2023 looks bright for Abu Dhabi startups

The pandemic has put unprecedented pressure on startups around the world, but 2023 is expected to be bright for small businesses, especially climate technology startups in the United Arab Emirates (UAE).

“The time seems ripe for the Middle East and North Africa to [Middle East and North Africa] Climate tech startups are booming,” wrote senior market research analyst Samuel Wendel. monitor, in a recent article. “After COP27 in Egypt, climate issues are gaining traction, and the upcoming COP28 in the UAE should drive this momentum.”

Small and medium enterprises (SMEs) are the foundation of the global economy. According to the World Trade Organization, they account for more than 90% of global businesses, employ 60-70% of the population, and account for 55% of the GDP of advanced economies. The World Bank reports that 50% of the world’s population is employed by SMEs.

As climate change accelerates, start-ups and SMEs will become even more important as they provide solutions for transitioning to green energy, offsetting emissions and developing the clean technologies that power smart cities.

While the world increasingly relies on start-ups, they continue to face several challenges, including accessing mentorship, recruiting top talent, and navigating the legal and regulatory environment.

Perhaps the most pressing challenge for many start-ups is securing funding, with at least one U.S.-based accelerator, Y Combinator, warning that the venture capital (VC) startups need to grow will dry up Due to rising interest rates and slowing economic growth.

Startup Funding in the UAE

in the United Arab Emirates, 95% of enterprises are SMEs, 5% above the global average. SMEs also account for 86% of the country’s private sector workforce. Additionally, the UAE has ambitious plans to incubate 20 “unicorns,” or private companies worth more than $1 billion, by 2031.

In the UAE, startups are finding it easier to secure funding, with startup data firm MAGNiTT reporting that the Middle East and North Africa region will record $2.6 billion in venture capital funding in 2021 — the highest level ever recorded in the region. According to the same report, over the past five years, $484 million has been allocated to sustainable development solutions in the Middle East and North Africa region. UAE start-ups were the largest recipients, attracting $373 million across 29 deals.

However, a survey by Mastercard found that 60% of SMEs in the UAE are still struggling even with record financing levels, with 38% citing the need for easier access to capital and 61% citing the cost of doing business constant increase.

A support system is key

For young companies, finding the right support ecosystem is critical.Abu Dhabi, that is Home to more than 500 start-upsproviding support and financing to help businesses thrive.

“The UAE’s guidance for startups is unparalleled,” writes Ryaan Sharif in a column titled “5 Trends That Will Shape the MENA Startup Ecosystem in 2023” arabian business“The support functions here steer business leaders to the right trends, the right contacts and the right projects.”

Startup accelerators: “catalysts” for growth

Much of the support comes in the form of start-up accelerator programs such as The Catalyst, a joint venture between BP and Abu Dhabi’s Masdar City to support start-ups looking to change the world through cleantech and artificial intelligence.

“At The Catalyst, we firmly believe that the key to solving our most pressing environmental challenges lies in innovation and technology,” said Suleiman Ali Amin, Acting Managing Director. “We are in a unique position to support cleantech start-ups so they can bring their solutions to market and create a more sustainable future for us all.”

The Catalyst provides guidance in business development and strategic planning, office and manufacturing space, an extensive shareholder network, up to $250,000 in venture capital, and legal affairs, human resources, marketing and public relations support.

Ideal candidates for entry are seed-stage startups that are nearing commercialization or have a commercial product. The program’s current startups are working on upcycling food waste into animal feed, smart battery management, e-logistics, sustainable skincare and other projects.

“Catalyst is at the heart of Masdar City’s entrepreneurial ecosystem,” added Amin. An example of this is the program’s rich network of entities that can help start-ups grow.

Recognizing the critical role startups play in the economy and in tackling some of the world’s greatest challenges, The Catalyst and the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) recently signed an agreement to accelerate the development of artificial intelligence (AI) , cleantech and smart city technologies, including autonomous transportation throughout the region.

Sultan Al Hajji said: “One of the most critical predictors of a successful startup is access to industry talent, and the collaboration between The Catalyst, Masdar City and MBZUAI has created a platform to attract and retain some of the leading authorities in AI people to Abu Dhabi.”, Vice President, Public Affairs and Alumni Relations, MBZUAI.

“This agreement will allow us to gain access to even more top talent and provide entrepreneurs with greater opportunities to develop breakthrough technologies. We look forward to working together,” said Steve Severan, Development Director at Masdar City S said.

Other ecosystem links include a recent deal between Masdar City and Hub71, another Abu Dhabi startup accelerator, that will boost cleantech and AI startups in areas such as transport, food, health and climate action. opportunities for collaboration.

Another agreement between Masdar City and Amazon Web Services (AWS) at COP27 is paving the way for an international exchange sprint as part of the AWS Clean Energy Accelerator 3.0. The partnership will bring the International Exchange Sprint to Masdar City during COP28 in the UAE at the end of 2023. Selected startups will receive technical, business and go-to-market guidance from AWS and credits of up to $50,000 each to kick-start their data and operations transformation through Amazon Web Services Activate.

To learn more about what’s happening at Masdar City, or how it can support your start-up, download the free white paper here.