Funding for startups at TECOM Group’s in5 surges by 25% in 2023

TECOM Group’s in5 reported a 25 per cent increase in total funding raised by startups within its ecosystem, despite a plunge in venture capital activity in the MENA region due to high inflation, rapidly increasing interest rates and volatility in the public equity markets.

The surge in funding, which reached Dhs3bn in 2023, is indicative of growing interest in Dubai’s homegrown enterprises, catalysed by government strategies to enhance the city’s position as a global innovation hub.

“There is global stakeholder acknowledgement about the innovation, resilience, and creativity with which startups can disrupt and redefine the future economy, and in5’s recent track record reaffirms its vision to mitigate roadblocks for the world’s most enterprising futurists,” said Majed Al Suwaidi, senior vice president at TECOM Group.

“As an essential pillar of entrepreneurship in the region, in5 will continue to nurture our cohort of entrepreneurs and strengthen the pathways towards fulfilling the goals of the Dubai Economic Agenda ‘D33’.”

in5 returns to @stepconference with its most innovative start-ups and partners from @TECOMGroupDubai’s ecosystem after a 25% funding boost in 2023. Come say hi to in5’s brightest minds at #Step2024 and learn more about the Innovate for Tomorrow challenge! pic.twitter.com/0bkuK01drV

— in5 Dubai (@in5dubai) February 22, 2024

in5 has incubated as many as 900 startups since its inception, and its tech-focused vertical registered a 13 per cent annual increase in the number of active startups to 270 in 2023.

The incubator seeks to nurture a vibrant entrepreneurial ecosystem that supports the future development of the local, regional, and global economy through four dedicated verticals for the technology, media, design, and science sectors.

It is also hosting startups from Luxembourg and Poland following Dubai Internet City’s recent MoUs with the Luxembourg Trade and Investment Office and Polish Investment and Trade Agency.

in5 bucks the global trend

Despite a 25 per cent increase in funding raised by startups in the in5 ecosystem, venture funding across the MENA region plunged by almost a quarter to $2.6bn in 2023, according to Dubai-based data platform MAGNiTT.

“Interest rate hikes have proven to be challenging for the venture capital landscape globally and the MENA region has not been immune to this. As we enter 2024, investors are cautiously optimistic, showing renewed interest in technology and venture opportunities,” said Philip Bahoshy, CEO of MAGNiTT.

The latest data from MAGNiTT shows that several local and foreign investors retreated from the region last year, with only 366 investors backing MENA startups, down 30 per cent than in 2022.

Despite initial interest from Silicon Valley and global investors in the region, MAGNiTT said that only 45 per cent of investors came from outside MENA.

The UAE maintained its lead over deal flow, boasting the highest number of transactions in the region despite a 9 per cent year-on-year (YoY) decline, driven by an increase in the number of serial entrepreneurs and early-stage companies using the country as a regional launchpad.

Meanwhile, investment in Saudi startups surged by 33 per cent YoY to $1.4bn in 2023, constituting just over half of all venture capital funding raised in the Middle East and North Africa.

Read: Saudi Arabia secures $1.4bn in 2023, leads MENA VC fundraising