Investors in the UAE and Israel are moving to strike deals in a business environment transformed by a diplomatic breakthrough between the two countries. One key sector that is likely to bring together the economies of the nations are start-ups.
Led by Dubai and Abu Dhabi, the UAE has one of the best ecosystems for start-ups. More than a third of start-ups in the Middle East and North Africa are reported to be based in the UAE, which seeks to be a powerhouse in the technology sector.
Israel’s high-tech sector — an industry that has earned it the nickname start-up nation — makes up more than 40 per cent of the country’s exports, according to its economy ministry.
“The new partnership makes a compelling and cogent case,” Sabah Al Binali, an Emirati entrepreneur, told Saudi-based Arab News yesterday. “The UAE has financial capital in excess of what can be put to effective use within the country, which is why we have sovereign wealth funds. Israel has the advantages of human capital and ingenuity from all around the world. It’s a perfect fit.”
The moment a deal normalising ties between the UAE and Israel was announced, the head of a Tel Aviv technology organisation received dozens of LinkedIn invitations from several UAE nationals.
A month on from the August diplomatic breakthrough, Eugene Kandel, CEO of Start-Up Nation Central, was already in Dubai selling Israeli technology. Kandel’s organisation works to “build bridges” between Israeli technology companies and governments, businesses and organisations.
The launching of public business ties “can provide a lot of opportunities for many Israelis”, Kandel told AFP.
Since the landmark Israel-UAE deal was announced on August 13, the average number of Emirai users on the Start-Up Nation Central platform has increased by 122 per cent.The amount of time they have spent looking at Israeli start-ups on the website has jumped by 600 per cent, according to the organisation, which did not provide user numbers.
Investment in Israel’s start-up sector grew by 33 per cent to $4.6 billion (Dh16.8 billion) in the first half of this year, according to an internal study. With doors now opening to the Gulf, Kandel said Israel must now tap into that unrealised potential.
Israeli entrepreneur Erel Margalit, who heads investment firm JVP Margalit, is planning to send a delegation to the UAE in coming weeks.
“We want to invest in young, dynamic, smart Arab entrepreneurs,” said Margalit, whose company specialises in cybersecurity, artificial intelligence and financial technology.
The entrepreneur said he sees the Emirates as a country of tech innovators, rather than just customers. His goal is to open a start-up incubator in Dubai.“It’s our goal, it’s our dream,” Margalit said. “It would serve as a gateway to the whole region.”
— With input from AFP