The year has seen a flurry of activity across the tech landscape in the Middle East, but especially so for fintech. Startup investors, both private and government-backed, have flocked to this sector in the UAE, just like they have across the world. The UAE, along with Saudi Arabia, accounted for two-thirds of fintech funding dollars across the MENA region in H1 this year.
As of early 2021, the UAE had over 400 fintech companies. The country is looking to become one of the top five fintech hubs globally as well. Dubai and Abu Dhabi startup investors, as well as a handful of international ones, have been active with fintech investments this year. Meanwhile, both of the UAE’s startup jurisdictions, the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), have taken an active focus on fintech.
The ADGM has taken a number of steps towards encouraging fintech in Abu Dhabi. For instance, it’s annual global Fintech Abu Dhabi festival ran for its fifth edition last week. The ADGM also introduced changes to its VC managers framework to make it easier for VCs to participate in the investment landscape at the ADGM.
Moreover, government-backed sovereign wealth funds and startup ecosystem enablers have been quite active in Abu Dhabi this year, not just in the fintech sector but across the wider startup ecosystem as well. Here’s a closer look at what these government-backed Abu Dhabi startup investors have been up to so far in 2021.
Key government-backed Abu Dhabi startup investors
ADQ fuels venture capital efforts through DisruptAD
The Abu Dhabi Developmental Holding Company (ADQ), one of Abu Dhabi’s sovereign wealth funds, consolidated its venture capital efforts under the DisruptAD brand this year. DisruptAD acts as a single platform for ADQ’s local and global venture capital investments, with a focus on startups, venture funds, and incubators and accelerators.
The ADQ placed several of its venture funds under the banner of DisruptAD, including its AED 1.1 billion and AED 535 million venture funds, its South and Southeast Asia-focused Alpha Wave Incubation, as well as its flagship Ghadan 21 programme.
Weeks after the announcement, DisruptAD and Flat6Labs launched an AED 120 million (US$32.7 million) seed accelerator, Ignite, in Abu Dhabi. Its first cohort of eight startups graduated from the programme earlier this month, with investment tickets ranging from US$150,000 to US$250,000.
Mubadala dives into fintech investments
Mubadala Investment Company, another sovereign wealth fund to come out of Abu Dhabi, has been one of the most active fintech startup investors from the region this year.
It made its first investment out of its US$ 400 million European tech fund into Berlin-based insurtech startup WeFox, as the lead investor in the company’s US$125 million Series B. It also participated in a US$100 million Series C for Chicago-based multi-issuer technology platform Halo this year.
Locally, Mubadala has invested in some of the most popular fintech startups in the region, including BNPL company tabby (US$50 million venture round), personal investments app Sarwa (US$15 million Series B) and insurtech startup Hala (US$5 million venture round).
Beyond startups, Mubadala has also channeled funds towards early stage VC VentureSouq’s US$50 million MENA FinTech Fund I, and dished out US$1 billion to the Abu Dhabi Catalyst Partners venture fund at the ADGM.
Hub71 picks the pace on venture building activities
Hub71 is a startup ecosystem enabler focused on connecting startups with investors, customers, mentors and market opportunities. It announced this year that it had raised a total of AED 185 million (US$50.4 million) for startups since it was founded. Hub71 also grew 191% year on year for the period, from 35 startups to 102 as of February this year.
In June, Hub71 announced a partnership with the Abu Dhabi Investment Office (ADIO) over The Outliers Programme. The initiative aims to support early stage tech startups. For its first batch, over AED 10 million (US$2.7 million) was disbursed in grants to 10 startups from multiple industries, including fintech.
Hub71 also partnered with New York-headquartered Modus Capital this year, to launch a venture building initiative called Ventures Lab. Ventures Lab is focused on enabling early stage founders to build global startups from Abu Dhabi. The initiative has a special focus on the fintech sector, along with the direct-to-consumer, healthtech, and edtech sectors.