2025 is anticipate to be a transition year for startup funding in the UAE, but the expected investment is expected to be above the projected $2bn of 2024. This impressive growth is due to increasing investor confidence, regional economic stability as well as a growing innovative environment in the region.
AI, fintech, climate, technology, and everything related to health technologies are expected to remain the most funded industries, with generative AI attracting more attention from investors because of its potential to substantially alter industries. Sources also expect that revenue-based financing and venture debt are some of the financing methods that will push through and provide startup organizations the window of opportunity for growth.
Speaking to iAccel Gulf Business Incubator CEO and co-founder, Deepak Ahuja, the country positioned itself as the best place for startups among the developed countries. “Based on this assessment, what do you think 2025 will look like by assessing the ecosystem?” Ahuja asked “There will be more emphasis on the impact of investments including climate and inclusive startups,” I responded. He mentioned that players with very favorable unit economics and who are solving important problems will be recognized in the new economy.
The UAE has favorable policies for investors, sound infrastructure, and favorable geographical location for startups across over 70 nationalities, especially those who want to expand operations in the MENA and further afield. Leading market voices believe that the trend in high impact industries such as AI, sustainability and fintech will continue, which is in line with the vision of the nation for transforming into an innovation economy and rebalancing the economy.
Due to unprecedented regulatory changes and government support, players including iAccel GBI are actively supporting growth by linking up the startups with angels, VCs, and HNWIs.
“2025 will new map of startups, UAE goes global, IPOs success, and scalable competitive technologies enter,” Ahuja said. The year is set to open the doors for startups to employ the UAE as a platform to become drivers of worldwide innovation.
