Funding for start-ups at Abu Dhabi's Hub71 hits $871m as investor appeal grows

Start-ups at Hub71, Abu Dhabi's global technology ecosystem, have raised more than Dh3.2 billion ($871 million) in funding, generated Dh2.5bn in revenue and created 800 direct jobs since its inception in 2019 through to the third quarter of 2022. The growth for Hub71 member companies — close to 200 now — comes as investor interest increases in start-ups, making the entity a key contributor to Abu Dhabi's economy , Hub71 deputy chief executive Ahmad Alwan told The National in an interview at Gitex Global in Dubai on Thursday. In the first half of 2022, Hub71's start-ups were able to raise $436m, reinforcing their appeal to investors. There was a resurgence in investor interest at Hub71 after the effects of the Covid-19 pandemic wore off. The momentum has been helping its ecosystem and partner network to support Abu Dhabi to “increasingly position itself to be one of the global epicentres of technology”, said Mr Alwan, who assumed his role at Hub71 earlier this month . “After the pandemic, there was a huge thirst to get out there to engage with partners to identify opportunities, and that momentum continues to this day. It shows the vibrancy of the start-up industry in Abu Dhabi,” he said. “Beyond the numbers, we want to build globally enduring technology companies. Abu Dhabi has invested in a lot of initiatives that contribute to the technology ecosystem, with the natural competitive advantages it has.” Abu Dhabi continues to tap into the potential of start-ups, which have grown exponentially as entrepreneurs use innovation to address consumer needs. They are also increasingly seeking funding from global investors to hasten their development. Hub71's role is part of a broader agenda by the UAE government that promotes entrepreneurship across all sectors. The nation aims to become “ the entrepreneurial nation by 2031 ", according to the Ministry of Economy. It also aims to be home to 20 unicorns — or start-ups with a valuation of $1bn and above — by then, double than initially planned, Minister of Economy Abdulla bin Touq said during the launch of the updated Entrepreneurial Nation 2.0 programme at Gitex Global on Thursday. Start-up ecosystems worldwide are consistently growing as they take on the challenges of developing solutions for a world that is becoming increasingly digital in key sectors such as retail, services, e-commerce and governments. Globally, the value created by start-ups is about $3 trillion, which is almost at par with the gross domestic product of a G7 economy, according to advisory firm Startup Genome. Funding for these companies broke records in 2021 when it hit $621bn, according to CB Insights. Mr Alwan said Hub71 has a number of initiatives in the pipeline that are being planned with its partners, without elaborating further. “We like the element of us making an announcement that is substantial and significant. Once we have a material partnership, that is when we will discuss it more openly,” he said. Hub71's partners include venture capital companies and wealth funds who are “ready to deploy capital”. It is also waiting for the time when one of its members will become a global technology company — “graduating from the Abu Dhabi journey”, Mr Alwan said. “What we aspire is to celebrate is that first amazing success story,” he said. Hub71 is open to expanding on its “bilateral relationships” with partners in different countries, Mr Alwan said. At the moment, the ecosystem is focused on helping to develop its member companies by taking advantage of its existing partnerships. Among the sectors Hub71 will continue to develop are finance, education, health, clean technology, mobility, logistics and travel, Mr Alwan said. "Hub71 has been traditionally sector-agnostic but has rapidly evolved to have a diversified portfolio," he said. “These are the sectors wherein we saw a significant amount of our start-ups naturally started, but we also identified where the efforts of our partners are being poured into. “All sub-sectors within technology have the opportunity to be disruptive. Disruption isn't only in the sense that you are proposing a new idea — you are also addressing an existing problem in a novel way,” he added. Separately, Hub71 said on Thursday it has partnered with Nigeria-based start-up marketplace GetFundedAfrica to help companies benefit from cross-border expansion. Start-ups from both sides will be able to access potential customers, investor funds and expertise to help grow their footprint under the partnership. The move "brings new opportunities in untapped markets that are at the advent of technological transformation", said Badr Al Olama, acting chief executive of Hub71. Hub71, which is backed by the Abu Dhabi government and Mubadala Investment Company, has continuously unveiled initiatives to support the development of start-ups. In August, it welcomed 16 new start-ups to its platform, having set up its annual Outliers programme in the month before that. It joined forces with Siemens Energy in September to support Abu Dhabi start-ups addressing climate change issues.

Funding for start-ups at Abu Dhabi's Hub71 hits $871m as investor appeal grows

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