Coaching programs, government funding fueling UAE startups

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Generous government funding and programs to help kick-start small businesses have led the United Arab Emirates to develop a bustling start-up scene over the last five years, with the country leading the way in the Middle East and North Africa.

There are currently around 4,000 start-ups – generally companies that set up with just one or two people – in the UAE, according to online start-up directory Startup Stash as the industry continues to flourish.

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“[Businesses are] in the right place and at the right time, the amount of activity in the region and around this startup ecosystem... we’re just seeing it kind of built up, and [to] build up at the rate it is doing it at is quite exciting,” GrubTech CEO and co-founder Mohamed al-Fayed told Al Arabiya English.

“It's a unique opportunity,” he added.

According to a 2022 ranking by Forbes, the UAE tops the list of 50 start-ups in the Middle East and North Africa region who have raised the most money from investors since their inception. A total of 22 start-ups in the UAE have secured nearly $1.8 billion in investments from their date of creation, making up more than 60 percent of the lists total funding.

GrubTech, which Fayed founded in 2019 with two other business partners, ranked 43 in the list. The company, which helps restaurants manage their books and administrative procedure such as food orders and reservation services, now has a total funding amount of $18.5 million dollars, according to Forbes.

UAE headquartered firms Kitopi, Pure Harvest Smart Farms, and Starzplay came first, second and third respectively in the Forbes ranking. Between them the companies have raised a total of $1.2 billion.

“It is great to see, the massive amount of funding that has now been raised by startups,” Nihal Shaikh, assistant director of marketing and communications at Abu Dhabi-based StartAd – an accelerator program to help start-ups set up and develop – told Al Arabiya English.

She noted that when StartAD was first set up in 2016 the UAE only really had startups Kareem ride hailing app, later bought out by Uber and online retailer Souq, which was later acquired by Amazon.

“There's a lot of government incentivization and prioritization [for startups now],” Shaikh added.

StartAD is just one of those examples. The startup accelerator – a group of experts that run programs, often have coworking spaces for entrepreneurs and can help connect nascent business leaders with investors and larger corporations – is funded by the Abu Dhabi government, Shaikh said.

The programs that the accelerator runs include the Corporate Sprint Accelerator for FinTechs which includes expert training as well as helping connect companies with other investors.

StartAD’s al-Warsha program gives entrepreneurs access to software and tech labs to help them test and develop their products.

Over the last five years StartAD has hosted 371 businesses, including 250 tech startups, Shaikh said.

Abu Dhabi’s Hub71 is another accelerator and part of the government’s Ghadan 21 initiative.

No more bureaucracy

The accelerator – which has a 50 billion AED ($13.6 billion) mandate from the Abu Dhabi government to help startups, according to Shaikh, also helps companies bypass red tape that can make it difficult, time consuming, and expensive for a small business to set up in the UAE.

“Until recently there were no entrepreneur visas, golden visas, etc,” said Shaikh. “Visas were prohibitive [in people setting up companies in the UAE].”

But Hub71 helps entrepreneurs get golden visas which grants them long-term residency in the UAE.

“I think the UAE as a country and Dubai, as a city have done a phenomenal job to streamline and digitize the [startup] establishment process,” said Fayed.

When GrubTech set up it was part of the In5 incubator program based in Dubai. Fayed said that In5 subsidized the small business’ costs in the first year it was setting up “by almost half if not more,” gave the entrepreneurs a hot desk to work and helped the company sponsor up to four employees on a company visa.

“It's a pretty neat initiative and these guys… they did a phenomenal job getting us started,” he said. Adding that the process was “so seamless.”

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