Abu Dhabi starts Dh535m fund to support start-ups and venture capitalists

Ghadan Ventures Fund is part of Abu Dhabi's new tech hub and Ghadan 21 stimulus programme

Abu Dhabi, United Arab Emirates - Elham Al Qasim, Acting CEO of Abu Dhabi Investment Office speaks at the launch of Hub71 at Rosewood Hotel, Al Maryah Island. Khushnum Bhandari for The National
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Abu Dhabi has committed Dh535 million for a new fund to invest in start-ups as part of the government's Ghadan 21 programme to diversify the economy, attract investors and build a tech hub in the capital.

The Ghadan Ventures Fund, managed by state-run Abu Dhabi Investment Office (Adio), has two programmes to boost venture capital available to Abu Dhabi-based start-ups and attract new fund managers to operate in the emirate, Adio said in a statement on Tuesday.

"We are helping new venture capitalists establish in Abu Dhabi to ensure local start-ups have access to more investors, whilst also driving the establishment and growth of start-ups in Abu Dhabi by increasing the amount of investment capital available in the market," Elham AlQasim, chief executive of Adio and executive director of Ghadan 21 programme, said.

The fund was first announced in March during the launch of a dedicated tech hub in Abu Dhabi, dubbed Hub 71, that is backed by the Ghadan 21 economic stimulus programme.

The oil-rich emirate rolled out Ghadan 21 last September, a Dh50 billion stimulus package to accelerate economic growth and non-oil revenues, of which Dh1bn is allocated to Hub71. Part of that is Dh535 for the Ghadan Ventures Fund, which aims to attract 100 companies over the next three to five years. The hub will offer cost-of-living subsidies to start-ups that open for business there as part of its Dh1 bn commitment.

Under the new Ghadan Ventures Fund,  the Start-Up Matching Fund will increase capital available for seed and early-stage companies. Adio will match a start-up’s lead venture capital investment dirham for dirham, up to Dh10m for seed rounds and  Dh50m for a Series A round.

Under the New Managers Fund, new Abu Dhabi-based VCs can apply for fund matching, based on the amount they raise in the private market.

"“Entrepreneurialism will be a key driver of Abu Dhabi’s economy and we are working to further enable local entrepreneurial talent, attract global entrepreneurs and build a thriving integrated start-up ecosystem," Ms AlQasim said.

Mahmoud Adi, the the head of Hub71, said the timing is right for start-ups and investors to come to the region given the 31 per cent increase in total funding and a 13 per cent increase in the number of deals made in 2018, compared with the year before.

"There are great start-ups to be found right here in Abu Dhabi," Mr Adi said. "There’s never been a better time in this region for both startup and investor ... There is great potential for the fund, and we will be supporting members of Hub71 to apply and make the most of this unique opportunity.”