The Dubai government announced it has launched a AED370-million ($100.7m) fund to accelerate growth capital for startups with the aim to fortify the city’s position “as a global hub for financial technology, innovation and venture capital”.

The fund, which will come into effect in June, will provide capital to finance small to medium startup projects, supporting their development in Dubai, and helping them gradually expand to other markets, added the announcement on Wednesday.

Pakistan can benefit from Dubai’s ‘structured’ approach to boosting startups

Managed and supervised by the Dubai International Financial Centre (DIFC), which is also a 15% contributor to the fund, the government said the fund is set to contribute around AED3 billion to the emirate’s GDP during the implementation period, which will run for eight years, and is extendable for two additional years. It will also create more than 8,000 jobs for emerging talents.

In wooing entrepreneurs, Dubai has Pakistan startups on its radar

His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai approved the launch of the fund.

He said the fund was “to spearhead economic diversification and ignite sustainable economic growth. We are committed to create a vibrant business environment and provide the opportunities to promote excellence.”

He added that "with an agile legislative system, robust financing tools, an effective regulatory environment, and most importantly, dynamic public and private sectors, Dubai has established itself as the city of entrepreneurs and risk-tolerant investors.”

The fund will add to Dubai’s already thriving startup scene, which is a result of its attractive tax regime and economic free zones. Many startups, including Swvl and Careem, have their headquarters in Dubai.

Earlier, Dubai Chambers President and CEO H.E. Hamad Buamim told Business Recorder that businesses looking for funding in Dubai have plenty of options at their disposal, ranging from traditional banks and venture capital firms, to business incubators, accelerators, government programmes, crowd funding and angel investors.

Digital economy sectors such as edu-tech, health-tech, fintech and artificial intelligence continue to see growth as Dubai attracts innovative startups from around the world that are leveraging the emirate’s competitive advantages, he said.

Setting up a business headquarters in Dubai: what you need to know