Corporate/Startup Collaboration & Beyond
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MENA-based startups raising a yearly record of funds this year is not the only indicator of ecosystem maturity and entrepreneurial success. A look at MENA’s Exits over the year can emerge with interesting trends that reflect business acumen for the startups on one end, and strategic potential for acquirers on the other. As we record a monthly record of Exits in our November Venture Investment Dashboard with highly anticipated Exits by the likes of UAE-based iKcon, Qatar-based Meddy, and UAE-based elGrocer, we explore the nature of these acquisitions in relation to their potential of success.
One of the most interesting aspects of MENA’s 23 exits recorded this year was the proportion of acquisitions by regional/local corporate groups & entities. In 2021, more than 30% of startup acquisitions were closed by local corporate groups, conglomerates, and joint ventures including the likes of global telecoms Etisalat and Orange MEA, UAE-based holding company Multiply Group, Saudi-based pharmaceutical entity Tamer Group, and Kuwaiti 3S International Company. Furthermore, as corporate giants continuously seek innovative Tech and pioneering solutions to further enhance their product & service offerings, many local and global companies have set up entrepreneurial branches specialized in incubating, investing, or acquiring up-and-coming startups with ingenious propositions.
Corporate executives seem to understand that a great deal of keeping up with next-generation Technologies and Innovation is in engaging with emerging startups. On the other hand, access to a veteran network, wider working capital, and markets with a wide established presence can really boost a startup’s scaling journey. This provides a premise for a corporate/startup symbiosis, one which Tala Al Ansari, District 2020, Director, Innovation Ecosystem & Scale2Dubai sees highly impactful for startup growth in the region:
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Corporations are powerful when it comes to Market access, Economies of Scale & Resources, all the areas that are challenging for startups. Startups, on the other hand, are powerful when it comes to agility, risk appetite & challenging the status quo, all the areas that corporations find challenging. The value of a collaboration between both parties is evident, they complement each other well. Fortune 500 companies use startups to remain competitive. They realize that some of their problems can be solved much faster through startups.
In other cases, finding the right startup to collaborate with is a struggle for corporates. 100 million start-ups are born each year so where does a corporation even start to look for those & how can we identify the most promising ones? Working with incubators & accelerators can surely facilitate this process. However, a more sustainable approach that corporations can take would be for them to be part of an innovation ecosystem and community. Being part of an ecosystem will allow corporates not only to benefit from working with accelerators but also to have access to a continuously thriving startup talent pool as a result of ecosystems nurturing startups with access to market deal-flow, access to funding, access to talent & access to services.
In my role as Director of District 2020’s Innovation Ecosystem and Scale2Dubai, I have the privilege to support the curation and design of a global innovation ecosystem that aims to support collaboration and new business opportunities. This ecosystem development is what we take as our mission at District 2020, the human-centric city, which will evolve from Expo 2020 Dubai. District 2020 has been planned to transition from the six months World Expo and will re-purpose over 80% of the Expo’s built infrastructure into a mixed-use community to work, live and explore.
In the process of designing a curated innovation ecosystem, we decided to start by attracting corporations, startups, accelerators & incubators from 4 specific sectors for our ecosystem; Smart Cities, Smart Logistics, Smart Mobility & Smart Manufacturing. These sectors are in line with Dubai’s future agenda and focus on technology acceleration. Bringing industry players closer together will facilitate the matching-making process between corporations & startups. It will also support focused innovation to solve pressing challenges those industries face.
At District 2020, we will have 80-100 startups join our ecosystem annually through our global entrepreneurship program “Scale2Dubai” to provide corporates with a sustainable pool of talent. We will place startups from the program right next to their industry leaders to further enable collaboration. For example, a logistics startup from “Scale2Dubai” will be placed next to the global logistics headquarters of one of our anchor tenants Siemens and next to another key anchor, DP World, who is establishing a Logistics education institute. This collaboration will also be orchestrated through industry & social events bringing the community closer together.
In today’s world, a good ecosystem is one that shortens the innovation lifecycle for enterprises & this is best done by having all the relevant stakeholders on the table. As a certified design officer, I truly believe in the power of co-creation. It is for this reason that I believe in the value of implementing a Quadruple Helix Innovation model to curate our ecosystem at District 2020; a model where Government, Industry, Academia & Citizens all co-create the future together. We envision this happening within Distirct 2020s 5 G-powered living lab, the first of its kind in the region. Our living lab, for example, will allow another one of our anchor tenants Terminus Technologies, an AI and future technology innovation leader, to pilot smart city solutions within District 2020, with a mobility startup; and have an academic institute capture the learning from those pilots through studies with citizens.
As we continue designing our ecosystem at District 2020, some of the critical questions we hope to address are:
“How might we further enable corporate-startup collaboration through the ecosystem?”
“How might we embrace a culture of collaboration versus competition through Industry peers?”
“How can our ecosystem commercialize research & innovation faster?”
While we don’t have all the answers yet, we believe that co-designing our ecosystem to get the answers to those questions, is an exciting start.
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