Chasing sky-high valuations, Dubai bankers switch to tech sector

Swvl Holdings

04/02/2022 07:04

By Hadeel Al Sayegh
    DUBAI, Feb 4 (Reuters) - Faced with deal fees in the Gulf
region a fraction of those in markets elsewhere, many Dubai
bankers are handing in their notices, attracted by the lure of
cashing out, stock options and share grants at startups.
    Veteran investment banker Omar Abuinnab is one of them. He
left Guggenheim Partners' Middle East unit in December to set up
Keyper, a Dubai real estate technology start-up.
    Launched in January, Keyper describes itself as a private
banker to real estate investors. Such "proptech" companies
constitute a burgeoning global industry, which has secured $2.6
billion of global investment in 2019, up from $1 billion in
2016, according to a KPMG report in 2020.
    Abuinnab is not alone. Former Moelis & Co  MC.N  banker
Youssef Salem moved to Dubai-based transport startup Swvl, which
in July announced a merger with U.S. blank-check company Queen’s
Gambit  GMBT.O . The deal valued Swvl at roughly $1.5 billion.
    Amit Agarwal, who was at Goldman Sachs, joined Mideast
logistics and trucking technology firm TruKKer as group chief
financial officer.
    "In the past, people got into investment banking because it
was among the highest-paid jobs. Now they're trying to build
unicorns," said Abuinnab, referring to companies that are worth
$1 billion or more.
    Dubai's tech success stories have fuelled more interest into
the sector.
    Amazon's  AMZN.O  acquisition of Middle East online retailer
Souq.com in 2017 for $580 million triggered more deals in the
sector, including Uber's  UBER.N  $3.1 billion acquisition of
ride-hailing firm Careem in 2019.
    But for bankers, the payout for such deals can be slim
compared with those in other regions.
    Saudi Telecom Co's  7010.SE  tech unit Arabian Internet and
Communications Services Co said it would pay $12 million in fees
for its initial public offering, according to its prospectus in
September.
     The fees, shared by banks, lawyers and auditors, equate to
about 1.3% of the deal value, compared with 5% in the U.S. or
Europe. 
    Saudi Aramco,  2222.SE  whose offering raised a record $29.4
billion in 2019, paid top banks on the deal $3 million to $4
million each.
    Dubai has not had a major initial public offering since
2017, when Emaar Properties  EMAR.DU  spun off its unit Emaar
Development  EMAARDEV.DU  and listed the company on the local
bourse.
    That leaves people like Keyper CEO Abuinnab, 44, seeking
other outlets for their ambitions. He next plans to expand the
company's operations into global cities, including London.
     "Real estate investors are not well serviced in this
region. I wanted to elevate that experience from my financial
background to property owners to help them make better
investment decisions utilising real time data and analytics," he
said.  
    

($1 = 3.6726 UAE dirham)

 (Reporting by Hadeel Al Sayegh. Editing by Gerry Doyle)
 ((Hadeel.AlSayegh@thomsonreuters.com; +971566883310;))