By Tamara Pupic / Entrepreneur Middle East
In the past few years, Dubai achieved to set itself in the world highest profile startup accelerator programs, i.e. Y Combinator, Techstars, and 500 Startups. The city comes out as an innovation-dense city, and Techstars became the first US accelerator and venture capital fund to establish an office in the UAE last year.
To start with, it is the first investment by an Emirati family into an accelerator program focused on early-stage startup founders. GINCO Group of Companies is a Dubai-based full service general contracting firm that has been firmly established in the country’s construction sector, since its foundation back in 1975 by Gheyath Mohammad Gheyath. More recently, GINCO launched GINCO Investments to support and nurture local entrepreneurial talent, as well as potentially power the rise of new industries. With such intentions, it was a perfect partner for Techstars’ vertical program, which is typically operated in partnership with large corporations- in joining Techstars’ Corporate Innovation Partnerships program, GINCO has joined the ranks of institutions like Sony, Barclays, and Amazon. “Our partnership with GINCO is key to our success here in the UAE, and they have been phenomenal,” says Vijay Tirathrai, Managing Director, Techstars Dubai. “Leveraging on their decades of experience in the construction and engineering field, they have provided technical expertise, and supported pilot projects for our founders. In addition, they have helped our founders to fast track the right connections in both the government and the private sector. This relationship has been nearly two years in the making and we have a shared vision to nurture innovation through technology startups. Furthermore, GINCO helps Techstars expand our mentor network, and our external recognition of cohort.”
As a worldwide network, Techstars’ mentorship-driven accelerator programs offer support to entrepreneurs throughout their lifelong journey, “from inspiration to an IPO.” To date, 1,207 companies have become part of its portfolio, and have jointly received US$4.7 billion of total funding- and 88% are still active or have been acquired. In addition to Techstars startup programs (Techstars Startup Digest, Techstars Startup Weekend, and Techstars Startup Week), another crucial pillar of Techstars’ strength is its venture capital arm, Techstars Ventures, with $265 million under management. “This year, Techstars will have close to 40 accelerator programs worldwide,” Tirathrai explains. “There are essentially two types of programs: corporate innovation programs whose objective is to disrupt certain industry verticals, which is done with leading corporate partners for respective industries, and city programs that tend to be generic and agnostic of any particular industry or verticals. Our Dubai accelerator is agnostic; however, we do have a slant for a smart cities theme.”
Techstars is known for putting a strong emphasis on collaboration with and within the local community. In Dubai, that is further strengthened by Techstars Dubai being a founding member of Area 2071, a Dubai government initiative aimed at spearheading innovation. “It’s a great time to start a business in the Middle East, because of its young demographics being hungry for rapid change, its growing mobile penetration enabling small businesses to reach a wider audience, its readiness to adopt technology, and to disrupt traditional business models, and the reforms of the regulatory frameworks to facilitate the use of fintech, AI, blockchain applications, IoT, and so on,” Tirathrai says. “Furthermore, heightened awareness of the success of tech startups and acquisitions in the region has seen increased investors’ appetite, both by angel investors and venture capitalists.”
Edmond Husseini and Taline Vahanian, co-founders, Felix.
As long-time residents of Dubai, Taline Vahanian and Edmond Husseini, co-founders of Felix, a fullservice digital insurance broker, echo the same sentiment. They are building a region-specific solution, hoping to increase customer service standards in this industry in the Middle East. Since its beta launch in September last year, Felix has enjoyed 20% monthon- month growth, while the co-founders consider their biggest successes so far to be setting up partnerships with the top eight auto insurance companies in the UAE, and crossing AED1 million in premium sales very quickly. “This region has the lowest insurance penetration in the world, and we think that it is because the distribution of insurance has been done in a very archaic way,” Husseini says. “We think that the internet is a great opportunity to change that, because it gives you reach, allows you to talk to millions of people easily, and to educate them. We are trying to change the way insurance is perceived here, and change the way it is bought. Felix is a digital insurance platform, and by having an account with Felix, you deal with us, our customer support team is at your disposal whenever you need it. You don’t need to deal with the lousy customer support of your insurance company, we fight your battles for you. You deal with us, you’re talking to the same group of people all the time, the interface is consistent, the customer experience is consistent. We worked very, very hard on that, and that’s what we’re good at. We handle all of the frustration of the back end of the insurance company, because we deal with them every day anyway. So, we know how to get stuff done with them.”
When asked why they decided to enroll in the Techstars Dubai program, Husseini replies, “I think it is by far the most prestigious accelerator to have set foot in Dubai. With previous businesses I’ve been involved in, I’ve been in touch with other accelerators, but the Techstars experience is on a completely different level. It is about their pool of mentors, but also the funding- $120,000 is a lot of money for a small business. That’s pretty serious, that shows commitment. Other accelerators give you $20,000 or $30,000, and take a lot more equity. Also, the overall business environment for startups here is certainly improving. We didn’t have initiatives like Area 2071 five or seven years ago when I was starting my first business. In those days, they treated anybody and everybody in the same way. Now there are incentives to set up small technology businesses. I still think that we can do better, as a country. It’s not always easy, but it’s going to get easier.”
For its inaugural class which runs from January to mid-April, wrapping up with a demo day, Techstars Dubai has selected 10 earlystage companies, offering a $100,000 convertible note and $20,000 in exchange for 6% common stock to each of them. In addition to benefiting from Area 2071’s strategic location at Emirates Towers, the enrolled companies get over 400 perks worth $1 million from ecosystem partners. Tirathrai explains that applicants go through a vigorous selection process with several rounds of interviews, being evaluated on the founders’ experiences and credibility, the product, the use of technology, the relevant addressable market, and the timing of the product-market fit. “There is overwhelming focus on the founder’s ability to execute ideas,” he notes.