The normalization of relations between the UAE and Israel paved the way for billions of dollars of bilateral business opportunities.
In late November, Dubai-based DIFC FinTech Hive—the biggest financial-innovation hub in the Middle East—signed a milestone agreement with Israel’s Fintech-Aviv. Both entities will work hand-in-hand to facilitate the cross-border exchange of knowledge and business between Israel and the United Arab Emirates.
“Like Dubai, Israel is well-regarded for its approach to innovation and for embracing fintech, so it is important to collaborate now to share knowledge and develop the sector further,” said Raja Al Mazrouei, executive vice president of DIFC FinTech Hive, in a press statement.
This agreement results from the normalization of relations between the UAE and Israel formalized in mid-September 2020, paving the way for billions of dollars of bilateral business opportunities.
Investors and entrepreneurs on both sides are keen to secure partnerships. Just a few weeks after the deal, UAE businessman Abdullah al Naboodah signed with Israeli venture capital firm OurCrowd to create Phoenix Capital, a $100 million joint investment platform specializing in tech.
“The positive energy around this topic is currently at its peak,” says Gaurav Dhar, a board member of the MENA Fintech Association. “A measurable impact will only come to light in 12 to 24 months. So, while the visibility is high at the moment, fintech players will capitalize on the momentum as much as possible.”
“I think that it should be positive for the UAE startup scene both from [the perspective of] an increase in funding, with investors that are very ‘risk on’ for the right propositions, and opportunities to collaborate with the Israeli ecosystem,” says Craig Moore, founder and CEO of Beehive, a Dubai-based peer-to-peer lending platform that offers loans to small and medium-size enterprises (SMEs). “I believe it will also provide further comfort to US and European investors in the region.”
Banks are also joining the race. Israel’s largest, Bank Hapoalim, has already signed memorandums of understanding with the DIFC, Abu Dhabi Global Markets and Emirates NBD. Bank Leumi, another Israeli lender, signed similar agreements with Emirates NBD and First Abu Dhabi.
Over the past few weeks, Bahrain, Sudan and Morocco have also normalized relations with Israel, creating even more economic expectations. However, this diplomatic shift raises concerns for companies and entrepreneurs in Arab countries that don’t recognize or are officially at war with Israel.
