Dubai Freezone Cements Position as Leading Regional Fintech Hub20. July 2022
The Dubai International Financial Centre (DIFC), the city’s financial freezone, is aggressively cementing its position as the top fintech hub in the Middle East, Africa and South Asia (MEASA), unveiling a number of initiatives this year aimed at fostering innovation, attracting foreign fintech startups and nurturing talent.
At the DIFC Fintech Week on June 28 and 29, government officials and industry participants reaffirmed the freezone’s status as the region’s fintech powerhouse.
DIFC’s new fintech initiatives
Highlighting the sector’s growth, Essa Kazim, governor of DIFC, told Euronews at the event that fintech is now the fastest growing sector for DIFC, contributing more than 35% to the total number of companies that have been established over the last 12 months.
Part of that success can be attributed to the hub’s role in supporting fintech companies from incubation and acceleration, to investment stages, Kazim said, a strategy which was materialized in April 2022 by the announcement of so-called venture studios across the freezone.
These venture studios are tasked with building and investing in startups, and will provide promising young ventures with legal and regulatory support, access to talent and shared services such as marketing, branding, design and engineering. The financial center aims for more than 20 studios to be set up over the next five years. These are expected to launch over 200 new ventures.
2022 also saw DIFC emphasize its commitment to open banking, launching in June the Open Finance Lab, a six-month program which will see banks and fintech companies collaborate on use cases. In addition, the lab will also run business and technical deep-dive workshops, and facilitate industry and regulatory forums on important issues including API standards, consumer consent management, and education, DIFC said.
The launch of the Open Finance Lab followed the licensing of Tarabut Gateway by the Dubai Financial Services Authority (DFSA), the independent regulator of financial services in DIFC.
With the license, Tarabut Gateway became the first open banking platform in the UAE to be regulated, marking a major milestone for the country’s open banking space.
The gateway to MEASA
Further showcasing its ambition to becoming a launchpad for fintech companies looking to take on the MEASA region, DIFC unveiled this year a number of collaborations aimed at bridging fintech ecosystems.
In particular, the financial center inked a partnership with FICCI Lead, a technology and business incubator of the Federation of Indian Chambers of Commerce and Industry (FICCI), in May to launch the so-called India-UAE Startup Corridor.
The initiative aims to enhance and expand the startup ecosystem between India and the United Arab Emirates (UAE), exchange best practices and facilitate each of these locations’ startups expansion plans. It will target a minimum of 50 validated startups based in India and the UAE over a period of five years with the vision to grow 10 of them into unicorns by 2025.
Another bilateral collaboration announced this year was the tie between DIFC and the Bank of Mauritius. The partnership, announced in February, seeks to facilitate the exchange of information between the two entities, and strengthen collaboration in the field of research pertaining to financial services, banking, cybersecurity and fintech, among others.
Fintech developments in Dubai
DIFC’s efforts to put the city on the global fintech map have led the emergence of a thriving fintech ecosystem which continues to grow, mature and attract investors’ interest this year.
Dubai-based digital banking platform YAP closed a massive US$41 million pre-Series A funding round in July, which co-founder and CEO Marwan Hachem said it will use to expand into Saudi Arabia, Pakistan, and Egypt as it is now piloting in Ghana.
Qashio is another local startup that raised funding this year, closing a US$2.5 million pre-seed round in February to launch what it claims is the UAE’s first corporate card and expense management platform.
Careem, which started out as a ride-sharing app in Dubai back in 2012, has evolved into a full-fledged platform and super app that’s now aggressively expanding its reach in the fintech sector. After introducing a digital wallet for its Careem Pay service in April, the company acquired money transfer platform Denarii this month to enter the remittance business.
Careem was acquired by Uber for US$3 billion in 2020, and offers customers in Dubai an array of services ranging from ride-hailing and micro-mobility, to food and grocery delivery, and payments.
Featured image credit: Invest in Dubai
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