“We have succeeded in making Dubai one of the most important cities in the world from scratch in a period of 30 years, whereas others have reached their current position in at least 100 years. Now we want to further consolidate and advance this position by using proptech.” These words, which one of the public administrators said at a conference I attended, describe the vision of the
“Vision” could easily be one of the most important keywords reflecting the character of the United Arab Emirates and its market. Especially with its cities such as Dubai and Abu Dhabi, UAE has become the financial, social, and economic center of attraction in the MENA, a region home to over 400 million people. The United Arab Emirates is the first country in the region to move away from the oil-based economic development model and turn to tourism, retail, construction, real estate, and high value-added areas such as aviation, space, environment and
technology. The government, being aware of the fact that entrepreneurship, creativity and innovation will play an important role in its journey of increasing diversity in the economy, organizes dozens of programs, acceleration and incubation centers to attract top talents and companies on a global scale. (DIFC, Dubai Future Foundation, District 2020) Dubai and Abu Dhabi, cities with the most advanced entrepreneurship ecosystem are also home to many VCs, family offices or PE firms.
The proptech market in the UAE consists of construction and real estate to a large extent and technology to a small extent 🙂 However, that is changing fast. In the last 20–30 years, investments in both infrastructure and superstructure have made the construction industry the dynamo of the country. Even after the 2018 global crisis and the aftermath of the Covid 19 pandemic, the total value of the construction market in the country is estimated to reach USD 101.45 billion in 2020 and USD 133.53 billion in 2026*. Similarly, the number of real estate transactions realized in Dubai in 2021 increased by 65% compared to the previous year and reached 84,772, while the total value increased by 71% to Dhs300 billion (USD 81 billion)**.
The 2nd version of the UAE Proptech Map that we have released last week includes 80+ companies – a big jump compared to the first version-. As in most markets, real estate marketplaces are the first wave of companies in the sector. Apart from Propertyfinder, which is the category leader, there is also Houza, an agent-operated marketplace like we see in other markets too. Tenderd is another marketplace that focuses on asset optimization of equipment used in the construction industry.
Reidin is one of the first data companies focused on real estate not only in the UAE but among all developing countries. In addition, startups such as Protenders and Procurified, which digitize the procurement processes of construction companies, and Dupod, which offers innovative products in the rapidly developing modular construction category are other companies on the map.
Thanks to the pandemic, logistics is one of the fastest-growing verticals in the UAE market, -as in every other market-. The number of companies that offer flexible and multiple working environments with different business models such as Letswork, Aceplace, and Hotdesk is increasing too.
When there has been a record number of constructions and real estate transactions in any market for years, it’s expected there are many initiatives focusing on every step of the chain including viewing, inspecting, closing, managing. Nomad Homes is one of the companies that started in the UAE and later expanded to different geographies (just like the new generation mortgage
Startups such as Kennedy Towers, Stella Stays, Air Dxb and HiGuests are all active with different business models in the short/mid-term rental vertical.
Almost every proptech market in the world has at least one tenant app. The UAE market is no different from others. Along with Happy Tenant and Tenex, a private social network for neighborhoods, Hayi, are all active in the market. Its cosmopolitan structure and highly developed service industry helped this market to form a cloud kitchen cluster -earlier than the rest of the world. A lot of companies with different business models are scaling their business within the country and in the region. Kitopi is a good example of this.
It is pleasing to see that the market, albeit late and slowly, is getting hotter every day. The incumbents finally step in and take real actions. Some choose to be an LP in global VCs, some are developing accelerator programs, a few are making direct investments. We believe 2022 is going to be the turning point for the UAE proptech market. Onwards and upwards!
** Dubai Land Department