How UAE’s startup hubs and free zones create an entrepreneur-friendly ecosystem for funding and tech support

Like any growing economy, the UAE is also home to a thriving startup ecosystem thanks to its policies that create ease of incorporation for new businesses, and a digital infrastructure in place. Startups from different parts of the world are arriving in the UAE, where innovative ideas aren’t just accepted but nurtured at innovation hubs, where new entrepreneurs get funds, networking and technical support from big tech giants such as Microsoft.

The country is now home to more than 4000 startups, and has three major startup hubs in major cities of Abu Dhabi, Dubai and Sharjah, alongside several free zones, that provide support for digital ventures. For instance Abu Dhabi’s Hub71 currently fosters growth of 100 startups operating in 18 different sectors and is backed by Softbank and Microsoft among others. Dubai Startup Hub on the other hand has more than 1500 startups, after its membership surged by 236% the pandemic in 2020. It hopes to have 20 unicorns, which are startups valued at more than $1 billion, by 2031. This will be an addition to three UAE-founded startups, Vista Global, Kitopi and Emerging Markets Property Group, which have achieved unicorn status.

Smaller to the two major emirates, Sharjah also has its entrepreneurship ecosystem called Sheraa, where 122 startups are thriving and half of them are led by women. These incubators complement a business-friendly environment in the UAE, created by free zones and spaces such as Technology and Innovation Institute, where innovative ideas such as the hyperloop and a quantum computer are taking shape. The startup boom has changed the dynamics of society in the region, since 23000 women in the UAE are running businesses worth a whopping $50 billion, and have shattered the glass ceiling.

Startups from the region are also finding tremendous growth opportunities in the UAE, alongside firms that are leading the surge on a global scale. For instance Pakistani American Mudassir Sheikha and Swedish national Magnus Olsson came together in Dubai to launch ride hailing app Careem, which is now a super app, that provides payment and delivery services as well. Russian Pavel Durov who founded messaging app Telegram, shifted base to the UAE in 2017 and opened a headquarter in Dubai Media City, because the free zone doesn’t have taxes and he didn’t want to work for the government 180 days a year.

The move has paid off for Durov, as he raised $150 million in investments from Abu Dhabi’s state-owned fund Mubadala, and has been able to ensure privacy of users. This made Telegram a leading alternative to WhatsApp when it had announced a policy to share user data with Facebook, and now Telegram is also the preferred app for unfiltered news on the war in Ukraine.

Another popular startup hub that has emerged in the UAE in the past couple of years, is StartAD which is hosting the Fintech Corporate Sprint Accelerator 9. The ecosystem has so far produced more than 300 startups that’ve generated $70 million in revenues, and is accepting applications for more. Participants of its fintech accelerator programs also have a chance to win a $25000 grant and can later pitch their innovative ideas at GITEX 2022 in Dubai. Based at NYU Abu Dhabi, the incubator StartAD also has a partnership with the Authority of Social Contribution, more widely known as Ma’an.

StartAD focuses on entrepreneurs with impact-driven ideas, and supports their startups with training while connecting them with industry leaders to pilot their projects. Along with other bigger and evolving startup hubs and free zones, it has shaped the UAE as an ecosystem where new ventures can unlock funding, tech support, guidance and networking opportunities.