The UAE start-up ecosystem is fast gaining global popularity, drawing venture founders and investors from around the world on the back of concerted and coordinated efforts by the government and corporates, a sector expert said.
The trend is projected to gain further momentum in the coming months and years, as more support systems develop, including access to technology applications, computing power, talent anywhere and early-stage venture capital, lowering the entry barrier for start-up ventures to the region.
“The reality is that innovation and disruption is happening at a feverish pace [in the UAE],” Vijay Tirathrai, managing director of the Techstars Hub71 Accelerator and a veteran in start-up mentoring globally, told Arabian Business in an exclusive interview.
With around 20 tech companies having set up shop in Abu Dhabi, Tirathrai said there are more start-ups are in the pipeline.
“Today, [the Techstars Hub71] roster of 209 tech founders originate from 43 countries which shows the [rising] global interest in Abu Dhabi’s start up ecosystem,” Tirathrai said.
“An increasingly vibrant ecosystem led by tech hubs, accelerators, corporate start-up labs and on-ramping programs by tech giants, coupled with an incentivised environment by governments has made it all the more alluring.”
Techstars, a global platform for investment and innovation running 50 accelerator programs around the world, conducts the Techstars Hub71 Accelerator Program in Abu Dhabi in partnership with Mubadala Investment Company.
“It’s the best time ever to start a business [here],” added Tirathrai, who is also the former CEO and chairman of the Washington DC-based Entrepreneur’s Organization.
“Through Techstars partnership with Hub71, we have seen close to 20 technology start-up ventures setting up in Abu Dhabi. Many of the companies I know have engineering and business development teams distributed around the world, whilst having a presence in Abu Dhabi. This is the norm now,” he said.
Worksathlon, Aumet, DesignHuz, Flaist, Dopay, Educhain, Nestrom, Sensgreen, Yacob, Bonflite, Strategy Connect and Klaim are among the start-ups that have set up shop in the UAE through the Techstars Hub71 programme.
The veteran start-up mentor also commented the UAE government for incentives like subsidised housing, office spaces and health insurance, and five-year visas to make it attractive to early-stage companies, but felt more needed to be done.
Vijay Tirathrai, managing director of the Techstars Hub71 Accelerator and a veteran in start-up mentoring globally
According to him, attracting tech giants to invest big in key infrastructure platforms, like data centres, 5G networks, opening national grids for financial systems, alternative energy, airspace for drones, IoT inter-connectivity and collaboration with key research centres around the world will enable a more robust ecosystem.
“This would allow start-ups to seek commercialisation, market adoption and scalability at a much faster rate and even export technology applications to the wider region. Besides, this will also enable a huge opportunity for start-ups seeking to anchor the base in Abu Dhabi, with the objective of penetrating the wider GCC,” Tirathrai said.
On a global level, the international hubs have a moving target to be highly competitive. In the UAE, there are several low hanging fruits to close the gap on – such as fast turnaround in opening bank accounts and flexibility in hiring part time and freelance talent, he pointed out.
“Increased liquidity with more incentives for international investors to set up shop here is needed. Access to capital markets by building fast track ‘ramps’ to the Nasdaq and New York stock exchange will enhance the stature of international hubs in UAE,” he said.
Tirathrai also said access to capital beyond early stage funding was still lacking, as are options for exits in the UAE.
Techstars, a global platform for investment and innovation running 50 accelerator programs around the world
On its tie-up with Mubadala, Tirathrai said the investment company partners with Techstars to invest in start-ups.
“Our portfolio companies from the 2020 and 2021 cohort are beneficiaries of Mubadala investment. Should these companies scale in size and seek later stage investments, we know that these companies can seek follow-on investments from top VCs around the world, including Mudadala,” he said.
Tirathrai, who has founded several businesses in Asia, also revealed that Techstars was exploring new accelerator programmes in the UAE and the region, and is potentially looking at Saudi Arabia next.
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