Abu Dhabi hub to cover startups' office rent and housing costs for two months due to COVID-19
SOURCE: The National
Abu Dhabi’s Hub71 will cover all employees’ housing and office space rent for two months, and will evaluate the need for further support on a monthly basis as it shores up the 51 start-ups housed there amid COVID-19.
Entrepreneurs around the world face an uncertain future amid COVID-19. Reported venture funding deals took a hit in the first quarter in the UAE, declining 33% year-on-year, according to start-up platform MAGNiTT, which reported further declines in April. Sietse van de Kerkhof, a research executive, told The National that MAGNiTT expects to see the full effect of COVID-19 on venture capital in the next six months, as funding cycles typically take that long.
Hub71, which opened its doors with Dh520 million from Abu Dhabi’s Ghadan 21 stimulus programme a little over a year ago, moved all of its programming online at the very beginning of the pandemic in March. Introductions to investors and mentors, accelerator activity, and pitch events for its community of mostly early-stage start-ups have all been happening remotely.
This month, Hub71 expanded to 51 start-ups with the announcement of 15 new joiners to the Hub71 Incentive Program. The Hub71 Selection Committee prioritised global start-ups in the field of HealthTech and EdTech, which have supported adaptations to the complex challenges of the COVID-19 pandemic.
“Like our start-ups, Hub71 is rising to the challenges that Covid-19 is presenting, and we are adapting to the needs of our wider community alongside the government, businesses and our community of entrepreneurs," Ibrahim Ajami, interim chief executive of Hub71 and Head of Ventures, Mubadala Investment Company, said at the time of the announcement.
With global shortages in Personal Protective Equipment (PPE) to protect front-line medical staff, Hub71 selected US-based healthtech startup, Aumet, to be a part of its programme. Aumet connects 50,000 medical manufacturers from across the globe to distributors for essential items like PPE. Other start-ups include Altibbi, the largest end-to-end Arabic-language digital health information platform from Jordan; and Kinderly, a UK-founded early childhood EdTech company for parents and their infants.
"We'll see some very exciting companies born out of this crisis," Zubair Paracha, the founder of media company MenaBytes, which covers funding and start-ups in the region, told The National. "Start-ups in Mena - just like the rest of the world - will now have to focus more on unit economics and building sustainable businesses than anything else.
"There's a lot of talk around valuations taking a hit. I think that's obviously going to happen but at pre-seed and seed stage, we'll continue to see start-ups with exceptional teams raise money at very high valuations."
At a recent Finimize event, hosted on Zoom, on the future of the start-up and venture capital scene, Gaurav Dhar, chief executive of payment technology company Marshal, echoed those thoughts, but praised Hub71 for how it has supported its start-ups during this uncertain time.
“You are going to see a lot of start-ups fail, and then a lot coming out of nowhere,” he said.
“Hub71 has moved itself extremely quickly to ensure it can support all parts of a start-up’s lifecycle, I’ve been hearing good feedback there,” he added.
The ongoing crisis has placed the Healthcare sector under a microscope unlike ever before. Learn all about the industry’s funding and investment trends in our 2019 MENA Healthcare Venture Investment Report.