Founders’ thoughts on UAE’s startup ecosystem
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The Global Entrepreneurship Monitor ranked the UAE first, in its Global Entrepreneurship Index in 2022. The Aerospace Xelerated team interviewed three UAE startup founders to find out how locating their business in the UAE has influenced their success.
Read along as these UAE founders share their views on how the UAE’s ecosystem is developing, thriving, and dealing with financial crises.
- Ali Saad: Founder & CEO at SawaUp, a platform that redefines workplace learning to empower organisation and enable high-performing teams
- Prakash Senghani: Co-Founder & CEO at Navatech Group — inventors of Saifety.ai, an AI enabled Safety Management Platform for high risk industries utilising AI and Machine Learning tech to streamline data capture, analysis and distribution of information in a Safety Management System
- Mathew C. Mathew: Founder & CEO at LogisEye, a tech startup connecting importers/exporters with logistics service providers
and marine insurance companies through their proprietary aggregator
marketplace, accelerating procurement of freight and marine insurances saving substantial cost and time while and enhancing transparency and visibility.
From your experience, what creates a good entrepreneurial ecosystem?
Navatech’s founder shares his views on what creates a good entrepreneurial ecosystem: “An ecosystem by definition, means interconnected systems working collaboratively, a good one is made up of many parts, with stakeholders including government entities, investors, academia, corporations, and startups” — Prakash Senghani, Navatech Group
LogisEye founder, Mathew discusses the different factors that compose the ecosystem “like ease of regulatory approvals and licensing from various government departments, supply and accessibility of finance, availability of competent and competitive human resources with skills, knowledge and experience, access to market and market demand for the products and services offered, integrated supply chain and advanced physical infrastructure play crucial roles in developing and sustaining an entrepreneurial ecosystem. Additionally, availability of accelerators and business incubators, government grants and concessions, R&D facilities etc help to boost entrepreneurial growth” — Mathew C. Mathew, LogisEye
SawaUp founder Ali Saad further emphasises that “access to qualified talent is perhaps the most critical dimension to support and push forward the entrepreneurial ecosystem. This empowers local startups to innovate and remain competitive as operations expand regionally and internationally” as well as “mentorship and entrepreneurial mindset”, and “early-stage investment in new ideas” — Ali Saad, SawaUp.
How do you see the start-up ecosystem developing in the UAE?
Mathew mentions the “startup eco-system is still at early stages in the UAE”, yet there are many successful start-ups and business incubators as well as “investors and VC tapping into flourishing business opportunities in the UAE” — Mathew C. Mathew, LogisEye
On the other hand, the CEO of Navatech says the “UAE is already one of the most vibrant and thriving startup ecosystems in the Middle East…all thanks to the government’s initiatives to attract international entrepreneurs and investments, and incubate local ones. Take accelerator programs such as Boeing Xelerated in partnership with Tawazun, Hub 71, and DTech, all of which offer unique benefits and attract fantastic talent” — Prakash Senghani, Navatech Group
Ali Saad explains the ecosystem in the past 20 years has experienced a boom “starting from the historical acquisitions and IPOs (Souq, Maktoob, Careem, etc.) that have reached scales and valuations comparable to mature markets globally”, now “we have also seen the emergence of pre-seed funds dedicated to early-stage startups” — Ali Saad, SawaUp
How do you expect the current crisis to impact the development of UAEs entrepreneurial ecosystem?
Just when the world seemed to be recovering from the COVID pandemic, recent news has taken the world by storm. With VCs experiencing its worst financial crises, investment banks lowering S&P stock price targets, and inflation continuing to rise, how will this impact the development and success of the ecosystem?
“It is hard to predict how things will move forward, but just looking at history, the UAE has proven to be resilient and prepared for external global challenges. The UAE has a very well-defined vision they are working towards in the next 10 years, with a large focus on enabling and growing the SME segment. All these indicators prove that despite global challenges outside of our control, the ecosystem will continue to be prioritised and nurtured” — Ali Saad, SawaUp
“Setbacks like the pandemic certainly hamper the growth of UAEs entrepreneurial ecosystem, but we are uniquely placed to weather it better than others. Inflation is predicted to peak at just under 4% in the UAE, much lower than other countries”. Furthermore, “the VC crisis is mainly impacting the valuations of mature companies; we have a much younger ecosystem with many startups in the early stages, whose valuations are based more on the idea and the quality of the team, neither of which is as majorly impacted by current world events”. — Prakash Senghani, Navatech Group
Mathew comments that “later stage companies are more affected compared to early-stage startups with this global crisis. It is the right time for every startup and every business to evaluate every single dollar they spend and reduce their burn”. — Mathew C. Mathew, LogisEye
How has locating your business in the UAE helped your start-up succeed?
We were curious to find out why these founders decided to locate their business in UAE — is there enough, and the right support available for startups in the region?
“Dubai is the transshipment hub to the Middle East and Africa. With increased digital adoption in UAE, our access to market was much easier and faster. We can get cost effective office infrastructure and talented and experienced human resources. Early-stage funding was arranged through friends & families and through angels. Government and authorities supported the entrepreneur ecosystem by offering rent free period and loan waivers” — Mathew C. Mathew, LogisEye
“It has been an excellent experience for me. The UAE has been the world’s 15th most significant recipient of foreign direct investment in 2020. In my experience setting up and maintaining a company has been much more efficient in the UAE when compared to the UK and India. On top of this, UAE has an abundance of entrepreneurial resources, including but not limited to mentors, low-cost office space, simple taxation systems, geographic advantages, and internationally established trade relationships” — Prakash Senghani, Navatech Group
“SawaUp received tremendous support since we started our journey. To start, the Sandbox accelerator program by DTEC (Dubai Technology Entrepreneur Campus) has been a key enabler in setting up my business seamlessly. In addition, the support I received from my network in the UAE, whether in the form of mentorship, angel investment, or even as prospective clients who shared early feedback on our product has been great” — Ali Saad, SawaUp
What are the key areas where UAEs entrepreneurial ecosystem need support?
“Despite attracting so much FDI, getting funding is challenging if you are not in FinTech space” Furthermore, “No doubt that there is merit in bringing in successful startups from abroad to grow capability and increase the resource pool, but when they exit, they tend to take their capital with them, whereas local start-up founders will more likely re-invested the exit money back into the local ecosystem, helping to climb the maturity curve” — Prakash Senghani, Navatech Group
“Focus areas for improvement include simplifying process for setting up of bank accounts, additional government support to get access to finance through banks, flexible investment criteria for early-stage startups, government subsidies or grants to attract more startups and ease of talent hiring (visa)” — Mathew C. Mathew, LogisEye
Ali Saad, further comments that finding the right talent can be challenging, where even if the country “has done an incredible job over the last 10 years to attract and nurture talent, there still seems to be a gap in finding talent who are open to joining early-stage startups” — Ali Saad, SawaUp
Why should startups care about being sustainable?
We asked Prakash on his views on sustainability and the importance of adopting sustainable practices both, in its professional and personal life.
“Not only should startups care, but everyone should as well!
The COVID-19 pandemic and the ongoing crisis in Europe have warned us to be prepared for the unexpected anytime.
We should all, as individuals, care about what is happening to the environment. An increased focus from society on the impact we are having on the planet is affecting political thought, which in turn is changing economics. This rise of ESG (Environmental, Social, and Governance) investing is making corporations think hard about the strategic choices they make. In turn, it also dictates where capital is being deployed in new ventures.
It must also be remembered that sustainability is about way more than the environment; there are social and economic aspects that are used to define the 17 Sustainability Development Goals from the United Nations.
“So, startups should care because there is a moral and an economic benefit to being sustainable, in more ways than just looking at carbon footprints”. — Prakash Senghani, Navatech Group
Thank you to all of the great founders that contributed to this interview blog:
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