As the push to recruit top fintech talent becomes increasingly competitive, the Middle East has emerged as a contender to snatch the best and brightest from the Western world and parts of Asia.
When I first arrived in the Middle East around 10 years ago, its financial industry was heavily reliant on the likes of Emirates NBD, the ‘bulge bracket’ banks and large sovereign wealth funds.
At that time, the venture capital (VC) scene in the region remained very small. There were only a handful of VCs investing in the fintech and tech industries. Compare that to the UK, which saw technology businesses raise a record-breaking $3.6billion in VC funding in 2015, and it’s clear just how wide this gap was between the entire Middle Eastern region and other global powerhouses.
But now, that picture is changing. There are dozens and dozens of VC firms operating in the Middle East that are all investing in the emerging fintech industry in the region. Increasing numbers of people are leaving the Emirates NBDs and Morgan Stanleys of the region in an attempt to create the next Tabby.
If you read the MAGNiTT Q1 2024 VC Report, which highlights a 24 per cent decline in deal volumes and 60 per cent decrease in capital deployed compared to Q1 2023, it all appears to be doom and gloom for the MENA region.
But if you compare the current VC landscape to what it was 10 years ago, there are vastly more opportunities to secure investment from tech investors now. As a result, there are a lot more jobs opening up within smaller fintech firms.
Attracting talent to the Middle East
It’s no secret that regulators across the Middle East have adopted a pro-innovation approach — making countries like Saudi Arabia and the UAE far more attractive to prospective founders and investors. Pairing this with government incentives, grants, and rebates, alongside the growing number of local accelerator schemes and incubators, ensures that more fintech start-ups from Asia are considering settling here instead.
The VC space in Saudi Arabia is going from strength to strength, meaning fintechs from Singapore, Hong Kong and mainland China are beginning to recognise the greater availability of investment there, than from various parts of Asia. All of these factors result in a larger number of assets and companies operating in the Middle East, ensuring a significant uptake in the proportion of fintechs hiring and creating more opportunity for good fintech talent to move here.
While countries here remain focused on making themselves more attractive by investing in quality of life and creating efficient visa and residency programmes, there are also push factors to consider – making it more likely that talent wants to leave the likes of London, Hong Kong, Singapore, and San Francisco. Regulatory complexity, high business operating costs, and increased market saturation are just some of the factors that could push talent away from these locations and towards the Middle East.
It’s not hard to argue that we could see a slow decline of talent across the US, Europe, and Asia in the next five to 10 years – as more and more talent decides to roll the dice and try out opportunities offered by well-funded start-ups and scale-ups in the Middle East.
This trend could become more commonplace as these countries continue adopting more cultural norms from Western society, as they improve gender equality, as well as embracing the sale of alcohol, among other factors.
A word of caution
Ten years ago, most of the money from the Western world was directed into Asian, American or European start-ups. Many funds were raising capital in the Middle East but then investing it elsewhere across the globe. Now, they direct much more money into the Middle East.
Now, the government and other capital pools are ensuring that this money stays within the region to bolster the local landscape. Keeping capital within the geography accelerates the development of ecosystems across the Middle East – which, in turn, creates more jobs and fosters a domino effect throughout the region
However, it’s important to note that this is still a frontier market. For the biggest, most established investors, the size of deals available here isn’t as big as is currently available in Singapore, for example. While there is still a huge amount of untapped potential, the Dubai ‘Wall Street’ is only 20 years old, while the ‘Wall Street’ of Abu Dhabi was only established eight years ago.
The biggest deals are still cut in New York, London and Singapore. But the Middle East has so much to offer – and the lifestyle on offer here might just be enough to turn the tide long-term.
