- Israeli entrepreneur and Waze co-founder Uri Levine told CNBC the region’s next unicorn is likely to come out of the United Arab Emirates.
- Waze, a traffic and navigation app, was acquired by Google in June 2013 for more than $1.1 billion.
- Levine is visiting Dubai for the first time as leaders in Israeli technology, business and government look for reciprocal growth opportunities following the deal to normalize ties.
The next billion dollar business in the Middle East will emerge from the United Arab Emirates, according to one of the region’s most prominent entrepreneurs.
“It’s very likely,” Uri Levine, the Israeli entrepreneur best known for co-founding traffic and navigation app Waze, told CNBC in an exclusive interview on Wednesday.
Waze was bought by Google in June 2013 for more than $1.1 billion. Israeli press estimated that Levine owned 3% of the company, netting him $38 million from the sale. Levine now spends his time as a start-up mentor and investor.
“Logistics and transportation and tourism are very significant here,” Levine said. “I think that you look at the city of Dubai, and you realize that there are a lot of things in mobility that can be built according to what we have built here,” he added.
The bullish call on the Emirates tech ecosystems comes as the UAE and Israel deepen ties following September’s signing of the Abraham Accords, an agreement that normalized diplomatic relations between Israel, the UAE, Bahrain and eventually Sudan. The agreement has sparked a rush for new business, agreements to develop market access and deals to advance knowledge sharing between the two financial and technology hubs.
“If Israel is a start-up nation, we are a scale-up nation,” Omar al Olama, the UAE Minister for Artificial Intelligence, told CNBC on Monday. “There are things that will start up in the UAE that will leverage off Israeli technology, Israeli companies and Israeli individuals to really become global in nature,” he said. “If they become unicorns or billion dollar agreements, that’s what we want.”
It’s thought the closer collaboration could help regional start-ups tackle challenges such as revenue generation, fundraising and overcoming regulatory hurdles.
“I am bullish about the potential for cross-border idea generation, investment, and teams working together,” Angus Blair, Professor, Business School at the American University in Cairo told CNBC on Wednesday. “There are many relatively recent changes in Dubai and Abu Dhabi in the infrastructure to help start-ups, helped by the already large financial services sector in the UAE,” Blair added.
The UAE is home to around 2,300 start-ups, while Israel claims over 6,000.
The Emirates ranked first in the region by number of deals (with 26% of all deals), as well as by the amount of capital invested, according to MENA startup data platform MAGNiTT.
“The UAE earlier this year decided to offer visas to the founders of start-ups. This move, combined with the ease of doing business and quality of life factors in the UAE, is a potentially very strong magnet to attract further talent from across the region into Dubai and Abu Dhabi,” Blair told CNBC.
Middle East shows promise with second unicorn
The Middle East and North Africa region is growing in digital connectivity. Research from Cisco shows the region will have 549 million internet users over the next five years, as governments tap into youthful populations and invest in infrastructure and technology to diversify economies away from oil as a traditional primary driver of growth.
Despite the hit from the coronavirus pandemic and lower oil prices, the region’s ecosystem has remained resilient. A total of 251 start-up investment deals were recorded in the first half of the year across the MENA region, despite the downturn, and that trend has only continued.
Last month, Western Union, the world’s largest money transfer firm, acquired a 15% stake in Saudi Arabia’s STC Pay for $200 million. The deal valued the payments business at around $1.3 billion, creating the Kingdom’s first unicorn and the region’s first fintech unicorn.
Uber purchased regional ride hailing app Careem, the region’s very first unicorn, for $3.1 billion last year.