The UAE is the region's hotspot for startups - and the acquisition of Dubai-based shopping Souq by Amazon is just one example of the promising potential of the nation's startup ecosystem. Uber's acquisition of Careem is another.
Acquisitions only come to be a living reality after millions of dollars have been plugged into the business during its early stages. That's exactly what is dominating the conversation in the UAE's ecosystem this week.
UAE-based Tenderd, a heavy equipment rental marketplace for the construction industry, just announced its seed funding round - a total of $5.8 million. The funding comes from a group of regional and international venture capital (VC) firms and individuals - with BECO, a UAE-based early stage VC firm, and Y Combinator leading the funding round.
Interestingly enough, the UAE-based company received funding from several high-profile figures including none other than American entrepreneur and venture capitalist Peter Thiel. For those who need a reminder, Thiel is the author of Zero to One: Notes on Startups, or How to Build the Future - a book which gained traction in the regional ecosystem following its release in 2014. His career launched in 1998 when he co-founded PayPal - the online platform for money transfer – and grew bigger in 2004 when he invested in Facebook "where he serves as a director."
His interests as an entrepreneur and investor were diverted to many more startups later on. He has allocated early funding for LinkedIn and Yelp, to name two of the dozens of startups he's had the curiosity to invest in. The $2.5 billion net-worth investor is also a partner at Founders Fund, "the Silicon Valley venture capital firm that has funded SpaceX and Airbnb."
Other individuals who invested in the UAE-based company include Paul Graham, co-founder of startup accelerator and seed capital firm Y Combinator, and Justin Mateen, co-founder of Tinder.
Now, how did this come to be?
It all started 12 months ago when Arjun Mohan, the founder of Tenderd, turned a personal challenge into a full-fledged business. This came after Mohan found difficulties with finding equipment for his family's construction business. He launched Tenderd, joined Y Combinator (becoming the second startup from the Middle East to be accepted into the accelerator), and ultimately raised millions in seed funding.
"We're a startup run by a small, tight-knit team tackling a large and exciting problem," said Mohan in a statement.
"The construction industry has always lagged in adopting technology. However, our clients are increasingly more receptive to solutions that will help increase productivity and reduce capital investments. Our goal is to combine the efficiencies of a marketplace with the latest technologies to help them better compete."
The startup's team seems to have an energy that's caught everyone's attention. "It is very exciting to see a company from the MENA region taking on a world-class challenge head-on. Arjun and the team at Tenderd are ambitious dreamers and capable executors, the make-up of a great team," said Yousef Hammad of BECO Capital, in a statement.