UAE initiatives to help booming sector – a key economic driver – attract more investors, capital
The UAE carefully weaves a progressive society, chooses dynamic new threads of innovation and blends them with their rich heritage, and this is where we would see a merger of family business offices and family businesses with the very powerful startup ecosystem of the nation, which builds its vision on a solid foundation where disruption and legacy will complement economic growth.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, introduced bold steps to empower budding entrepreneurs, while introducing business-friendly policies to strengthen the local community . The nation stands ready to welcome global talent to further stimulate growth and economic development.
Sheikh Mohammed said, âIn UAE, we are constantly working to improve our business model in innovative ways to achieve our key goals of attracting the brightest talents from all over the world, promoting advanced technologies and create a truly knowledge-based economy.
On June 28, Sheikh Mohammed launched an accelerator for family businesses that helps them access new markets.
The proposed platform, which aims to improve the performance of these entities, will help them enter new markets and build their brands.
The new accelerator also supports startup projects by improving their ability to attract investment opportunities, accelerate growth and strengthen their capacities and skills. Entities such as Skill-Up Academy and Scale-Up Platform have also been launched.
Gopa Kumar, managing director of business services provider Amicorp, says setting up a family business accelerator platform is a game-changer for the startup industry in the UAE.
There is strong evidence that accelerators and incubators play a key role in the growth of startups; an institutional framework supported by the government will go a long way in building credibility and trust among startups.
âIt is important to attract investors to provide capital and mentor these start-ups. UAE Based Ultra High Net Worth [individuals] and the family office community are not active in investing in startups; the new initiatives will be the tipping point to attract capital from these investors. Over the past decade, this class of investors in the United States, Europe, China and India has achieved significant wealth creation by investing in startups, while wealth preservation has been taken care of. through traditional investments. Investors can be proud to participate in the economic growth of the UAE over the next 50 years, âKumar added.
âThe United Arab Emirates attracted the largest amount of start-up capital in 2020 to the region. With the new initiatives, the UAE will become the leading technology and startup incubator that will spawn companies capable of playing in the larger MENA market. This will lead to a deeper and wider participation of global VCs [venture capitalists] and investors in the UAE startup sector. “
Last week, Mumzworld, the largest mother-to-child e-commerce platform in the Middle East, announced that it had signed a sale and purchase agreement with Saudi Arabian group Tamer for the proposed acquisition of a controlling stake in the first, a classic example. a start-up-family business office agreement.
âThe Covid-19 epidemic has accelerated digitization on a global scale, paving the way for the emergence of tech startups, and this has created vertical sectors that would enhance economic growth. The new initiatives offer a learning curve for everyone in an extremely competitive era, in a world without borders, âsaid Sultan Ali Rashed Lootah, President and CEO of Vault Investments.
âOur aim is to create an interconnected and diverse futuristic impact through projects in which we invest in leading sectors such as real estate, logistics, retail, technology and energy. Dubai‘s ability to create unicorns in startups makes it more attractive and compels family businesses to take an interest in it. Family businesses and family business offices in the region have started making attempts to diversify their investment portfolios by investing in new initiatives and startups.
Another initiative is Kaplan Professional Middle East’s Family Business Emerging Leader program, aimed at family business teams who recognize the need for skills to enhance their strategic business acumen and seek appropriate investment growth opportunities.
âWith the Mena region, particularly the United Arab Emirates, being a hub for startups and an attractive destination for foreign investors and entrepreneurs, there is a strong appetite from family businesses expressing interest in co-investing. in emerging startups in the region, in the technological space. The industry will only continue to grow after the pandemic as the global market becomes more dependent on digitization and e-commerce, âsaid Kaplan Managing Director Fiona McBride.
PwC’s latest family business survey clearly illustrates the extraordinary resilience and agility of family businesses in the Middle East. While many have been hit hard by the pandemic, they remain optimistic that growth will return in the months and years to come, and look to the future. Topping the list is diversification, with 58% planning to expand into new markets or customer segments, but digital capabilities will also be key to success going forward. While many family businesses have historically underinvested in digital, the pandemic has added a new urgency – nearly 75% – to say that digital, technology and innovation initiatives are a key priority.
âFamily businesses have been and will continue to be a driving force in the growth and development of the region’s economies with many family businesses in the Middle East aiming to invest in GCC startups that help them pave the way for sustainable business practices. Over the next few years, there will be a strong demand for family businesses investing in tech startups, especially in artificial intelligence, e-commerce, blockchain, smart apps, and the Internet of Things. As the region experiences a more robust recovery phase, there will also be an emerging interest in investing in startups focused on healthcare, education, energy and sustainability, âsaid McBride.
The 15th Global Family Office Investment Summit ended on July 2 at the Fairmont Monte Carlo hotel in Monaco and is said to have attracted over 300 family offices, private investors, sheikhs, royal families and large corporations from over 30 countries representing more than $ 4.5 trillion in wealth.
Sir Anthony Ritossa, President of the Ritossa Family Office, said: âThe importance of the United Arab Emirates as a world power is strong and will continue to grow in the years to come. This is largely due to the support of family offices and family businesses who see great potential for startups who choose to grow their business here. Examples of companies moving here include an impressive number of companies leading the way with sophisticated technology, artificial intelligence, biotechnology and medicine, solid waste solutions, safe and sustainable food, fintech, etc. Many of them are supported by ruling families.
Ritossa added, âAs a gateway for innovation, the UAE caters to the needs of budding startups, with impressive multinational design centers, high-tech startup hubs and strategic partnerships. Our current position as a global hub is in large part due to strong leaders, whose vision has led to the rise of Dubai. Today, international companies are interested in UAE due to the strong government support for SMEs. For example, Dubai’s Smart City 2021 initiative is transforming the city, revolutionizing the way government services are delivered, fostering partnerships with the private sector, increasing happiness and generating more interest in the region. Expo Dubai 2021 is another exciting milestone for the UAE, âsaid Ritossa. – [email protected]