Issue 106: Tech Funding is Heating Up
Welcome to Backstory, a weekly newsletter turning global technology shifts into a three-minute read. This week, we’re thinking about venture capital – Mary Ames, Director of Strategy
THE BIG TAKE
Tech Funding is Heating Up
Just like that summer is coming to a close. With the economy heating up and Fall deals taking shape in the technology sector, it’s a great time to have a look at venture capital funding in the region. New data suggests that UAE-based technology companies have taken the lead in funding in the first half of 2022. Local companies raised more than $699m according to a report by Magnitt. In 2021, the UAE attracted more than $1.47bn in venture capital.
Follow the money: For decades, the UAE has invested substantial government resources into building a thriving knowledge economy. The venture capital inflows show that these investments are paying off. Given their location, access to talent, and the local infrastructure, UAE technology companies are now the most attractive in the region. As the country continues to grow in technology with critical changes to its regulatory framework, new sectors like crypto and blockchain will attract more capital inflows.
Crypto set to grow: Some exciting announcements regarding cryptocurrency are bound to spike additional investment this Fall. According to The National, Kraken, one of the world’s largest cryptocurrency exchanges, has teamed up with National Bank of Ras Al Khaimah to offer investors the ability to trade virtual assets in dirhams through their local bank accounts. Dubai also granted a provisional virtual asset license to Singapore's Fintonia Group that will facilitate the expansion of the crypto sector. While these items might seem small by themselves, taken together they reveal a local crypto market maturing at a rapid pace. Coupled with the foreign investment news, the future is a bright one for the local technology community.
QUOTE OF THE WEEK
“When we strive to become better than we are, everything around us becomes better too.”
– Paolo Coelho, writer
CHART OF THE WEEK
Welcome to our new chart of the week section!
In our world awash with data, charts are a great way of cutting through the noise. We will start with one or two charts focused on technology and other sectors in the Middle East. This week, we are looking at Middle Eastern venture capital funding in the first half of 2022. The numbers don’t lie.
OUR VIEWS THIS WEEK
Creating the internet: For most of their existence, social media companies have tried their best to stay away from content moderation. Leading platforms such as Facebook and Twitter have repeatedly argued that they can’t be the arbiters of truth or the editors of perceptions. In light of the recent revelations about Twitter’s handling of user data, we are highlighting this piece from the archives published by Xische where we explore how content moderation is a perfect opportunity for small states like the UAE to help define the internet we want.
Rethinking citizenship: Could digital citizenship unlock a new knowledge economy? In this piece from the archive, we travel to Estonia to take the temperature of its innovative e-residency program. The small Baltic nation launched the world’s first e-Residency program in 2014 with the goal of 10 million e-residents by 2025. The trend is clear: we have a lot to learn from the Estonians.
SPOTTED ELSEWHERE
A new day for Substack? The email newsletter business is entering a new phase. After a rocky start to the year, the startup newsletter company Substack appears to have a new direction that is driving bigger changes across the sector. Leading technology newsletters such as Azeem Azhar’s Exponential View have announced that they are rejoining the platform because of new features Substack engineers have recently introduced. Backstory has been thinking about its own shift from Mailchimp to Substack along with some other exciting announcements (stay tuned). One thing is clear, the newsletter business is entering a new stage of maturity and that’s exciting for all of us.
This 30-year-old is spending $1bn to save crypto. If there is one name that you need to know in crypto, it’s Sam Bankman-Fried. The founder and chief executive of the leading cryptocurrency exchange FTX, Bankman-Fried is essentially holding up the sector by himself during the current downturn in market conditions. The Wall Street Journal has just published an insightful profile of the pioneer that speaks volumes about the underlying trends shaping the next steps in the sector.
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