‘Hub71 has made $500 million in new funds available to its community, which includes three British startups.’
If technological solutions hold the key to coping with many of the challenges presented by the pandemic, then tech companies have a unique opportunity to shape the post-Covid-19 world, and so too do the incubators and start-up communities that cultivate them. The question is, which emergent tech companies might prove to be the game-changers, and where will they emerge?
“This is an opportunity to use technology and data for potentially enabling, supporting and empowering a new world order,” says Ibrahim Ajami, interim CEO of Hub71, a tech ecosystem launched in March 2019 in Abu Dhabi to promote innovation and support the growth of transformational tech start-ups.
Named after the UAE’s formation in 1971 and backed by Mubadala Investment Company, Hub71 is a flagship initiative of the AED 50 billion ($13.6 billion) economic accelerator program Ghadan 21, which means ‘tomorrow’ in Arabic.
It has since made $500 million in new capital available for Abu Dhabi-based startups and VCs.
“Already in the past month we are seeing applications from interesting technology companies that offer novel solutions for a post-Covid world — whether that’s in education or healthcare or collaboration and communication,” says Mr. Ajami, who is also head of ventures for Mubadala Capital.
“We have an opportunity to position ourselves as an exciting place for some of these startups to launch. And you’re also going to see Mubadala more interested in these investment opportunities and for Hub71 as a platform to support them for growth.”
Among the impacts of the current crisis is potential acceleration of the development of tech hubs beyond Silicon Valley.
Post-pandemic, the jumble of researchers, companies and universities working in proximity might not be a desired or realistic model. With more activities shifting online, thriving tech hubs could crop up — and thrive — anywhere. Hub71 believes it could be one of them.
“Our goal now, as we still grapple and navigate this very complex world we’re going to come back to, is to figure out what this means for Abu Dhabi moving forward,” says Mr. Ajami. “We are positioning Abu Dhabi as a place with a world-class healthcare system, security, a great standard of living and with all the technologies and tools that allow start-up founders to build their businesses in a remote way, if that’s what they need to do.”
Despite the inauspicious timing for its first birthday, Mr. Ajami says expectations have been exceeded for Hub71 at the one-year mark. “We are very happy with where we are a year into it,” he says.
So far 36 start-ups from eight different countries representing a range of sectors and sizes have signed on to the Hub71 Incentive Program, which offers seed and emergent start-ups either 50 or 100 percent subsidized housing, office space in the WeWork x Hub71 community and health insurance for up to three years.
Among the recruits are three UK-founded start-ups, dopay, EarthX and Techerly. Once onboarded, companies as well as VCs can apply for funds from the Abu Dhabi Investment Office (ADIO)’s Ventures Fund, which provides direct investment to Abu Dhabi-based start-ups, as well as matching funds for new fund managers. ADIO has to date funded ﬁve Hub71 start-ups and one VC, to the tune of AED 60 million ($16.3 million).
“We’ve had many applications from the US, Europe, the UAE and we’re on track to have 50 companies signed by the end of this quarter. We have corporates engaged and big partners like Microsoft and SoftBank,” Mr. Ajami says. “We’ve learned a lot and we also have a long journey to go. But we feel really good about all the things we’ve achieved in a short period of time.”
He attributes the attraction to Hub71 to Abu Dhabi’s livability, safety and security combined with the availability of capital and access to highly attractive regional markets.
It is undeniable, though, that the year ahead stands to be fraught with challenges for tech ecosystems and companies worldwide. That means the focus for year two of Hub71 will be different than planned and guiding its resident companies through the crisis is priority number one. Packages that have already been offered to startups by the Abu Dhabi government include subsidies on electricity connection fees, an allocation of AED 3bn to the SME Credit guarantee scheme to stimulate financing by local banks and free visa extensions for three months. Abu Dhabi Global Market, the international financial market and Hub71’s regulator and business enabler, has also frozen commercial licence renewals fees until March 2021.
“We’re also exploring the idea of putting a fund together that provides bridge capital to extend the lifeline of these startups another 12-18 months. Over the next few months, you’ll see us launching some new ideas,” says Mr. Ajami.
“We as Hub71, as a key initiative of the Abu Dhabi government, have a chance to demonstrate that we will support our startups, as they have supported us by being inspired and excited to join us, we now want to show that we will support them during the difficult times too. That is something that will differentiate us.”