Abu Dhabi's Hub71 more than doubles number of start-ups and VC funds during pandemic
A strong response to the coronavirus pandemic in the UAE allowed Hub71 to more than double the number of start-ups housed at the Abu Dhabi entrepreneurship centre in the past 18 months, its chief operating officer said.
Companies reported a doubling in venture capital funding and an average revenue increase of 35 per cent after joining, Jida Itani said.
“Competition [to attract start-ups] is so fierce,” she told The National. “But what Abu Dhabi has to offer today is really powerful.”
The pandemic showed Ms Itani that Abu Dhabi is ready to learn lessons quickly and has an advantage over other cities in terms of safety and livability – something the marketing expert can sell to founders looking to build teams here.
Today, Ms Itani said Hub71 is ready to compete on a global level amid a breakneck race to attract talent.
A remodelled incentive programme and a growing pool of venture capital funding indicates Hub71 is maturing.
Governments, including South Korea, Spain, Brazil, Singapore and Israel, are providing some combination of incentives or subsidies, tax breaks and more agile policymaking to attract entrepreneurs.
Vibrant start-up ecosystems are a critical part of growing an economy, according to the Harvard Business Review, which found that a pool of talent and applied science will drive job creation, new businesses and investment.
Hub71 opened its doors at Abu Dhabi Global Market more than two years ago through a partnership between the emirate's Mubadala Investment Company, Abu Dhabi Investment Office, Softbank Vision Fund and Microsoft.
The centre tapped into the government's Ghadan 21 stimulus fund to offer Dh1 billion in investment and cost-of-living subsidies to start-ups that opened for business in the hub.
To date, Hub71 has accepted 129 start-ups into its competitive incentive programme, which began by offering subsidised housing, health insurance and office space for the first two years.
But Ms Itani said that the programme is being overhauled to incorporate what Hub71 has learnt about founders' needs.
“Founders come at various stages, and some don’t really require free housing and free health insurance,” Ms Itani said. “Some of them actually want free business development services to connect them with large corporates or grants for legal support as they fundraise, because this is very expensive.”
Fund-raising is a critical component of the Hub71 offering. The number of VC partners has more than doubled since the start of the pandemic. There are now 19 VC funds covering early angel and seed investing to bigger ticket investors, with $2bn in assets under management.
Start-ups have raised a total $59.9m from Hub71 VC partners to date.
Hub71 is also moving beyond freebies to attract entrepreneurs and investors to the space.
Last month, Hub71 opened a Community Centre of Excellence, the first time it opened its doors for non-incentivised start-ups, investors, corporates and government.
The initiative aims to source high-quality global tech start-ups through a series of events open to organisations seeking to connect with entrepreneurial talent.
“We are seeking ways to bridge the gap between entrepreneurs and the marketplace,” Ms Itani said.
More mature start-ups that have found a home at Hub71 are also creating job opportunities.
Music streaming service Anghami, which will go public by special public acquisition on the Nasdaq, is basing its research and development centre at Hub71.
Meanwhile, Hub71 start-up Nanoracks, a major player in commercial access to space, expanded with a new Space AgTech company, StarLab Oasis, last month. The new company aims to address growing problems of desertification, climate change, water scarcity and food security.
These moves have convinced Ms Itani that Hub71 is shifting up a gear.
“We need to do things bigger and better, but that we need to act fast,” she said.