Dubai's Tecom Group, the owner and operator of 11 investment free zones in the emirate, expects to secure Dh200 million in funding for the participants of its start-up incubator in5 this year - almost equaling the amount raised over the last six years through the end of 2018.
"This year is going very well ... considering the so-far performance of in5 in the first half of 2019 [and] we expect Dh200m in funding [for start-ups] by the end of this year," Ammar Al Malik, managing director of Dubai Internet City, one of the investment zones under the remit of Tecom, told The National.
“The raised capital will be used to help entrepreneurs in setting up their businesses and in funding training programmes, mentorship and providing new networking opportunities,” he said, without specifying the amount of capital attracted by in5 in the first half of this year.
In5 is a platform for entrepreneurs and start-ups within the DIC ecosystem and its investors include leading venture capitalists, private funds and large- and medium-sized enterprises, Mr Malik said, declining to name investors.
Launched by Tecom, a unit of investment conglomerate Dubai Holding, in 2013, in5 has so far secured about Dh200m in total funding for the start-ups in the programme. Currently, more than 100 mentors and investors are associated with in5 under three different incubators focused on technology, design and media.
So far, over 230 start-ups have gone through in5 and nearly 200 start-ups are currently part of its community, with an average of seven new start-ups joining every month, according to DIC.
Start-ups coming out of in5 include Arabic social media monitoring platform Crowd Analyzer, money remittance firm Remiter and Wrapupp, an AI-driven app that was acquired by Silicon Valley-based firm Voicera.
“Through the in5 platform, investors are grooming and mentoring regional start-ups and helping them to scale-up their business,” Mr Malik said. “Right from improving the business idea to reaching the right investors and markets, in5 has proved successful in all its initiatives.”
In May, Tecom signed a pact with Dubai Future Foundation and Dubai Development Authority to accelerate the growth of creative start-ups. Dubai Future Foundation will introduce start-ups to in5, which in turn will provide them with simplified business set-up services.
“In5 is significantly adding to the overall technology ecosystem of DIC … and helping start-ups to access not only regional but also global resources,” said Mr Malik, adding more exits would be good for the future of the start-up community.
The UAE, the Arabian Gulf’s second-largest economy, is leading the charge on that front, accounting for nearly 40 per cent of the Middle East and North Africa region’s exits, according to a Google-commissioned report.
“It is necessary to have the culture of exits in our community… it will give start-ups global recognition. Successful examples of Careem and Souk.com are before everyone,” said Mr Malik.
“We need to see more success stories and more cash coming to the ecosystem,” he added.
Souq’s acquisition by Amazon in 2017 for nearly $600m (Dh 2.2 billion) was then the record for the region. It was followed by deals like Emaar Mall paying $151m for a 51 per cent stake in e-commerce company Namshi in 2017 (it purchased the remaining stake last year) and its acquisition of JadoPado for an undisclosed amount also in 2017. This year, Uber acquired Dubai's Careem for $3.1bn.
Promoting start-ups and helping them go through initial stages of growth is among the top priorities of the UAE. There are several initiatives and incubators at the federal and emirate level to help in the development of companies, especially in financial technology, media, government services and e-commerce.
On the growth plans of DIC itself, Mr Malik said over 60 per cent more tech jobs will be added in the free zone in the next five years.
“With the completion of our Innovation Hub [expected in 2024], we will raise our technology talent headcount from 24,000 to 40,000. It will include professionals, entrepreneurs and freelancers working across DIC,” said Mr Malik.
The first phase of the 1.8 million square-foot innovation hub was completed in October last year.
