Dubai’s Startup Push Finds Strong Ally in Indian Founders

Dubai is rapidly establishing itself as a promising startup hub. While it still trails established ecosystems like the US, China, and India in terms of number of startups, the city’s pro-business laws and investor-friendly policies are attracting a growing number of founders, including from India, to set up base in Dubai.

“We are seeing a lot of startups expanding their operations to the Middle East with the help of DIFC (Dubai International Financial Centre). Our offerings are really attractive,” said Mohammad Alblooshi, CEO of the DIFC Innovation Hub at a recent media roundtable.

Launched in 2021, the DIFC Innovation Hub serves as a regional innovation community hosting more than 1,240 entities, including growth stage startups, digital labs, VC firms, regulators, and academic institutions. The hub also connects early stage founders with investors, boasting over 300 investors on its platform, according to Alblooshi.

Operating under the DIFC, a financial free zone with an independent legal framework based on English common law, the Innovation Hub offers low taxation and subsidised licensing, making it an attractive base for new ventures.

Speaking to Inc42, Sherif Rahman, partner at Dubai-based legal firm Al Tamimi & Co, said that the firm has been seeing a growing interest from founders in India for shifting their base to Dubai due to lower taxation and easy access to capital.

Notably, the Dubai Future District Fund (DFDF), anchored by DIFC to invest in startups in Dubai, was launched in 2021. The fund with a corpus of over 1 Bn AED ($272 Mn) has directly invested in 16 startups while also infusing capital in startups through VCs across the world. 

Dubai is also benefiting from its clear regulatory framework around emerging sectors like AI, fintech and virtual assets such as cryptocurrencies, supported by dedicated bodies like Virtual Assets Regulatory Authority (VARA) and Dubai Financial Services Authority (DFSA). This minimises uncertainty with regards to regulations.

“With India and other global markets, we’ve seen many founders consult mentors or peers on our platform to understand the local ecosystem before setting up operations here,” Alblooshi added.

For Camb.ai, which was incubated at the DIFC Innovation Hub, mentorship has been crucial. “We started our operations in Dubai because it has a great ecosystem, market access across the world, and ability to attract talent,” said Avneesh Prakash, CEO of Camb.ai. Prior to founding Camb.ai, Prakash was working with Tata Communications.

Dr. Marwan AI Zarouni, AI CEO at the Dubai Economic and Tourism Department, claimed that the success rate of startups in Dubai is notably higher than the global average. “Typically, nine out of 10 startups fail, but here the success rate is much stronger due to access to funding, education, and a collaborative founder community,” he said. 

Citing Polygon’s relocation to Dubai as an example, AI Zarouni said, “The government went above and beyond to support them, and now they’ve even launched their own accelerator.” 

Sandeep Nailwal, Jaynti D Kanani and Anurag Arjun cofounded Polygon in 2017 in India, and later moved its operations to Dubai in 2020.