Dubai: Fintech-focussed startups are emerging as the favoured category in Dubai Internet City’s in5 incubator programme, as more UAE and Gulf residents take to digital payments and services.
“Is there anyone using cash these days?” queries Ammar Al Malik, Managing Director at Dubai Internet City, which confirmed that companies in the in5 programme have collectively raised more than Dh1.4 billion from investors and venture capital funds. There was no slackening even last year, with 150 companies signing up and taking the total in5 portfolio to 500.
Of that Dh1.4 billion raised by in5 firms to date, one fintech – tabby – raised a whopping Dh485 million, and that too most of it last year. The company is into ‘buy now pay later’ services, which has emerged as a payment option of choice for smaller ticket purchases on zero-interest. The other winner from last year is eyewa, which started off as a pure ecommerce player in eyewear. After raising more than Dh77 million, it now plans to have a 100 brick-and-mortar store network in the Gulf.
Whatever be the case, in5 seems to have developed the knack of picking winners. Al Malik calls it the region’s biggest incubator. While Dubai Internet City and in5 do not make direct investments in any of the startups that enter the programme, they offer a chance for outside investors to weigh that startup’s prospects and put in funds into them.
“The startups are chosen by an independent committee and we have academia, investors and multinational representatives in that,” said the top official. “While we do not invest, we offer a whole lot of subsidies – on real estate, the visas and more. Then there is the mentoring services.
“Typically, these programmes last for three years, and in some cases, they can go beyond that.”
Early stage picks
Given the relative early stages of the startups, the in5 selections are based on the idea that the business wants to put into action – and the team that is behind it. If convinced on these scores, they get taken in for the programme.
The companies need not be based in Dubai or UAE to be considered, Al Malik added. That as many as 150 new entrants were taken in during 2020 – with all the COVID-19 distractions – pleases him no end. “Our entrepreneurs proved their agility, determination and persistence in seizing new opportunities across tech, media and design,” he said. “Their unwavering resilience resulted in innovative solutions and products that were not only relevant to an increasingly diverse marketplace, but also addressed the market needs.”
Not that fintech or ecommerce garnered all the investor attention. There was quite a bit of visibility for Desert Control, which raised Dh85 million via an IPO on the Euronext Growth Oslo exchange. The agritech company is venturing into vertical farming ways in the UAE and beyond.
Another in5 entity, Derq, got to go to Las Vegas through a partnership with driverless tech company Motional. The two aim to pilot autonomous vehicles aligned to smart infrastructure in Las Vegas.
Edtech, why not?
Al Malik has his own choice of what could be a winning category in the next five years or so. “I would say that would be edutech – so much of education and knowledge can imparted over the internet,” he said. “Not just when it comes to study-from-home, but in helping the 300 million to 400 million in the region who do not have the basic qualifications. With online access, there is a lot of skills they can access.
“That makes edtech startups a big thing for me – let’s see what happens next.”