Ammar Al Malik is the managing director of Dubai Internet City

The boom in tech firms either floating on stock markets or achieving unicorn status is extraordinary. Despite the global economic pressures caused by the Covid-19 pandemic, last year was one of America’s best on record for initial public offerings. This should give regional startups optimism and confidence because the message is clear: with increased competition fuelling innovation, more companies are going public or raising funds to accelerate growth and deliver value for investors and customers.

Last year exposed the fragility of global markets, but the rise of tech unicorns, hitherto a statistical rarity, continued unabated. While there are sectors that will see long-term damage, tech companies with promising solutions are entering an era of opportunity that could chart a path for economic expansion.

Just look at Telegram. The encrypted messaging app headquartered in Dubai Internet City raised $1 billion through bond sales to investors last month. Its founder also met His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum recently, highlighting the importance of the emirate’s entrepreneurial ecosystem to the UAE’s leaders. Dubai-based Telegram is valued at over $20 billion and its success underscores the acceleration of tech-based innovation.

The combined value of the world’s 326 unicorn companies (firms with a valuation of over $1 billion) is estimated to be approximately $1.1 trillion, according to the World Economic Forum. This represents the immense value and potential when you fuse innovative ideas with scalable technology, digital talent and capital.

Another aspect to consider is the pace of mergers, acquisitions, and initial public offerings in the tech space, driven largely by the US, which is home to nearly half of the world’s unicorns. PwC data shows that Q3 2020 was a record-breaking period for IPOs, raising $58.1 billion from 152 companies – one of the highest figures since 2016. Not only that, but the average IPO last year returned 46 per cent of the stock value to the business, which is more than double the amount returned during the same quarter a year earlier. There has also been immense interest and growth in special-purpose acquisition companies (SPACs), which have been around for decades, but really took world by storm recently. Dubai Internet City and in5 veterans Anghami are among those to have used SPACs to raise capital recently.

With this in mind I believe 2021 will be pivotal for UAE startups: as the ecosystem matures and companies reap the benefits of business-friendly policies, entrepreneurs will continue to attract capital for everything from last-mile logistics and fintech to education and e-commerce. More than $396 million was raised in the first quarter 2021 by startups in the Middle East and North Africa last year, and the UAE remained the strongest market by some distance.

The UAE is also home to several unicorns, and some started in Dubai Internet City. In September 2020, voice-centric social platform Yalla Group became the first Dubai-based tech unicorn to list on the New York Stock Exchange and became the latest homegrown company to achieve unicorn status. The parent companies of Bayut and dubizzle - Emerging Markets Property Group and OLX Group – also merged last year to create a $1 billion property listings empire that can trace its roots to Dubai.

These are hardly isolated cases and represent a growing cohort of homegrown companies that have  achieved unicorn status. They follow in the path of companies such as Careem, which was acquired by Uber for $3.1 billion and became the first-ever unicorn created in Dubai Internet City. Other homegrown success stories such as Souq, Maktoob, Property Finder and Media.Net also started here and completed large investment deals.

Tech has proven to be a sound investment. In the Middle East, the number of digital- companies going public or reaching unicorn status underscores three points: the strength and viability of technology-driven firms; the resilience of the region’s startup ecosystem; and the presence of opportunity.

This will create more value and encourage innovation. As companies continue to see the importance of big data, artificial intelligence, machine learning and automation, digital talent is critical to all sectors – from farming and finance to education, healthcare and logistics. The UAE’s directive to create a pathway to citizenship for highly-skilled professionals and offer long-term visas to artificial intelligence and big data degree holders will certainly help. Last year’s launch of the Nasdaq Dubai Growth Market will also encourage entrepreneurs that Dubai is the best place to scale up.  What this means is that we expect to see more tech unicorns made with greater speed.

As the vaccine-driven global recovery continues, we are seeing a shimmer of light at the end of the tunnel. Recent months may have impacted the path to prosperity, but the success of local tech companies floating on stock markets or archiving billion-dollar status has made a route for others to follow. We expect to be home to at least 10 tech unicorns within the next decade. They may have been a statistical anomaly when Aileen Lee coined the phrase back in 2013, but unicorns are becoming less mythical and more meteoric every year.