Start-ups at Hub71, Abu Dhabi's global technology system, have raised nearly Dh4.5 billion ($1.22 billion) in funding globally until the end of 2022, as its company and investor bases continued to grow, its deputy chief executive has said.
The figure, which is up more than 40 per cent from the Dh3.2 billion that was raised until the third quarter of 2022, also helped start-ups generate Dh3 billion in revenue at the end of last year, up 20 per cent from the end of the third quarter, Ahmad Alwan told The National in an interview.
Hub71 more than doubled its start-up numbers to over 200 last year, securing 41 deals with corporate partners worth Dh160 million, Mr Alwan said.
More than 900 jobs have been created since Hub71's inception, he added.
“We believe that we are on the map when it comes to the technology landscape. There are a lot of initiatives that exist within Abu Dhabi and the wider UAE that we can further build on to continue positioning and amplifying Abu Dhabi as a global technology hub and ecosystem," Mr Alwan said ahead of Hub71's Impact event, which was held in Abu Dhabi earlier this week.
“The ultimate objective is to build and develop tech companies out of Abu Dhabi. Our target is to continue to grow our funding figures and to see start-ups that are able to raise a significant amount of funding,” he said.
“The way we do that is we continue to liaise with our investor partners that are seriously and actively exploring the opportunity within the Hub71 and Abu Dhabi start-up ecosystem and channelling that.”
Hub71's role is part of a broader strategy by the UAE government to promote entrepreneurship across all sectors. The Emirates aims to become “the entrepreneurial nation by 2031", according to the Ministry of Economy.
The country also aims to be home to 20 unicorns — or start-ups with a valuation of $1 billion and above — by then, Minister of Economy Abdulla bin Touq said during the launch of the Entrepreneurial Nation 2.0 programme last October.
Worldwide start-ups are booming as they take on the challenges of developing solutions for a world that is becoming increasingly digital in key sectors such as retail, services and commerce.
The value created by start-ups globally is about $3 trillion, which is almost on par with the gross domestic product of a G7 economy, according to advisory company Startup Genome.
Funding for these companies set a record in 2021 when it hit $621 billion, according to CB Insights.
In December, Hub71 announced that its start-ups had collectively raised $1 billion.
“We brought in investor, corporate, talent, government and regulatory partners, all to contribute to building an ecosystem that helps start-ups grow,” Mr Alwan said.
Hub71's start-ups currently cater to more than 20 industries, according to its website.
Among the sectors it plans to focus on further are financial technology and its digital asset subsets, health, education, transport, logistics, travel climate and food, he said.
There are a lot of initiatives that exist within Abu Dhabi and the wider UAE that we can further build on to continue positioning and amplifying Abu Dhabi as a global technology hub and ecosystem
Ahmad Alwan,
deputy chief executive of Hub71
The development of the digital asset space is to be reinforced with emerging technologies, including artificial intelligence and blockchain, Mr Alwan said.
“We have planned to create specialised ecosystems. We started off with digital assets, but on our trajectory is to build specialised ecosystems around each of these subsectors,” he added.
“We have identified this in line with the government's objectives … we continue to see the importance of these to help accelerate the adoption of technology and support the growth of this space.”
Abu Dhabi is the “driving force” behind the growth of several start-ups that are “pushing the boundaries”, said Badr Al Olama, acting chief executive of Hub71.
“Abu Dhabi has arrived at the intersection of transformation and innovation … we are now solidifying the impact we generate on a global scale by doubling down on breakthrough technologies that are poised to make game-changing impact,” he said.
Sleep Well Beast
The National
4AD
The Rub of Time: Bellow, Nabokov, Hitchens, Travolta, Trump and Other Pieces 1986-2016
Martin Amis,
Jonathan Cape
'The Batman'
Stars:Robert Pattinson
Director:Matt Reeves
Rating: 5/5
The End of Loneliness
Benedict Wells
Translated from the German by Charlotte Collins
Sceptre
How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
What drives subscription retailing?
Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.
The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.
The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.
The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.
UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.
That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.
Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
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Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
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MATCH INFO
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More coverage from the Future Forum
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The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
