Egypt has been losing its Arab leadership politically, and I can say it is also coming to tech.
Gulf led by Saudi Arabia and UAE understands that oil is running out, and the world won’t be as dependent on it as before. So they started finding new ways to secure their future.
Luckily, we are witnessing the second industrial revolution, this time it is happening in tech. So Saudi and UAE decided to double down on tech investments, and the first macro and micro trends started to show up.
Saudi’s Public Investment Fund (PIF) the country’s main sovereign wealth fund invested $3.5 billion in Uber earlier this year.
It also announced a new 100 billion – with a b – dollars fund with Japan’s softbank to invest in tech startups.
Then UAE announced it will be the first place in the world to build Hyperloop to connect Dubai to Abu Dhabi. Hyperloop is a new technology that enables the transportation of humans and goods at 1200km/h without flying. The original paper of the technology was published by Elon Musk. The company that will build the Hyperloop in UAE is Hyperloop One, a company founded by ex-SpaceX employees and one of silicon valley’s top investors.
Earlier this week, Emaar’s Chariman (The company behind Burj Khalifa) announced that he is building a new ecommerce startup with $1 billion investment, half of it coming from Saudi’s PIF, the other half comes from him and other Emarati investors. The new venture will be headquartered in Riyadh.
Yesterday, Saudi announced another 200 million Saudi Riyal VC fund to support local tech startups. It is still unclear how the fund will be deployed and managed.
I think you only need two kinds of people to create a technology hub: rich people and nerds – Paul Graham, founder of Y Combinator
Gulf has rich people, it lacks nerds. Egypt has higher ratio and number of nerds than Gulf.
To attract these nerds, most of whom already left Egypt to chase better opportunities in Europe and US, these gulf companies are paying hefty sums to attract them to go and work there.
Careem, Uber’s middle east competitor is paying unmatchable salaries for engineers to join its Dubai office, they are even opening an office in Berlin to attract Arab engineers who don’t want to leave Germany. They are paying higher than most of Germany based companies.
These new ventures need engineers, and with such levels of funding they will do whatever to get them on board.
I do believe this snowball will keep getting bigger, funding will increase in the Arab world, with competition between different Gulf states to attract tech talent.
There could be a bubble, mostly because these companies are not started by nerds but rather by rich people who think if they put enough money into it, it should work. Which is also another reason why we will see most of these companies as localized copycats to successful global ones, mostly in ecommerce, logistics, and payments since these have the easiest to understand business models.
Overall I think this is mostly good, because if things are changing it means there is a chance for someone to create something really innovative on a global scale. Even if most of the current experiments fail the knowledge will be passed to other people and everyone will learn from their mistakes.
I lost hope in Egypt becoming a good tech hub during my lifetime long ago, but these are other signs to confirm that.
I hope I am wrong.