UAE tech sector gains speed as fledgling firms secure investment funding
The nascent technology investment sector in the UAE is gathering pace after two deals for fledgling companies were announced.
Carpool Arabia, which helps UAE commuters share their ride to work, has raised US$350,000 to fund its growth. Kima Ventures, a French venture capital company, and Mediaquest, a media group in Dubai, made a joint investment for a 30 per cent stake.
Meanwhile, Taskspotting, a mobile app that allows brands across the UAE to engage with customers, has said it has secured more than $1.2 million in funding from Mena Venture Investments, wealthy individuals and a Saudi institutional investor.
Fadi Ghandour, the founder of Aramex and a co-founder of Mena Venture Investments, said the year-old firm behind Taskspotting was “a game-changing company”.
“We’re exceedingly impressed with the business model, the traction they have gained to date and the capable team who have put it all together,” he said.
Carpool Arabia, which was launched last year, said its user numbers were growing at a monthly rate of 21 per cent.
It presently offers 650 rides a day, and claims that it is at least five times cheaper than using a taxi regardless of whatever routes a passenger takes.
The funds will be used to build a mobile app and for marketing.
Benjamin de Terssac, a co-founder of Carpool Arabia, said his company needed the equity-based funding to grow its business.
“Right now we don’t earn any revenue from the business and we aren’t disclosing all our revenue models at present,” he said. “At a business-to-business level, we believe that large corporations will pay to use our technology and expertise to organise an environmentally-friendly and energy-efficient way of bringing their staff to work. At a company-to-company level, we may take a small commission on the transactions in the future.”
In 2008, the Dubai government legalised carpooling with the Sharekni system, but drivers cannot make a profit and only take a nominal amount to offset the cost of the ride.
Carpool Arabia’s technology has an algorithm that works out the cost of any journey, incorporating petrol, insurance, depreciation and the number of passengers in a car. The service is presently only offered to people travelling to and from work.
The head of Beco Capital, a venture capital firm, said this week that it was expecting the number of companies seeking its investment this year to increase about 25 per cent.
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Updated: September 30, 2015 04:00 AM