Dubai Is Bait in War for Coder Talent Fought by Israel Firms
(Bloomberg) -- One of Israel’s fastest-growing technology firms is opening a Dubai office to lure international talent as a way around the chronic labor shortage plaguing the industry at home.
Rapyd, a payments firm that twice raised $300 million in funding rounds this year, started a large advertising campaign this week targeting coders in eastern Europe open to relocating to the Middle East financial hub, where the standard of living is higher and which imposes no income tax.
It’s a remedy that may increasingly appeal to other startups navigating a market where job openings far outnumber applicants as record investment pours into Israel.
Chief Executive Officer Arik Shtilman said in an interview that Rapyd plans to staff about 100 people in the new branch within 18 months. More than 10 Israeli startups have already sought his advice about opening an office in Dubai, he said.
“We won’t be the only ones,” Shtilman said. “In 12 months time, you’ll see quite a lot of Israeli companies opening there.”
The shift would dovetail with a charm offensive by the United Arab Emirates, of which Dubai is a part, to attract employees from all over the world by offering a new remote work visa and long-term residency to talented coders.
A landmark deal last year to establish diplomatic ties with the UAE means Israel’s companies can dangle the extra perk of relocating to Dubai.
In response to the labor shortages Israel suffered during the pandemic, the country may allow high-tech companies to bring in some foreign workers, Finance Minister Avigdor Lieberman said on Monday in televised remarks. Speaking to his party’s legislators, Lieberman described the plan as a “kind of experiment” and gave no timeline or any other details.
Up until now, similar efforts have stalled, with some in Israel concerned such measures would dilute the country’s Jewish majority.
“Getting a hundred people from all over the world to work in Israel is a mission impossible,” said Shtilman, who is currently seeking to fill about 350 positions. By contrast, the process with the regulators in Dubai was “very smooth, very clear, like slicing butter,” he said.
Similarly to most high-flying startups, Rapyd is seeking innovative ways to attract highly skilled workers and maintain its breakneck pace of growth. The fight for talent in Israel rages as startups have raised $25.4 billion this year.
“One of the main reasons companies raise more money is to hire more people,” said Matan Bar, chief executive officer of Melio, an Israeli payments startup that tripled its valuation to $4 billion this year. For “companies that have higher aspirations and bigger plans -- it all relies on getting bigger teams.”
As well as Rapyd’s base for expansion in the Middle East and North Africa, the Dubai office will also house engineers to help build the company’s offerings, Shtilman said. It landed on the idea after experiments with remote engineering hubs in Asia failed, he said.
Other startups could follow suit given the absence of a foreign visa plan, said Bar, who is looking to more than double headcount to 1,000 workers.
Bar said he has had “initial engagement” with Israeli officials about ways to let in more tech workers, and Melio prefers to have as many employees as possible in its Tel Aviv headquarters because that drives creativity and efficiency.
But “if that’s not possible, then we’ll do what everyone else is doing in order to meet the demand for people,” he said.
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