Hydrocarbons have powered Abu Dhabi’s economy since the discovery of its oil in 1958. But now the emirate - the capital of the United Arab Emirates - is moving to support homegrown tech start-ups as it looks to a greener future less dependent on fossil fuels.
Ahead of the World Economic Forum’s Annual Meeting of the Global Future Councils in neighbouring emirate Dubai, Abu Dhabi’s state investment company, Mubadala, has announced a new $250 million tech fund to enhance the status of the UAE as an innovation hub.
The first $150 million will be invested in venture capital funds supporting Abu Dhabi tech incubator Hub71. A further $100 million has been set aside for direct investments in early-stage firms in either the enterprise or consumer sectors.
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Hub71 was launched earlier this year by the UAE government to help diversify its economy away from oil-based industries. Based in Abu Dhabi, it takes its name from the year in which the UAE was founded,1971.
Innovation home hub
Hub71 hosts 18 companies, a number forecast to grow to 25 by the end of the year.
It provides incentives to encourage tech start-ups to locate to the Middle East and North Africa (MENA) region - including subsidized office space, housing and healthcare for founders and employees.
The UAE was home to the MENA region’s first unicorn – a start-up valued at more than $1 billion. The company, Dubai-based ride hailing app Careem, was acquired last year by Uber for $3.1 billion. The region's other unicorn is e-commerce start-up Noon, which raised $1 billion ahead of its launch.
What is the Annual Meeting of the Global Future Councils?
A giant brainstorm in Dubai, the Annual Meeting of the Global Future Councils takes place from 3-4 November 2019. It brings together more than 600 members of the World Economic Forum’s Network of Global Future Councils - leaders from academia, business, government and civil society.
The discussions will promote innovative thinking to address the biggest challenges we face, as well as emerging or cross-cutting topics related to the Fourth Industrial Revolution.
Investors have been pouring money into the region’s high-tech start-ups, especially in e-commerce. Excluding investments in the two unicorns, funding for UAE start-ups hit a record level last year, with almost $320 million invested in 110 deals – double the amount raised in 2017.
In 2018, UAE-based real estate website Property Finder raised $120 million. Logistics firm Fetchr, which delivers to the GPS location of a customer’s smartphone, raised $52 million and is being touted as the next MENA unicorn.
Earlier this year, the World Economic Forum named 100 Arab start-ups shaping the Fourth Industrial Revolution. The list includes 21 companies based in the UAE, including Careem and Derq, which uses AI and analytics to help improve road safety.