Abu Dhabi’s entrepreneurial landscape is experiencing an unparalleled surge in innovation and growth, with Hub71 leading the charge as a beacon for startups and tech advancements.
Riding the waves of growth momentum, Hub71 has launched a new platform dedicated to increasing capital investment in technology companies, including startups, from the region’s leading family offices. ‘Tech Barza’ – meaning majlis – is an exclusive capital club that targets regional family offices for exclusive access to Hub71’s vibrant community of almost 200 startups to accelerate deal flow.
“Tech Barza is our family office initiative. Our ambition here is to engage family offices closely, making them aware of the region’s technology and venture capital opportunities,” explained Ahmad Ali Alwan, the Deputy CEO of Hub71. “It’s a two-fold opportunity: for family businesses to bolster their focus areas and for startups to connect with potential clients and investors.”
Tech Barza has already garnered engagement from around 50 exclusive family offices, Alwan told Finance Middle East in an exclusive interview.
The family offices invited to join the exclusive capital club will benefit from access to a suite of offerings, including pitch days, joining investor networks, invitations to events and business forums led by Hub71’s strategic partner Mubadala Investment Company, in addition to set up support within ADGM, and access to Hub71’s programs and VC partners.
Startup funding in 2021 reached unprecedented levels in the MENA region, at $2.6 billion, a 138% increase compared to 2020. Globally, there is a steady rise in family offices investing in startup ventures. In 2021, 5% of all worldwide venture transactions included family offices — more than double a decade ago.
Tech Barza aims to facilitate access for technology companies and startups to connect with strategic investors with sizeable portfolios with companies that could accelerate product-market fit and the ability to go to market.
Hub71’s success story
Since Hub71’s launch in 2019, the global tech ecosystem has led Dh3.2 billion in funding for its startup community. Through its capital community of more than 20 VC and venture debt funds, startups at Hub71 are securing investment to grow sustainable ventures with the impact of the UAE’s capital.
Reflecting on Hub71’s achievements, Alwan expressed pride in the community’s evolution. “Since our inception, we’ve cultivated a vibrant community of over 260 startups, generating over 1,000 jobs and accumulating more than Dh5 billion in funds, resulting in Dh3.5 billion in revenue.”
“Our success lies in witnessing these startups grow and flourish,” Alwan remarked, envisioning a future where these companies evolve into globally influential tech entities. He credited Hub71’s support and access as pivotal in facilitating the startups’ journey.
Looking ahead to 2024, Alwan outlined Hub71’s strategic focus on technology, aiming to complement their entrepreneurial efforts. “We have been the cornerstone for entrepreneurs, offering essential community support. As we move forward, we will emphasise technology domains like FinTech, AI, and ClimateTech, among others, to create compelling value propositions that attract startups to Abu Dhabi,” he explained.
Addressing the challenges faced by startups, Alwan noted the global fluctuations impacting valuations and investor behaviour. “I wouldn’t say capital has dried up per se, but really, investors are reconsidering how they enter the business,” said Alwan.
He explained that the companies will have to focus on efforts to prove that they have value propositions and business models that can sustain this cyclicality in funding.
“While capital remains available, investors are reassessing their entry strategies. Startups must pivot towards sustainable business models, focusing on growth and revenue diversification within existing verticals of their respective business lines.”
Company building program
According to Alwan, Hub71’s Company Building Program has been pivotal in assisting startups. Initially introduced as an incentive program in 2019, it has expanded to offer a spectrum of services, including strategy support, marketing, and performance, engaging over 45 vetted service providers. On October 16, 2023, the global tech ecosystem announced its revamped incentive program – the Company Building Program, introducing a cash-for-equity model aligning Hub71’s journey with that of the startups.
Startups joining the revamped incentive program will receive up to Dh250,000 worth of in-kind incentives in the form of support services and Dh250,000 in cash for equity, assisting founders in accessing readily available capital. For the first time, Hub71 will gain an ownership interest in startups selected to join its Company Building Program.
Elucidating the startup selection criteria, Alwan stressed the importance of resilient business models, proven revenue generation, and sector-specific focus areas like FinTech, HealthTech, and ClimateTech. However, he highlighted the significance of visionary, community-oriented founders with a global outlook, a crucial factor in their evaluation process.
Upon completion of the one-year Company Building Program, top-performing startups selected by Hub71 can receive up to an additional Dh250,000 cash incentive in exchange for additional equity.
Founders can access cash upon onboarding to fund the growth of their businesses without having to undergo a funding round. When the startup proceeds with a formal funding round, Hub71 will exercise its right under the Simple Agreement for Future Equity (SAFE) to take an equity interest in the startup.
When discussing the incentive, Alwan emphasised the value proposition beyond material benefits. “Our focus isn’t just on incentives; it’s about fostering a supportive ecosystem in Abu Dhabi. Through community building, access to investors, corporate partners, and progressive regulators, we aim to empower startups to actualise their technological visions.”
As Hub71 continues to be a driving force in Abu Dhabi’s tech landscape, Alwan reiterated their commitment to fostering innovation, supporting startups, and building a technology-centric future for the region.
