Abu Dhabi's Masdar City and the Mohammed bin Rashid Innovation Fund are teaming up to support local start-ups and boost entrepreneurship in the UAE as the country seeks to be a centre for small and medium businesses.
The agreement will allow the entities to extend development to start-ups from the post-conception stage and also assist them in scaling up their operations, Masdar City and MBRIF said on Monday.
As part of the initiative, the MBRIF Guarantee Scheme and Innovation Accelerator will support Masdar City’s SME development efforts while both organisations will also be able to use each other’s human expertise, infrastructure and technology where necessary.
“It is our aim to not only cultivate entrepreneurship and economic development in the UAE and further afield but drive it and further it through the immense talent emerging from the region," said Abdulla Balalaa, executive director of Masdar City.
The UAE aims to become home to 20 start-ups valued at more than $1 billion by 2031 in its push to become a regional centre for innovation and entrepreneurship.
Last year, the country launched The Entrepreneurial Nation initiative, which aims to offer support through a series of public-private partnerships that help entrepreneurs to set up operations in the UAE, expand their businesses, export their products and tap into online sales.
The UAE will also set up a Dh1bn ($272 million) private equity fund for lending to SMEs based in the country and operating in strategic sectors. The money will be released from the first quarter of this year and over the next five years, said Minister of State for Entrepreneurship and SMEs Ahmad Al Falasi.
MBRIF, an initiative set up by the UAE Ministry of Finance, unveiled the Guarantee Scheme in 2016 to finance entrepreneurs. It provides a government guarantee as a security to commercial banks and financial institutions to encourage the issuance of loans.
If an entrepreneur defaults on a loan, the ministry intervenes to pay off the outstanding debt. The Innovation Accelerator programme, set up in 2018, provides non-financial support through access to an ecosystem of coaches and industry experts.
"With this new collaboration, we jointly seek to help local, regional and global businesses by giving them greater access to resources, funding and mentorship in order to succeed in the UAE through our unique platform," said MBRIF head Shaker Zainal.
Masdar City currently hosts 1,000 businesses including the International Renewable Energy Agency, the UAE Space Agency, Siemens, G42 Healthcare and the Mohamed bin Zayed University of Artificial Intelligence.
Earlier this month, it also signed a preliminary agreement with Emirates Development Bank to support businesses registered in its free zone and help them with their banking needs.
As part of the agreement, Masdar City will encourage SMEs and large businesses to do their banking through EDB’s app and open an account. Meanwhile, EDB will offer priority banking for Masdar City customers and give them easy access to finance.
Abu Dhabi has been investing in start-ups to expand the innovation ecosystem in the capital as part of a broader economic diversification strategy.
It set up Hub71, an international ecosystem, to support start-ups in 2019 and also launched other programmes, including a Dh535m Ventures Fund in 2019 to encourage entrepreneurship and innovation.