Welcome to another episode of Economic Impact, conversations from Emirates Development Bank (EDB), the key financial engine for economic development and industrial advancement of the UAE. In each instalment CEO Ahmed Al Naqbi leads insightful discussions with change-makers and thought-leaders in the UAE to learn how they’re contributing to the nation’s economy and realising the UAE’s economic ambitions.
This is episode three in our second season and this time we’re joined by the chief executive officer of Abu Dhabi’s global tech ecosystem, Hub71.
Ahmad Ali Alwan was a founding member from its inception in 2019 and he now leads the development and implementation of Hub71’s technology strategy and long-term vision to elevate Abu Dhabi as a leading technology ecosystem globally.
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Speaker 1: HOST
Speaker 2: GUEST
00:00:00 INTRO V/O
“This is Economic Impact...Conversations from Emirates Development Bank”.
00:00:05 Speaker 1
A’salaam alaikum. Welcome to Economic Impact, with EDB. We have a great guest today. Mr. Ahmad Alwan, the CEO of HUB71. Welcome, Ahmad.
00:00:14 Speaker 2
Thank you, Ahmed.
00:00:15 Speaker 1
Great to have you. If I can start by asking you a bit about the history of Hub71, I'm always curious about, you know, different accelerators that are around the country. How was Hub71 set up, what was the initial thought process behind it and the objectives of it?
00:00:25 Speaker 2
Yeah. No, thank you, Ahmed. Firstly, very excited to be sitting here alongside you…
00:00:35 Speaker 1
Thank you.
00:00:36 Speaker 2
…and I should say very proud to be working also with EDB across your wonderful initiative. So I do see EDB alongside with Hub71 as important initiatives to invigorate different elements of the UAE's economy and the ecosystem, and Hub71. Particularly, we focus on the tech startup journey.
00:00:56 Speaker 2
And the conception of Hub71 came from the realization that Abu Dhabi, in particular, has a lot of great enablers that would support the growth and the scale of tech startups. So why not create a, an enabling body that would support that journey and that's what we started to do in 2019.
00:01:17 Speaker 2
On the back of the direction from the Department of Economic Development in Abu Dhabi…
00:01:23 Speaker 1
Right
00:01:24 Speaker 2
…supported and managed by Mubadala. The ambition, which is now a reality, was to create a, an enabling ecosystem that would support any startup to grow and scale out of Abu Dhabi. So what? We've launched our set of programs and initiatives that would support startups from ideation up to scale up and maturity and beyond that also work on partnerships that would support these startups with access to capital, access to market, access to talent and a great government and regulatory environment.
00:01:58 Speaker 2
And today we see the fruits of that labor, where we have more than 260 startups that are part of our ecosystem, more than 150 partnerships that are contributing across these different elements and a lot more value that is associated that's coming out from the Abu Dhabi and the UAE economy.
00:02:21 Speaker 1
That's fantastic. So this was set up in 2019 in order to develop that tech-ecosystem. So when we say the tech ecosystem is it is it, I'm assuming general. So any, any tech startup essentially can come to HUB71.
00:02:35 Speaker 2
Yes, that's a fantastic question. So historically, when we started Hub71, we were technology-agnostic and we did that. And remember having that discussion for a very clear reason is that we didn't want to crowd out any sector.
00:02:47 Speaker 2
That we didn't identify as a top through a top-down approach that could proliferate out of Abu Dhabi.
00:02:54 Speaker 2
So today, our startups represent more than 20 sectors and more, and our founders represent more than 50 nationalities.
00:03:01 Speaker 2
So, we're cooking.
00:03:01 Speaker 1
Could you name some of the interesting sectors, some of the ones that maybe some people would would not know that there are these companies being developed, fin-techs are kind of e-commerce are like the well-known ones, yes, but when you say 20 sectors, what sectors would you have a tech company come set up that is unknown?
00:03:15
So predominantly a lot of the sectors are matching a lot of the global trends because we see the enabling environment and Abu Dhabi supporting those. So, as you said, maybe fin-tech, edu-tech, health tech are ones that are more understandable people get why they're sell up here, but we have things like mobility, logistics and travel. Obviously, we have a few entities across Abu Dhabi and the E that supports that, those sectors, but predominantly it's, I'd say is something like mobility, districts and travel is associated with the fact that your eye is 80% of the world is within an eight hour flight from the UAE. I think one of my favorite, which now is a hot topic, but we actually and I think Sam Altman says that says this one he visited last year is that Abu Dhabi was investing in AI before it was cool.
00:04:18 Speaker 1
Right.
00:04:18 Speaker 2
Er, AI today is a very hot topic because we have a, an interface that touches people's lives through Chat GPT. But alms and different AI initiatives have been always foundational to Abu Dhabi. So a lot of companies already.
00:04:18
Right.
00:04:33 Speaker 2
Established their presence and a lot of AI companies have already established their presence in the sector.
00:04:41 Speaker 1
Very interesting. So, the assumption then from my side is, but please you know if you can elaborate on it, is that a big portion would be UAE national entrepreneurs coming to set up some kind of tech company out of Hub71, but it sounds like there's also a lot that come from different countries?
00:04:58
Erm, the majority are actually international.
00:05:00 Speaker 1
They are international…
00:05:02 Speaker 2
So yeah. So out of the startups we have, we have, we have around 15 Emirati entrepreneurs the rest are from different parts of the world…
00:05:12 Speaker 1
Anywhere in particular, is there any kind of hotbeds that are coming to Abu Dhabi?
00:05:14 Speaker 2
Yeah. So, it's predominantly from the MENA region.
00:05:17 Speaker 1
MENA region, OK.
00:05:18 Speaker 2
So, and maybe I'll explain how our application process works. So, basically it's an online application which starts up supply online. Last year, we've received around 3,000 applications only selected around 60 startups, which shows the interest that the companies have in selling up within our environment and Abu Dhabi’s ecosystem in general. So, the number one…
00:05:40 Speaker 1
And that's, that's a lot. Sorry to, to cut in, but that's a lot of applications, yeah, for a relatively small number that are accepted 3,000 to 60 is quite a high ratio. That's like Ivy League numbers, right, there, so…
00:05:51 Speaker 2
So that's actually part of our journey and maybe I'll get back to the other questions. So, part of our journey is that we're, we're thankful for the amount of attention we’re getting and the value that the,erm, technology. It's called the startup economy sees and what HUB71 has to offer. But the way I see it is also there is more value for us to extract. So, we are resource bound to a certain level. We can only you know work with a set number of companies in a given year. But the way I see it, if there are 3,000 applications, there's a good amount of them that actually want to come to Abu Dhabi and contribute…
00:06:26 Speaker 1
Why? Why do you think that is? Because that's a lot of applications for 60 spots. What do you think? Hub71 does or offers that that attracts them? And of course, I'm sure it's part of it is Abu Dhabi and the UAE as a whole, but what? What do you feel is the reason why, Ma’ashallah, and there's that that number of applications coming through?
00:06:42 Speaker 2
Erm, there's a, there's across the board, multiple elements that developed the Hub71 value proposition. I'll start from the macro side. The fact is that Abu Dhabi is a great destination when it comes from, you know, safety; security; connectivity.
00:07:03 Speaker 2
If I go a level beyond that, it's on the regulatory agility, I'd say. So, our chairman is the chairman of the Department of Economic Development in Abu Dhabi, His Excellency Ahmed Al Zaabi, who's also the chairman of the Abu Dhabi global market. There's a handful of places that you would find that type of support and attention. So, basically if we wanted support from a regulatory perspective, obviously we have to be constructive, but it is relatively a streamlined channel compared to other jurisdictions. We're a bit, might be a bit more complex…
00:07:36 Speaker 2
Beyond that Hub71 specifically, and I think this makes all the difference of how we operate, we're very much inspired and led by the community. We focus all our efforts on community building and what it what's the products, what are the offerings that would support these startups. We listened to them when we started. For example, our program, it used to be a full-fledged incentive program where we offer in kind incentives for three things only housing, health insurance and office space.
00:08:03 Speaker 1
OK.
00:08:03 Speaker 2
We listened to our companies what it is that you'd like to, to get more of what it is that we can support more with and we, within a span of one year/18 months, we've turned that or evolved it into a flexible incentive program where the startups would have a wallet of credit, a wallet basically that they can unlock for different services including housing, health insurance and office space. But more than forty others as well.
00:08:33 Speaker 2
But also we spent a lot more time developing our value creation function - as in our ability to unlock opportunities for these startups and that's more valuable for from any…obviously it has to translate into dirham about at some point, but it's very valuable for you on the ground within two weeks.
00:08:53 Speaker 2
EDB is a call away ADG is a call away, Mubadala is a call away, ADQ is a call away and everyone wants to work and gets close to the technology ecosystem and the startup economy. And that makes it that really kind of honed our value proposition.
00:09:07 Speaker 1
Fantastic. You know, I would, I would think that obviously quality of life as well and lobby is fantastic for a lot of these entrepreneurs and coming and establishing and setting up here and as you said, the, the potential that it leads to unlocking of certain benefits, incentives.
00:09:23 Speaker 1
What has been some major success stories over, I mean, 2019, now it's about five years that you guys have been operational. What would you say, you know, was one or two really, you know, success stories that that we could that we could highlight for people?
00:09:36 Speaker 2
Working with startups is like, I don't know being a teacher in school or like, it's very tough sometimes to kind of say…you have to love all the startups equally, that's all I'm saying and.
00:09:48 Speaker 1
Without mentioning names, maybe, maybe, maybe, maybe if you maybe if you mentioned the, the business type that really succeeded.
00:09:48 Speaker 2
No, no, no, I'm fine. No, no, by all means. No, I'm…
00:09:55 Speaker 1
They got a lot of capital financing or, or injected equity or something like those lines.
00:10:00 Speaker 2
No, but by but by all means, obviously all companies are at different stages of their own growth and development, but would be happy to, you know, talk about a couple of the companies such as, and I think, a company like Lamsa for example, that provides entertainment…
00:10:17 Speaker 2
And it's an entertainment platform for early childhood and special, er Lamsa has a special place with Hub71 because they've been with Hub71 from day one and they continue to be part of the ecosystem. Though they graduated [coughs], excuse me, from the program because they've been through thick and thin with the HUB71 and they continue to grow and scale and their platform is widely adopted. Credit to their founder Badr Ward. Er, there's a great story that around the Nymcard. Er, Nymcard, the founder, Amar, came to, met us back in 2019 where, you know, he was relocating from Lebanon, had a team of maybe five to 10 people, erm, also took a bet on Hub71, which was kind of newly established, grew his team today to more than 50 people and what they do is basically provide them payment card options for different providers. So, for example, they offer it to Galleria Mall today…
00:11:16 Speaker 2
Erm, and I think it's a more recent of a success story, but you know a company like Archireef that reconstruct coral reef through 3D printing had a lot of momentum within Abu Dhabi, has a facility in KEZAD, erm, working with ADQ, getting a lot of attention and maybe the last one I'll talk about is Air Carbon Exchange.
00:11:38 Speaker 2
Air Carbon is the first regulated carbon credit exchange that was set up in the Abu Dhabi Global Market, received investment from Mubadala and working with a multitude of entities and Abu Dhabi, and then the in the region and beyond. Now for air carbon, for example, some companies are relocating to be closest to air carbon because they do want to be part of the platform.
00:12:03 Speaker 2
We do want to celebrate ‘soonicorns’ or unicorns…
00:12:07 Speaker 1
Right.
00:12:07 Speaker 2
…‘Soonicorns’ are companies that are valued at $200 million or above, unicorns at a billion. We are on that path. But the key objective for us, because ultimately when we want to kind of show we're contributing to the economy of Abu Dhabi and the UAE, it is showcasing that these are companies that can grow out of this ecosystem to become globally enduring tech companies.
00:12:31 Speaker 1
Fantastic. Fantastic, one of the great things that we found at EDB was partners like Hub71, actually yield for us, a lot of good fintech partners that we could potentially work with on embedding in our platforms to provide those kinds of services to entrepreneurs. So, it's a, it's a nice kind of cyclical thing. They're entrepreneurs and we support them to be on our platform to then support other entrepreneurs and, and you know, kind of building out on these kinds of ecosystems that exist within Abu Dhabi and the rest of the UAE, we found that to be very, very helpful to have these kinds of incubators around, especially on the Fintech side because again, us being a bank.
00:13:10 Speaker 1
That being said, where do you think Hub71 should be focusing its energy and drive? I mean, you've recently been appointed their CEO. I'm sure you have a lot of plans on your mind, things that you want to get done. Erm, what are some of the challenges? I'm sure there's lots of challenges that you're probably trying to overcome or put solutions to but where would you ideally like to see Hub71 be maybe a year from now, three years from now? Five years from now? How do you, how do you foresee that happening?
00:13:41 Speaker 2
Yeah, it's a beautiful question because obviously this is one of the first things you kind of start ironing out in your head, especially if you're thinking about the organization and what's the direction that we want to evolve into. Erm, and it's all always about the mission that we'd like to or, or the value we'd like to unlock for Abu Dhabi and the UAE.
00:14:03 Speaker 2
Hub71 when I started, its focus was on the entrepreneur’s journey and how do we create an enabling environment that supports the founder through their journey, whatever it may be. And that's the type of culture that we have adopted that I'd say stems from the team onto the community - and community is a very important point, as I've mentioned before.
00:14:26 Speaker 2
Our upcoming stage is to focus on the technology journey. What would it take to support Abu Dhabi's drive to become a net technology exporter? Erm, what are the key elements?
00:14:39 Speaker 1
Interesting. Sorry, sorry to cut in right there, but, but I love that that statement, a ‘net technology exporter’. So, what you mean by that is technology that is developed here, but then utilized in other countries.
00:14:52 Speaker 2
Exactly. Other countries, as considered the bed of technology development.
00:14:59 Speaker 2
We see this day in, day out and how much Abu Dhabi has of value that can now be transformed into great companies, technology companies that can be eventually exported to other parts of the world. And I have no doubt that this is a, it's a matter of time, it is happening
00:15:21 Speaker 2
There we come in is now thinking across the entire technology journey and that starts with, you can argue with high schools, but definitely with the universities, right, IP commercialization, there's a lot of great IP that is in the country how do we kind of explore the different areas to support that commercialization once you set up the business well, how do you equip that company and to have every means to access the world Hub71’s focus isn't the way you alone, it is the region, it is the world. That's why we define ourselves to be a global tech eco-system our partners are from different parts of the world. Our startups are from different parts of the world and for us it's identifying the value and the right steps to take in order to position Hub71 as an enabling body that supports that mission of being a net technology exporter.
00:16:08 Speaker 1
OK.
00:16:09 Speaker 1
What are the challenges that you are facing? So, that's a, that's a fantastic objective. I mean I, I love it. I love you know us hopefully in shuttle getting to that point where we're actually exporting technology, not just importing it and using it here, but there must be several challenges…I can think of like IP rights as one I could think of, you know, the connectivity with distribution of other countries.
00:16:30 Speaker 1
But what? What have you guys identified as Hub71 and what are you looking at in order to kind of enable your ecosystem, erm, companies that are with Hub71?
00:16:42 Speaker 2
Yeah. Erm, we're very close to the community of start-ups as you can tell, so we do ask also, it's not only what we see, it's also what our companies. Yeah. And I think it's also sometimes when you ask the question, you will get as many answers as you, as you want. But I'm, I'll tell you the one that I think is, is key and tantamount and actually relatively nimble perhaps, or even solve.
00:17:06 Speaker 2
It's actually access to capital in this ecosystem. There's $1.3 trillion of assets under management in Abu Dhabi particularly, but most of it tends to be deployed internationally. Our key our key, I'd say a set of key initiatives that we focus on Hub71 is unlocking some of that capital or more of that capital to be invested into the companies that are set up here.
00:17:37 Speaker 2
It's firstly an educational journey where we are actually bringing up to speed our counterparts on the opportunity that exists today. And I, I would have to say that we made the thankfully good strides and that effort where we're seeing more capital being deployed here. Our startups raised around 5.4 billion dirhams as of 2023. We've been able to facilitate about 1/3 of that through our introductions. We'd like to do more, especially if our mission is to grant these companies to become of high valuations.
00:18:11 Speaker 2
There would be other obviously aspects that we would do and they tend to be, and these are things that we tend to be able to resolve relatively quickly. There are certain regulations we would need to kind of provide feedback for. Obviously, we do not play the role of the regulator, but we do use our channels in order to to channel hat feedback, as and when relevant.
00:18:32 Speaker 1
So, something happened that crosses my mind when you seek access to, to capital, whether it's local, whether it's international and like you rightly said, you know, the $1.3 trillion of assets under management deployed internationally mainly.
00:18:43 Speaker 1
A lot of it, in my humble opinion, comes down to perception and the perception that for some reason, fin-techs or tech companies that are developed here in the UAE, for whatever reason, that perception of, oh, they must not be as good as the, the tech companies that are being developed in Silicon Valley or the tech companies are being developed out of London.
00:19:04 Speaker 1
Or out of Berlin or other innovation hubs. Singapore is another fantastic innovation hub globally.
00:19:09 Speaker 1
So, that perception is a reality in the sense of how people perceive it. So what, what role can players like Hub71 play in order to potentially change that kind of perception in order to attract not just local investments, but potentially international investments? And what, what do you have to say to that perception?
00:19:32 Speaker 2
Rapidly changing the great thing about tech startups and their founders, they tend to be very mobile. They will go to the environment that best supports their startups. Having visited a number of jurisdictions globally, I can tell you there's nothing that Abu Dhabi has that wouldn't, er, get it on par with any of the other jurisdictions you mentioned. Now, there are places obviously like, you know, San Francisco, Silicon Valley, where within Silicon Valley basically if you're VC or a tech company, if for them if you’re set up there, if it doesn't exist within a 20 kilometer radius, it's not technology…
00:20:10 Speaker 1
They don't want to…
00:20:12 Speaker 2
So that's, but that's, a specific case, but other jurisdictions actually, yes, you'd have aspiring founders that you know have great products etcetera, but not nothing that I haven't come across or can be developed here. The difference is in the uptake as then you'd have more companies or an environment that is more ready to take on and deploy capital - either take on these deals or deploy capital in them. If you unlock these two elements, which we see the seeds of happening today. The growth is going to be exponential and very quickly.
00:20:52 Speaker 1
Fantastic. So, let's pretend that this is five years down the road. You obviously have a lot of big plans and shallow for the development of Hub71. Where do you want to see Hub71 in five years? If we were to wake up five years from now, how do you, how do you perceive that community being, how do you perceive the number of companies there? How do you perceive the, the offers of services? What do you have in your mind as a vision for five years from now?
00:21:20 Speaker 2
I, I do want to celebrate not only one, but a number of unicorns that came ,that would say like this came through, er, came for Abu Dhabi, came through the Hub71 programs and initiative and was able to unlock a lot of value from this network and I'd say this would be a, you know, the biggest thing we could celebrate as a team and for all the work we've done. But I'm honestly fulfilled.
00:21:49 Speaker 2
Every day, thankfully, Al Hamdulillah. It is something that I'm grateful every day to be able to work with the companies that are making a difference. VC, and venture capital gets to be synonymous with impact.
00:22:02 Speaker 2
And for me, it's actually maintaining that culture, maintaining that ethos of having impact, of working with people that are trying to make a difference. And I want to see that grow. I want to build that community. I want to keep building that culture with the team around us. We see it. We see it touched on people live and it's not something I wish we could quantify.
00:22:24 Speaker 2
Erm, er, but having that tight knit community where I will have your, because a founder’s life is very lonely life…
00:22:30
Of course, of course.
00:22:31 Speaker 2
It is a very lonely life. It's great, like you hear about stories, people getting sick about, like, thinking like they don't know what they're gonna do the next day. This is real. And this is something you see, they and they out.
00:22:42 Speaker 2
When you have someone like Hub71 that says, hey, I'm gonna be here. Don't worry. We're gonna figure it out and or let this. You're gonna have a means for you to kind of sustain what you need to do makes all the difference to these guys. We've had founders that were on the verge of closing shop on the, erm, within like two weeks.
00:23:01 Speaker 2
And because they had that sustenance for a couple more weeks, were able to turn it around, raise like $10 million and like all they need is that one break, right? Right. To see that and to keep growing that type of culture is something that is very satisfying. And we want to keep working on.
00:23:18 Speaker 1
Insha’allah, Insha’allah. Well, we wish you all the success, Insha’allah, Emirates Development Bank will be with you every step of the way. Thank you so much, Ahmed, for joining us today. We appreciate your time and share all the best for the future.
00:23:28 Speaker 2
Thank you, Ahmed, it was a pleasure.
00:23:29 Speaker 1
Thank you.
00:23:30 V/O
Economic Impact - Conversations from Emirates Development Bank.