TEL AVIV – Israeli venture capital firm OurCrowd is investing tens of millions of dollars to start an artificial intelligence company in the United Arab Emirates, the latest sign of deepening business ties between the two neighbors after the establishment of diplomatic relations two years ago.
OurCrowd said it is partnering with Abu Dhabi Investment Office, a government entity responsible for facilitating investment in the UAE capital, to expand its operations in the country, which will see its team grow from four to 60 employees in over the next four years.
The two entities will invest a total of $60 million for the expansion, most of which would be used to set up the new AI business, named Integrated Data Intelligence Ltd., according to Jon Medved, founder and managing director of OurCrowd. . The new company will serve as a technical hub for companies looking for AI as a service.
The story of the Abraham Accords is not a one-way investment, Medved said, but “how we build things together.”
OurCrowd’s announcement follows a similar announcement by Israeli fintech firm Liquidity Group, which said on Tuesday it was establishing a research and development center in Abu Dhabi with support from the Office of Abu Dhabi investment.
Abdulla Abdul Aziz AlShamsi, acting chief executive of the Abu Dhabi Investment Office, said his organization opened a branch in Tel Aviv last year to both better understand Israeli businesses and help them grow in Abu Dhabi.
“Israel is a key focus for Abu Dhabi, given our two markets’ shared vision on using innovation for impact,” he said.
Since Israel and the United Arab Emirates normalized diplomatic relations at the end of 2020 in a US-brokered agreement called the Abraham Accords, bilateral trade between the two Middle Eastern countries has exploded and Hundreds of thousands of Israelis have flocked to the Arab nation, including Dubai and Abu Dhabi, as tourists. From September 2020 to March 2022, non-oil trade exceeded $2.5 billion, while it reached $1.06 billion in the first three months of 2022, five times the total for the same period in 2021.
In May, Israel and the United Arab Emirates signed a comprehensive free trade agreement, the first of its kind, between Israel and an Arab country. Officials said the deal would help trade grow to more than $10 billion within five years.
Israeli and Emirati officials say they want Israeli companies to expand their business in the UAE and take advantage of its location and existing network to expand into markets in Asia, Africa and others Arab countries in the region.
Medved and other Israeli business leaders say opening offices in the UAE also makes it easier to access global tech talent, as it’s easier to get work permits there than in Israel , while keeping operations a short flying distance from home.
Yet only a handful of Israeli companies are known to have established a physical presence in the UAE so far.
Medved said dozens of Israeli companies are looking to increase their presence in the UAE, but efforts are taking longer than expected as Israelis, used to fast transactions, become accustomed to an Emirati business culture which relies heavily on trust and established relationships.
Mr AlShamsi said his organization will not have a stake in AI company OurCrowd, but offers financial incentives, including rebates, to support the expansion of Israeli VC in the emirate.
Israeli fintech ThetaRay, a OurCrowd portfolio company, made headlines in February when it won a contract to use its AI platform to monitor the financial transactions of Emirati bank Mashreq for business. criminals. The company has since received other contracts in the United Arab Emirates and opened an office in Dubai to manage customer relationships and protect financial data that cannot leave the country, said Mark Gazit, the company’s chief executive. .
Mr Gazit said his company plans to expand ThetaRay’s office in Dubai and open offices in neighboring Abu Dhabi.
He said Israeli companies seeking partners in the Gulf country would benefit from similar measures.
“They want to know they can trust you. So it’s important to be there,” Gazit said.
He said his presence in the UAE has improved his company’s ties with customers in Africa and expanded his network in the region. In the short term, he said he expects his company to do more business with Bahrain, another signatory to the Abraham Accords.
“We see the United Arab Emirates as a gateway. … Hopefully in the near future, countries like Saudi Arabia and Oman will use our solutions,” Gazit said.
Neither Saudi Arabia nor Oman have normalized relations with Israel, which means that all business activity with Israeli companies is done through third parties or kept secret.
Liquidity Group chief executive Ron Daniel said the total investment in the R&D center is around $50 million and will bring the company’s workforce in Abu Dhabi to 75 from the current 35. by the end of next year and 200 by the end of 2024.
Daniel said Liquidity Group has already hired data scientists from around the world to work in its Abu Dhabi offices, including in Jordan, Nigeria, Turkey and Singapore.
Write to Dov Lieber at email@example.com
Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8