Israel’s OurCrowd, a leading investment firm and the most active investor in the country, is set to open a global artificial intelligence (AI) innovation center in the United Arab Emirates’ capital Abu Dhabi later this year that will provide finance-focused, AI-based research as a service, a company official told The Times of Israel.
The center will operate as an “internal startup” of OurCrowd, which will be its first client, and will aim to grow its customer base from there, said Sabah al-Binali, a partner at OurCrowd and executive chairman of OurCrowd Arabia. In Israel on his first visit, he spoke to The Times of Israel on Wednesday on the sidelines of Fintech Week Tel Aviv, a three-day financial tech event.
OurCrowd received a license to operate in the UAE last November, becoming the first Israeli venture capital firm to be approved by the Abu Dhabi Global Market (ADGM), the international financial center in the capital.
Al-Binali said the global AI innovation center will provide advanced financial services and could prove as a model for additional projects in other industries such as medtech (medical technology) and agtech (agricultural technology).
He said OurCrowd was working with six of its portfolio companies to set up commercial activity in the UAE, including an Israeli medical tech company that is set to launch clinical trials and a possible manufacturing line. Al-Binali declined to name the companies as agreements were still being finalized, he said.
Last month, OurCrowd portfolio company ThetaRay, a developer of fintech software that mimics human intuitive decision-making to detect financial fraud, signed a deal to provide its services to the UAE’s oldest private banking institution, Mashreq Bank PSC.
Al-Binali hailed the agreement and said it will serve as a steppingstone to secure additional large banks in the UAE and the wider region as clients.
Slow and steady
A year and a half after the US-brokered Abraham Accords were signed in September 2020, normalizing ties between Israel and the UAE (quickly followed by Bahrain, Sudan, and Morocco), there has been “so much hope” for flourishing relations, “but the expectations on the business side may have been a little optimistic,” al-Binali said of the flow of investments that has yet to materialize.
Al-Binali said companies and startups both in Israel and the UAE “are active in international markets, and need time to understand new ones,” adding that the COVID-19 pandemic and cultural differences were also significant factors.
Israeli entrepreneurs “want to move fast” while Emiratis are more “strategic, move slower,” with both sides having deep, established ties in other markets and sectors. “Israeli startups often look to the US and Europe, and many also want to try other markets,” whereas the UAE has long-standing ties across the Middle East, Africa, and Asia, and “serves as a gateway to southeast Asia,” said al-Binali.
But there is a lot of room for collaboration, he indicated. “If we move away from the idea of investment flows and focus on joint business, there’s fertile ground there. If we think about joint work, where projects are co-founded and co-managed, we may see tremendous value,” al-Binali said.
He also suggested that with countries opening up more as the pandemic recedes, Emirati tech professionals could serve as an excellent solution for Israel’s chronic tech talent shortage in key roles such in development, engineering, and R&D.
“We could have a center of workers in Dubai and Abu Dhabi,” he said.
Despite the slower-than-expected pace of investments, there has been some significant activity. In January, the Wall Street Journal reported that the UAE sovereign-wealth fund Abu Dhabi’s Mubadala Investment invested some $100 million in Israeli venture capital firms since the signing of the accords. These include Mangrove Capital Partners, Entrée Capital, Aleph Capital, Viola Ventures, Pitango and MizMaa Ventures, all active investors in Israeli companies.
Combined with state-to-state trade and tourism, Emirati Minister of Economy Abdulla bin Touq Al-Marri said on the anniversary of the Abraham Accords last year that economic activity between the UAE and Israel could reach more than $1 trillion over the next decade.
“It is all very exciting on the social level, there is a lot of curiosity on both sides, but on the business level, we need more patience,” said al-Binali.