Tech and digital linked entities could be the next big entrants into the UAE stock markets. Abu Dhabi-based startup investor iMENA is thinking of one. Image Credit: Gulf News Archive

Dubai: The UAE’s technology sector could finally get a presence on the local stock market, with the tech investment firm iMENA looking at a potential IPO and listing on ADX early 2023. iMENA has built a portfolio of investments in online entities such as, (into online classified), Telr (payment gateway) and ReserveOut (for F&B booking).

“iMENA’s model as a permanent capital platform - not a VC or PE investor - means that we already have a number of businesses in which we are long-term investors and partners,” said Khaldoon Tabaza, founder. “(And) helping them benefit from this explosive growth and value creation opportunity.

“We are on the cusp of a digital revolution as the region – the digital economy here is expected to be worth around $269 billion in the next five years as we see an acceleration of tech adoption. We believe that as an internet growth proxy for investors, we would represent an attractive investment proposition were we to pursue an IPO.”

iMENA, founded in 2013, has its headquarters in Abu Dhabi. Some of its investments such as have built the required visibility in the UAE and has taken its business model into other regional markets too. Telr is another that has made headway.

ADX and DFM are weighed heavily in favour banking, insurance, utility and energy sectors, with e& and du being the options investors have to access returns via the wider technology and telecom spaces. There had been talk about data centre operators – one of the biggest growth categories within the UAE’s tech space – might consider going public, or even a listing in the ‘second market’.

Stock - Khaldoon Tabaza, founder of iMENA
Khaldoon Tabaza, founder of iMENA, "We are seeing attractive new opportunities come to the market at more sensible valuations, and while it’s true we have been seeing record numbers of startups and startup deals in the past 12-18 months, we believe there is tremendous potential..." Image Credit: Supplied

Saudi Tadawul listings

Saudi Arabia already has made headway in getting pure-tech entities to list, ‘with the likes of Jahez International (food delivery) and Elm (into information security)’. “I am sure we will see other tech companies across the region recognize the benefits of listing and investors seek to access such a huge growth opportunity,” said Tabaza.

In the recent past, Arabic music streaming portal Anghami and Swvl, which is about ride-hailing on public transport services, have gone in for Nasdaq New York listings.

“There are very few online businesses in MENA that have the size and underlying economics that would make them IPO candidates,” the iMENA founder said. “In almost all other emerging markets, the first groups to go public were platform companies that offered exposure to investors across different business models and geographies. And were able to reach the size and maturity that makes them public market candidates.

“We are starting to see the benefits of governments’ efforts to strengthen local capital markets, and this is flowing through into tech companies. We have seen this in Saudi Arabia.”

A quiet moment for Big Tech?

But any prospects of a steady stream of tech-related IPOs in the UAE/Saudi Arabia would need to look at what’s happening in the US, specifically with Big Tech. The latest quarterly results season is on, and more disappointing news from the likes of Apple, Meta (formerly Facebook), Google and others could dim the appetite among investors. That might well extend to investors here too.

According to Tabaza, a lot would depend on the business models. “We are excited by the opportunities available to us – both working to develop our platform companies to unlock their full potential and identifying further investment opportunities where we can add significant value. To do this, we continue to explore the best way to fund our continued growth, including a potential IPO.”

Our model protects us since the focus is less about the speed of valuation gains and more about ensuring that our platform companies are scaling effectively and at the right pace

- Khaldoon Tabaza of iMENA