In Abu Dhabi, a new start-up ‘accelerator’ promises more success stories
Flat6Labs announces expansion at ADMS 14 and its mandate is to support entrepreneurs with ideas but are not sure how to actualize them
The Middle East and North Africa (MENA) region is known as a challenging place for setting up small-scale businesses and start-ups mainly for the difficulty of securing capital investments. But a recently announced Middle Eastern start-up “accelerator” promises a change.
Flat6Labs, an Egyptian program which for years has supported aspiring entrepreneurs with everything: from funding to necessary training, aims to inspire and push forward a new generation of Arab entrepreneurs. It announced a new expansion into the UAE on Wednesday as part of the annual Abu Dhabi Media Summit which is organized by twofour54, Abu Dhabi’s renowned media, production and creative hub.
“It’s a program mainly designed to support startups or entrepreneurs who have ideas but don’t know how to start actualizing these ideas or their dreams into businesses,” Ramez Mohamed, CEO of Flat6Labs, told Al Arabiya News.
“We get them from the idea stage into the investable company stage where investors can come in and invest in them after they graduate the accelerator,” Ramez said.
Speaking about the challenges facing new entrepreneurs, Ramez said the biggest obstacle of all is “access to capital.”
“There is a gap in the angel investor stage in this region,” he said referring to usually affluent individuals willing to provide capital for a business start-up in exchange for equity or convertible debt.
“Many investors would think twice before they invest in a start-up…because we don’t have that many success stories we don’t have that track record of successful exits in this region,” he added.
Accessing market data is another challenge for start-ups in the MENA region.
“Many off the markets in the MENA region are closed markets in terms of data or information.,” Ramez said.
“So, they [entrepreneurs] don’t have the right information about competition, about regulations… and can’t pay a consultancy company to do the research on their behalf.”
But Flat6Labs aims to help innovative entrepreneurs overcome such prevalent obstacles promising them seed funding, office space, registration, legal support, connections with investors, education and training that would enable them “to scale their businesses in the future.”
People with start-up ideas would have to go through an online application process where they have to present their business model and demonstrate their understanding of the market. Once shortlisted, about 50 candidates will go through a five-day “bootcamp” where they receive necessary training to present their case before a Flat6Labs committee to be selected for a four-month “cycle.”
Upgraded candidates in Egypt will be trained by experts – usually entrepreneurs who have recently, successfully set up their startups. They will then be granted up to $20,000 to setup their business in exchange for equities – the main revenue sources for Flat6Labs. Flat6Labs Jeddah promises up to $25,000 for seed funding.
When asked about how winners are selected, Ramez said the people who stand out are the ones “who have an innovative idea, who study their market very well…who have the right market fit against their competition.”
“We don’t call them winners because it’s not a competition. It’s an investment vehicle. It’s a pure investment play,” he noted.
Since its inception, Flat6Labs has assisted in the establishment of 57 technology business across Egypt and Saudi Arabia, creating with more than 400 jobs in both countries.
Egyptian-based Nafham, a free online K-12 crowd-sourced educational video platform is one of the “accelerators” graduates. The educational platform boasts about 20,000 videos and more than a 300,000 students, and offers a Syrian curriculum for Syrian refugees.
Flat6Labs Abu Dhabi
Flat6Labs originally started in Egypt in 2011, expanded its services into Saudi Arabia in 2012, and has now opened an office in Abu Dhabi. The launch took place Wednesday at the Abu Dhabi Media Summit.
"Accelerators have proven to be one of the most effective vehicles today for helping to build scalable, investment-ready companies,” said Nina Curley, managing director of Flat6Labs Abu Dhabi, in a statement.
"We also intend to seed a culture of entrepreneurship here in Abu Dhabi that supports youth to transform their talent into economic opportunity,” she added.
Flat6Labs Abu Dhabi, in partnership with twofour54, the commercial arm of the regulatory government agency Abu Dhabi Media Zone Authority, and United Markets International Holding, plans to help launch more than 80 companies in the upcoming four years. The program will be particularly focusing on business related to digital content, e-commerce, social media and citizen journalism, media and video productions and mobile applications.
“The UAE is full of opportunities for entrepreneurs. And we have seen so many success stories coming out this country in the past few years,” Ramez said. “It was inevitable to open here at some point.”