Dubai seems underestimated in the startup ecosystem but incentives up nowadays. Plus it is attractive to Turkish start-ups that want to scale in MENA region
Ersoy Erkazancı is a Turkish journalist representing Bloomberg Haberturk for Turkey. He’s in Dubai for 6 years and also observing the start-up scene, though his major responsibility is covering economics of the Gulf Cooperation Council (GCC) and Asia regions. As he moved to Dubai, he claims, the start-up scene was not so active and the opening of Dubai International Finance Center (DIFC) Fintech Hive accelerated the startup atmosphere in the country. “First, let’s leave the prejudices behind. “These oil-rich Arabs, we also have start-up very successful in Turkey, even if it was business” would be wrong to look upon. There may be money here, but the money is “Smart money” and this is an international arena,” said Erkazancı. He recommends to the Turkish start-ups that it is obliged to prepare, conduct market research and cooperate with people who know the region. “Good English, good presentation skills and sociability are also a must. They care very much that you are physically here,” added Erkazancı. I interviewed Erkazancı and here’s what he told me.
I know you have been in Dubai for six years as a journalist. How was the start-up scene in Dubai six years ago?
I moved to Dubai with my family in August 2015 and when we arrived, startup ecosystem was not so active. There were some start-ups but we were not hearing of government support and starting of accelerators. And Dubai International Finance Center (DIFC) Fintech Hive was opened in 2017. Startups established by courageous entrepreneurs and Careem and Souq were the most famous ones.
Currently, what type of start-ups do gain traction in Dubai? Can you mention some names?
Currently fintech startups are growing and especially payments and remittance are getting the most tractions. There are two main reasons for that. First one is government support to cashless society and high percentage of expat community who are looking for easy and cheaper ways to send their money to their home countries. Here are some start-ups worth to mention: paytabs, Swvl, Bayzat, Checkout, Telr and Payfortare.
What is the interest from foreign investors to Dubai start-ups? What are their criteria to invest to the Dubai startups?
In Dubai we can see investors from all around the world. However, since region is lucky in terms of liquidity and funding. And we see more regional investors in the ecosystem. As for the main criteria, being scalable first in Gulf Cooperation Council (GCC) than in MENA and then going global.
What is the effect of COVID-19 on the Dubai start-up scene? Which start-ups did shine out?
In the beginning it slowed down a bit but then with the liqidity and massive funding again the system grew. Especially healthtech, agritech, foodtech and edtech shine up and Pure Harvest, Kitopi, Anghami, TruKKer and Sarwa are some good names need to be mentioned.
As for the Turkish start-ups, how many Turkish start-ups are operating in Dubai? Do you have such data?
I can divide them into two. Startups founded by Turkish founders based in Dubai and founded in Turkey and moved to Dubai. Mr Usta, Urbancircle, Joi Gifts and Justmop are some names founded by Turkish founders. On the other hand, Vcount, Sensgreen and Finedine are some startups founded in Turkey and operating here in Dubai.
What do you recommend to the Turkish start-ups if they want to operate in Dubai? What type of start-ups are needed in Dubai?
First, let’s leave the prejudices behind. “These oil-rich Arabs, we also have start-up very successful in Turkey, even if it was business” would be wrong to look upon. There may be money here, but the money is “Smart money” and this is an international arena. There is too much competition: Indians, Pakistanis, Lebanese … there keeps me holding in Turkey, I got a good thought. It is imperative to prepare, conduct market research and collaborate with someone who knows the region. Good English, good presentation skills and sociability are also a must. They care very much that you are physically here.
The Turkish Trade Center affiliated with Turkish Exporters Assembly (TİM) also provides serious support to technology companies. If you have a product and want to come directly, you can proceed first through the Trade Attaché and then by reaching the successful Turkish executives here. Having a high-quality, high-level Turkish community in Dubai will also help you. Especially the number of Turkish executives at the beginning of IT departments of banks have increased.
Fintech, payment, agritech and healthtech startups have high chances to become successful.
What kind of incentives are provided to the start-ups in Dubai?
Many accelerators can be considered if you are a start-up. DIFC Fintech Hive is the most important of these. There is also a cooperation agreement with Fintech Istanbul. That’s why you can go through Fintech Istanbul. In Abu Dhabi, ADGM is the biggest competitor of Abu Dhabi Global Markets, DIFC.
Government support is very good. License and visa are offered to start-ups by the governmental authorities.
That’s all I want to know. If you have anything extra, please add.
First of all, the state always sets big goals as a pioneer and encourages the private sector to comply with these goals. Some of the projects are Smart Dubai and Paperless Dubai 2021. The goal is that by the end of 2021, there will be no transactions made with paper documents in any government institution. Everything will be recorded with blockchain technology . We can count many examples of targets similar to these.
In summary, the State sets great goals and encourages the private sector. But while doing this, it provides all kinds of support. Of course, on the condition that companies come up with projects that meet these goals set by the state. The themes of EXPO 2020, which was postponed for 1 year, are mobility, sustainability and opportunity.
The 2017-2021 Dubai Plan includes a Dubai Chamber US$ 27 million fund to be invested in next generation business through the Dubai ‘Smartpreneur’ Competition, Dubai Start-up Hub, Mohammed Bin Rashid Al Maktoum Business Innovation Award and the Dubai Innovation Index. In further efforts to support the sector, the government has allocated 20% of all governmental capital projects to start-ups and SMEs. SMEs will be permitted to receive government contracts up to the value of US$ 108 million. In addition, in an attempt to support SMEs in maintaining liquidity, all public sector payments will be paid within 90 days.
Additionally, Smart Dubai and partners in the UAE government have committed to transforming the UAE into the new testbed for startups and entrepreneurs to innovate and scale emerging technologies. In the past two years they have launched and continue to operate a number of programs, such as Global Blockchain Challenge, Dubai Smart City Accelerator and Dubai Future Accelerators.
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