Generous government funding and programs to help start small businesses have led the UAE to develop a vibrant start-up scene over the past five years, with the country leading the way in the Middle East and North Africa .
There are currently around 4,000 start-ups – typically businesses that were created with just one or two people – in the United Arab Emirates, according to the online startup directory Startup Stash, as the industry continues to thrive.
“[Businesses are] in the right place at the right time, the amount of activity in the region and around this ecosystem of startups… we just see it growing, and [to] growing at the rate it is doing 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 United Arab Emirates tops the list of the 50 start-ups in the Middle East and North Africa region that 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 since their inception date, accounting for more than 60% of the listings’ total funding.
GrubTech, which Fayed founded in 2019 along with two other business partners, ranked 43rd in the list. The company, which helps restaurants manage their books and administrative procedures such as food ordering and reservation services, now has total funding of $18.5 million, according to Forbes.
The companies Kitopi, Pure Harvest Smart Farms and Starzplay, headquartered in the United Arab Emirates, respectively came first, second and third in the Forbes ranking. Between them, the companies raised a total of $1.2 billion.
“It’s great to see the huge amount of funding that has now been raised by startups,” Nihal Shaikh, deputy director of marketing and communications at Abu Dhabi-based StartAd – an accelerator program to help startups- ups to settle and grow – says Al Arabiya English.
She noted that when StartAD was first created in 2016, the UAE really only had startups Kareem ride hailing app, later acquired by Uber and online retailer Souq, which was later acquired by Amazon.
“There are a lot of government incentives and priorities [for startups now]“, added Sheikh.
StartAD is just one of these examples. The startup accelerator — a group of experts who run programs, often have coworking spaces for entrepreneurs, and can help connect budding entrepreneurs with investors and big corporations — is funded by Abu Dhabi government,” Shaikh said.
Programs run by the accelerator include the Corporate Sprint Accelerator for FinTechs, which includes expert training and helps connect companies with other investors.
StartAD’s al-Warsha program gives entrepreneurs access to software and technology labs to help them test and develop their products.
Over the past five years, StartAD has hosted 371 companies, including 250 tech startups, Shaikh said.
Abu Dhabi’s Hub71 is another accelerator and is part of the government’s Ghadan 21 initiative.
The accelerator – which has an AED50 billion ($13.6 billion) mandate from the Abu Dhabi government to help startups, according to Shaikh, also helps companies bypass red tape that can make the difficult, long and costly set-up for a small business. in the United Arab Emirates.
“Until recently, there were no entrepreneur visas, golden visas, etc.,” Shaikh said. “Visas were prohibitive [in people setting up companies in the UAE].”
But Hub71 helps entrepreneurs secure golden visas that grant them long-term residency in the UAE.
“I think the UAE as a country and Dubai as a city have done a phenomenal job of streamlining and digitizing the [startup] establishment process,” Fayed said.
When GrubTech was established, it was part of the Dubai-based In5 incubator program. Fayed said In5 subsidized the costs of the small business in the first year of its establishment “by almost half if not more”, gave entrepreneurs a shared office to work in and helped the company sponsor up to to four employees on a corporate visa.
“It’s a pretty cool initiative and these guys…they’ve done a phenomenal job of getting us started,” he said. Adding that the process was “so seamless”.
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