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UAE’s early stage start-ups get boost with new funding, mentoring

Dubai-based Fincasa and IMT Business School ink agreement to mentor and fund the country’s budding entrepreneurs

“In the past three years, I have seen UAE’s start-up funding scene growing significantly in terms of the size of start-ups and the number of companies we see in the market”

— Varis Sayed

Investment in initial-stage start-ups is on the rise across the UAE as government-led initiatives supporting the start-up ecosystem lead to more interest in this space.

Fincasa, a Dubai-based investment advisory, is the latest organisation to tap into this market by signing an agreement with UAE’s IMT Business School to help fund its students’ business ideas and mentor them as they launch their businesses.

The agreement, signed mid-May, will create a joint venture between Fincasa and IMT Business School where students’ start-up ideas are developed to a level where they are executable, explained Varis Sayed, CEO of Fincasa.

At that point, the participating start-ups are shortlisted and the selected ones – which have “an execution plan and a compelling story” – are funded for their early stage development by Fincasa, Sayed said.

“Recent history has shown us there are plenty of capable young talents in the country; they just need the right platform and guidance and we come at that stage to deliver this,” said Sayed.

The UAE’s fast-growing start-up ecosystem is what encouraged Fincasa, which had invested only in traditional stocks and funds as “the start-up ecosystem was very niche at the time, seven years ago,” to invest in start-ups explained Sayed.

“In the past three years, I have seen UAE’s start-up funding scene growing significantly in terms of the size of start-ups and the number of companies we see in the market,” said Sayed.

“There is great support for start-ups from a lot of government initiatives and new angel investors and VCs have come in with a lot of money. The entire ecosystem is getting bigger and broader and we have seen some success stories, such as Careem, come out of it,” he added.

Close to $1.03 billion were invested into MENA-based start-ups in 2020, a 13 percent increase from 2019, with UAE securing a 56 percent share of all capital deployed regionally, according to start-up data platform MAGNiTT.

While the region’s start-ups typically relied on funding from friends and family to get their ideas off the ground, Sayed said the number and awareness level of angel investors is on the rise, making it easier for entrepreneurs to approach them for funding.

“This is to do with the government initiatives which have created an awareness among investors regarding opportunities in start-ups. Take for example crowd funding: It did not exist in this region for a long time and a lot of entrepreneurs were struggling as they would have to launch their company abroad and do the crowdfunding from there,” explained Sayed.

In mid-May, Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum launched ‘Dubai Next’, a digital platform that allows ambitious youth and innovators to secure the required funding to launch their projects.

The initiative will encourage the use of crowdfunding to finance a new business venture, a statement said.

“But now we have crowdfunding here which is good for the economy and the entrepreneur alike. We also have the remote working and digital nomad visas which will encourage a lot of entrepreneurs to come work from this region,” he continued.

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