United Arab Emirates earmarks $270m to support tech startups
US tech giant Microsoft will be a strategic partner, providing technology and cloud services to the businesses that join the hub
Abu Dhabi — Abu Dhabi will commit up to$272m to support technology startups, it said on Sunday, in a dedicated hub as part of efforts to diversify its economy.
US tech giant Microsoft will be a strategic partner, providing technology and cloud services to the businesses that join the hub as the capital of the United Arab Emirates continues its push to reduce reliance on oil revenue.
Abu Dhabi derives about 50% of its real gross domestic product and about 90% of central government revenue from the hydrocarbon sector, according to ratings agency S&P.
The emirate launched a $13.6bn stimulus fund, Ghadan 21, in September last year to accelerate economic growth. Ghadan means tomorrow in Arabic.
The new initiative, named Hub 71, is linked to Ghadan and will also involve the launch of a 500m dirham fund to invest in startups, said Ibrahim Ajami, head of Mubadala Ventures, the technology arm of Mubadala Investment Co.
The goal is to have 100 companies over the next three to five years, Ajami said. “The market opportunities in this region are immense,” he added.
Mubadala, with assets of $225bn and a big investor in tech companies, will act as the driver of the hub, located in the emirate's financial district.
Softbank will be active in the hub and support the expansion of companies in which it has invested, Ajami said, adding that Mubadala is also aiming to attract Chinese and Indian companies, among others.
Mubadala, which has committed $1bn to the Softbank Vision Fund, plans to launch a $400m fund to invest in leading European technology companies.
Incentives mapped out by the government include housing, office space and health insurance as part of the 1bn dirham commitment, Ajami said.
Abu Dhabi will also announce a new research and development initiative on Monday linked to the Ghadan 21 plan, according to an invitation sent to journalists.