Abu Dhabi Recognized as Fastest-Growing Emerging Startup Ecosystem in MENA Region

Photo : Abu Dhabi Media Office

Abu Dhabi has been recognized as the fastest-growing emerging ecosystem in the Middle East and North Africa (MENA) region, marking a notable 28 percent growth in ecosystem value according to the 2024 Global Startup Ecosystem Report (GSER) by Startup Genome and the Global Entrepreneurship Network. This announcement was made during London Tech Week, shedding light on Abu Dhabi's significant strides in the entrepreneurial landscape.

The GSER, renowned for its rigorous and quality-controlled dataset on startup ecosystems, analyzes data from over 4.5 million companies across more than 300 innovation ecosystems globally. This comprehensive analysis provides valuable insights into global startup trends and ranks the Top 40 global ecosystems, along with emerging ecosystems and detailed regional rankings.

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A key highlight of the report is Abu Dhabi’s impressive performance, driven by the thriving startup activity at Hub71, the city’s global technology ecosystem. The GSER 2024 reveals that Abu Dhabi not only maintains its position as the fastest-growing emerging ecosystem in the MENA region but also created a substantial $4.2 billion in Ecosystem Value between July 1, 2021, and December 31, 2023. This reflects a 28 percent compound annual growth rate compared to the previous period from July 1, 2019, to December 31, 2021. Ecosystem Value, a critical measure of economic impact, encompasses the value of exits and startup valuations.

Abu Dhabi's ecosystem ranking surged 15 spots from the previous year, placing it in the 61-70 group. The city also saw a significant boost in early-stage funding, totaling $284 million between July 1, 2021, and December 31, 2023. Additionally, the total venture capital funding for the period from 2019 to 2023 reached $1.06 billion.

The report also highlights several key rankings for Abu Dhabi within the MENA region. The city is ranked second in Performance, which assesses the size and success of an ecosystem based on the accumulated tech startup value from exits and funding. Furthermore, Abu Dhabi ranks fifth in Funding, which evaluates innovation through early-stage funding and investor activity, and fifth in Talent & Experience, which measures long-term trends and key performance factors.

Moreover, Abu Dhabi secured a spot in the Top 10 MENA Ecosystem in Knowledge, reflecting its innovation through research and patent activity. It also placed within the Top 15 in Bang for Buck, which gauges the average runway tech startups gain from a venture capital round, and within the Top 15 in Affordable Talent, indicating the ease of hiring tech talent. The report also spotlighted Abu Dhabi’s strengths in the FinTech, AgTech and New Food, and ClimateTech sectors, highlighting the density of talent, support resources, and startup activity. The emirate’s strategic advantages, such as the Golden Visa and its favorable location, were also cited as compelling reasons for startups to relocate to the ecosystem.

Ahmad Ali Alwan, CEO of Hub71, emphasized Abu Dhabi’s rise as a premier startup ecosystem in the region, attributing it to the myriad opportunities it offers entrepreneurs worldwide. He noted that the favorable environment in Abu Dhabi not only facilitates funding and commercial prospects but also provides a solid foundation for startups to scale. Hub71, in particular, has witnessed substantial growth in its startup community over the past five years, reinforcing Abu Dhabi as a launchpad for global expansion. Alwan pointed out that the Startup Genome report underscores Hub71’s role in realizing the vision of the leadership to maximize the potential of disruptive ventures that are making a significant societal impact.

The report underscores the contributions of key ecosystem players in Abu Dhabi, including the Abu Dhabi Global Market (ADGM), Mubadala Investment Company, ADQ, the Abu Dhabi Investment Office (ADIO), startAD, and the Abu Dhabi Department of Economic Development (ADDED). These entities have been instrumental in creating a favorable operating and regulatory environment, offering unique incentives such as 100 percent foreign ownership to attract foreign investment and startups. Through strategic collaborations, Abu Dhabi is facilitating the seamless integration of startups from around the world, providing access to capital and commercial opportunities. This has led to numerous companies relocating their global headquarters to ADGM, including US-based digital asset security firm Andalusia Labs and South Korean blockchain company Neoply. Hub71 now hosts a thriving community of more than 315 startups, collectively raising $1.5 billion.

Marc Penzel, Founder and President of Startup Genome, praised the exceptional efforts of Hub71 in fostering a world-class startup ecosystem in Abu Dhabi at a remarkable pace. He highlighted the city’s appeal to entrepreneurs with global ambitions, especially in fast-growing sectors such as digital assets and CleanTech.

The GSER, developed by a consortium of representatives from over 40 countries, provides an in-depth analysis of current startup activities and related investments. It offers valuable insights and guidance to public and private leaders on fostering vibrant startup communities, which are pivotal for job creation and economic growth. Contributions from expert thought leaders and local key players enrich the report’s extensive, evidence-based findings, derived from over a decade of Startup Genome’s independent research and policy work.

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