The Mohammed Bin Rashid Innovation Fund is inviting applications from start-ups around the world and will select up to 25 local and international companies for its first accelerator programme to boost innovation in the UAE.
The accelerator is open to online applications until February 7 and the company finalists will be announced by April 7, Alex Collins, the managing director of Innovation Accelerator, said on Monday. He said the programme expects to receive at least 10 times the applications than the number of companies the fund plans to accept in the first year.
“That will be the first group of companies and we expect them to be between 20 to 25 in the first year,” said Mr Collins. “It can be more start-ups if the companies are amazing, but this is our ambition and we don’t want to take less than that [number in the programme].”
Like other countries in the Middle East and North Africa, the UAE - the second-biggest Arab economy - aims to widen the contribution of start-ups and small to medium enterprises to its gross domestic product as it seeks to diversify its revenue streams and cut dependence on oil proceeds to fuel the economy.
Several initiatives at the state level and those from two of the country's financial hubs – Dubai International Financial Centre and Abu Dhabi Global Markets – in financial technology are running concurrently to develop and nurture start-ups. The nascent FinTech sector in MEA is set to capture 8 per cent of financial services revenue in the region by 2022.
With a total of $67 million (Dh246.1m) in FinTech venture capital funding, the UAE has been the top investment destination in the region since 2010. But of the $50 billion that has been invested in FinTech companies globally since 2010, only 1 per cent was directed to MEA, according to a report by Accenture and DIFC’s start-up accelerator, FinTech Hive.
A consortium of four Abu Dhabi organisations including the Department of Culture and Tourism and Etihad Aviation Group in February partnered with venture capital company Wamda Capital to launch an accelerator programme for travel and tourism-focused start-ups.
However, the Dh2bn Mohammed Bin Rashid Innovation Fund is focused on innovations in seven key areas of the UAE economy including space, water, technology, education, health and renewable energy. The fund, launched in 2015 and operated by Emirates Development Bank, acts on behalf of the UAE government to provide a guarantee as security to a financier, an incentive to encourage the issuance of a loan and to reduce collateral required from the businesses.
“The launch is all about bringing practical services to help businesses move to the next stage of growth, focused on stimulating UAE economy, Mr Collins said. “What we are doing in the launch is a broad campaign for all seven sector to see where the most demand is and where the most innovation is coming from.”
The accelerator, part of the UAE National Innovation Strategy, was launched by Sheikh Hamdan bin Rashid, Deputy Ruler of Dubai and Minister of Finance, who said the programme offers an opportunity to build a nation-wide culture of innovation aimed at attracting the best talent and ultimately creating a tangible positive affect on the UAE's economy.
The first priority of the programme is to target businesses in the UAE to help them expand to international markets. The second objective is to identify innovations not yet present in the Middle East and bring those innovators to the Emirates.
“The accelerator will prepare them for the right strategy, getting them access to the right funding sources, making them pitch-ready,” Mr Collins said.