Scalo Technologies’ Abdumalik Mirakhmedov on UAE’s entrepreneurial ecosystem

How strong is the entrepreneurial ecosystem in the UAE , what is the potential for startup growth, and what are the key factors behind this?

The UAE is a thriving entrepreneurial hub, with both Dubai and Abu Dhabi offering huge potential for startup growth. Government initiatives to attract global entrepreneurs and professionals have enhanced its appeal as a prime destination for startups looking to scale and expand their ventures.

Access to capital, including support from venture capitalists and angel investors, accelerates the growth of so many innovative enterprises.

At the same time, the UAE fosters innovation through an infrastructure that includes co-working spaces, accelerators, and research centres, which are all crucial for startup development. A diverse talent pool of skilled professionals from various industries strengthens its position as an ideal business destination.

Pro-business regulations also create an environment for startup success in Dubai, as in Abu Dhabi, making both a logical choice for ambitious startups aiming to thrive and succeed in the business world.

What were the key factors which persuaded you to bring Scalo Technologies to Dubai?

Firstly, the business environment here is phenomenal. The government has established a regulatory framework that is so comfortable, and allows us to build our business with confidence.

Dubai is at the heart of the MENA region, which is seeing rapid growth and offers great investment opportunities. A thriving UAE economy overall, and government initiatives to draw entrepreneurs and professionals, to Dubai as well as Abu Dhabi, were big attractions for us.

As a technology group focused on fast-growing sectors of the digital economy, we saw huge potential in connecting with global startups, as well as meeting founders based in Dubai and Abu Dhabi.

Logistically, the presence of Emirates Airline gives us easy access to any part of the world, making international business interactions very convenient.

Dubai, like Abu Dhabi, also offers outstanding social and lifestyle benefits, including a wide range of schools, restaurants, and sports clubs, making it an ideal place to live and work.

There is also a deep respect here for successful individuals, which creates a welcoming environment for entrepreneurs. And where else can you leave your car safely overnight, even with the keys inside?

With so many tech startups emerging in the region, what are the main criteria’s you use to decide which ones to invest in?

Scalo Technologies’ investment decisions prioritise startups addressing real-world problems, with immediate scalability potential, continuous innovation, and strong data management and privacy measures.

A robust business model with a clear path to profitability is essential. We also value startups that differentiate themselves from competitors through unique value propositions in a competitive market. In artificial intelligence (AI) ventures, maintaining trust and upholding ethical practices are essential to bring long-term sustainability, and build strong relationships with stakeholders.

While cutting-edge technology and intellectual property are crucial, the strength of the founding team is equally important. Dedicated founders with a skilled team are more likely to overcome challenges and lead the company to success.

Which sectors are you primarily interested in, and what’s currently in the pipeline for Scalo?

Our primary focus is on AI, SaaS, HPC, B2B Services, Gaming, and other frontier sectors of the digital economy. Scalo’s mission is to propel startups towards accelerated growth, empowering them to tap into the most rapidly expanding markets.

We recently led a multi million dollar investment in the web3 mobile game publisher, Hexacore, and have a number of other very interesting projects in the pipeline. We are currently in the process of setting up a gaming company in the UAE, and by the end of the year we plan to launch several games.

Scalo has also made investments in AI & HPC, and we will soon be announcing an investment in a California-based startup.

We’re particularly interested in cloud-based AI products and gaming companies, and are actively seeking breakthrough ideas with global growth potential.

We’re also open to exploring opportunities in other rapidly expanding sectors, particularly in markets showing significant growth potential over the next five to ten years.

The sector is seeing huge advancements in generative AI applications. How do you see this trend affecting jobs?

As with all major advancements in technology, jobs will be affected. But AI will also create new jobs, and help many people will build careers they could not have imagined before it came along. I have a clear visualisation of the way AI, and technology overall, are shaping the future for tomorrow’s entrepreneurs and business leaders.

With this in mind, I want to work with schools and universities in Abu Dhabi, Dubai and other Emirates to help young minds identify and pursue career paths in line with the way the world is heading.

How much potential do you see as an investor in Web3 gaming?

Scalo Technologies is deeply interested in gaming because of its surging popularity. The continual expansion of virtual reality, augmented reality, and cloud gaming platforms has opened new horizons for gaming enthusiasts worldwide.

Industry forecasts indicate that gaming will reach $187bn this year, and $212.4bn by 2027. The future of gaming lies in Web3, offering immense potential for exponential growth over the next three to five years.

Web3 functionality enables players to own in-game assets and actively participate in the game’s advanced economy. This ownership empowers players with decision-making capabilities, leading to increased engagement and more in-game transactions.

Our interest in gaming, which led to our investment in Hexacore, is heightened by the industry’s ever-evolving nature, particularly with the rise of Web3 and NFTs. There are an estimated 2.2 billion mobile gamers worldwide, and soon everyone in possession of a smartphone will have a crypto wallet installed on it.

This is a huge opportunity, and we see boundless potential for innovation and growth that will reshape the gaming experience for players and creators alike.

What are the key areas where entrepreneurs and startups mostly need help?

Unlike traditional VC funds, we prioritise quality over quantity, opting for fewer deals with more substantial investments. By doing so, we actively give founders the support they need most, beyond financial backing, to grow their companies.

We offer a comprehensive range of assistance to our portfolio companies. From helping with crucial hiring decisions to offering guidance in marketing, financial planning, and legal matters, our support is diverse. Drawing from our extensive experience, we offer universal insights that empower founders to scale their companies effectively.