SMEs are a crucial part of the UAE’s economy. One of the main issues which these companies face is access to the right capital. Without the much-needed funding and cash behind them, SMEs can find it difficult to grow. Sabir Shaikh, Chairman at TIIR Investment, explores how private equity has played a pivotal role in transforming mid-sized businesses into market leaders.
Small- and medium-sized enterprises (SMEs) are more than just contributors to the UAE’s economy – they are its dynamic core. Representing over 94% of all registered companies, SMEs account for around 52% of the non-oil GDP and employ more than 86% of the private sector workforce. Yet, despite this critical role, many of these businesses remain stuck at a growth impasse – unable to evolve into larger, more competitive enterprises.
The underlying issue is not a lack of ambition or opportunity, but access to the right capital, strategic partnerships and institutional frameworks that enable scale. Companies like TIIR Investment are helping UAE’s underserved middle-market segment catalyse transformational growth.
The plateau most SMEs struggle to cross
After initial success fuelled by founder capital, friends and family funding or early-stage investors, many UAE SMEs encounter a growth bottleneck. Whether the goal is to scale regionally, invest in technology, upgrade infrastructure or streamline operations, their needs begin to outpace the financial instruments and support systems available to them.
Bank financing remains difficult for SMEs without collateral or predictable cash flows. Meanwhile, venture capital tends to focus on early-stage, high-growth start-ups, leaving more mature, but smaller-scale businesses in a funding void. These middle-market enterprises, typically generating AED10 million to AED200 million in annual revenue, remain rich in potential yet underserved.
Private equity as the strategic growth partner
Globally, private equity (PE) has played a pivotal role in transforming mid-sized businesses into market leaders. In the UAE, its role is increasingly relevant as local SMEs look to:
● Expand into new markets, especially across the GCC and broader MENA region
● Adopt digital tools to boost efficiency and customer reach
● Execute M&A strategies in fragmented sectors
● Institutionalise their businesses in preparation for future listings or exits.
1. Patient growth capital
PE firms provide capital aligned with long-term value creation rather than short-term returns. This helps businesses avoid over-leveraging and focus instead on expansion, R&D or strategic hiring.
2. Strategic and operational guidance
Experienced PE investors offer insights that go well beyond capital. They help improve unit economics, professionalise management and refine go-to-market strategies – critical elements for scaling in a competitive regional landscape.
3. M&A and market consolidation
Many sectors in the UAE – such as logistics, HealthTech, professional services and F&B – remain fragmented. PE-backed M&A can help consolidate these markets, unlock synergies and position local firms for regional leadership.
4. Governance and institutional strength
Strong corporate governance is no longer a ‘nice to have’ – it is a prerequisite for serious growth and global competitiveness. PE firms play a vital role in implementing board structures, financial discipline, ESG frameworks and compliance practices that elevate SME credibility in the eyes of banks, regulators and future investors.
The UAE’s untapped middle market
Despite ambitious national initiatives like Operation 300bn, which aims to increase the industrial sector’s contribution to AED300 billion by 2031, and reforms enabling 100% foreign ownership, the private equity ecosystem for SMEs remains nascent.
Investor appetite has historically been skewed towards:
● Large-ticket real estate or infrastructure investments
● High-risk early-stage start-ups
This has left a crucial gap in growth capital. For SMEs already demonstrating profitability and market traction, what they need most now is structured support to take the next leap – something the mature PE ecosystems in the US and Europe have been facilitating for decades.
At TIIR Investment, we recognise this gap as both a challenge and an opportunity. Our focus is on bridging it by delivering strategic capital and tailored support to growth-stage SMEs across the UAE. The time is ripe for a more concerted push to build this capability locally, and TIIR is committed to being at the forefront of that transformation.
A strategic imperative, not just a financial one
Fostering a strong private equity pipeline for SMEs is not merely a capital deployment strategy – it’s a national imperative. At TIIR Investment, we view this as a cornerstone of sustainable economic growth. A robust SME-focused private equity ecosystem can:
● Boost innovation and diversification in line with the UAE Vision 2031
● Deepen local value chains and reduce import dependence
● Create sustainable employment across high-impact sectors
For this transformation to take hold, investors, advisors and policymakers must coalesce around enabling frameworks – ones that make private equity more accessible, trusted and tailored to the SME context in the region. TIIR is actively contributing to this shift, championing investment strategies that align with the unique needs of SMEs while fostering long-term value creation.
Subtle shifts are already underway. Emerging platforms in the UAE are beginning to connect high-potential SMEs with investors seeking curated opportunities. As these ecosystems mature, they can play a vital role in deepening trust, preparing businesses for institutional capital and building a pipeline of future market leaders – an effort TIIR is proud to support.
The road ahead
The success of the UAE’s economic vision depends not only on bold policymaking but also on the private sector’s ability to scale sustainably. At TIIR Investment, we believe that private equity, when deployed with discipline and strategic insight, can serve as the bridge between ambition and execution.
In a region that has already demonstrated a strong appetite for innovation and transformation, the next frontier lies in enabling homegrown businesses to evolve into global brands. The building blocks are in place – what’s needed now is momentum,focus and collaboration. TIIR is committed to driving that momentum, partnering with visionary entrepreneurs to unlock the full growth potential of the UAE’s SME ecosystem.
