shareholder status in some of the largest regional corporations and parent holding companies.
DIF is also involved in the UAE’s efforts to advance artificial intelligence (AI). In 2016, the investment fund was the first to launch an artificial intelligence lab in Dubai with the goal of developing machine learning capabilities and gaining insights into AI’s potential future uses. Established companies and regional tech startups continue to look to DIF as an indispensable investment partner. It is one of the funds that have deep roots in Asia, Europe, and the United States, making it one of the most diversified funds in the world. More than 7,300 individual investors and institutions are served by the fund and are located in 61 different countries. The company is interested in developing long-term partnerships with other businesses, institutions, and governmental organizations to enhance the quality of life of the surrounding community as well as the natural environment. The Dubai Investment Fund continues to be one of the most prominent investors in green energy across Europe, Africa, Asia, and the Middle East.