ABU DHABI (Reuters) – Abu Dhabi will commit up to 1 billion dirhams ($272 million) to support technology start-ups, said on Sunday, in a special hub as part of efforts to diversify its economy.
FILE PHOTO: General view of Abu Dhabi, United Arab Emirates, January 3, 2019. Photo taken on 3 January 2019. REUTERS/ Hamad I Mohammed/File Photo
AMERICAN tech-giant Microsoft will be a strategic partner, delivering technology and cloud services to the companies that participate in the hub as the capital of the United Arab Emirates continues its effort to reduce the dependence on oil revenues.
Abu Dhabi derives about 50 percent of the real gross domestic product and about 90 percent of the revenues of the central government of the petrochemical sector, according to the credit rating agencies S&P.
The emirate launched a 50 billion dirham ($13.6 billion) stimulus fund, Ghadan 21, in September last year the economic growth. Ghadan means tomorrow in Arabic.
The new initiative, called the Hub 71, is linked to Ghadan will also involve the launch of a 500 million dirham fund to invest in start-ups, said Ibrahim Ajami, head of Mubadala Ventures, the technology arm of Mubadala Investment Co.
The goal is to have 100 businesses over the next three to five years, Ajami said. “The opportunities in the market in this region are enormous,” he added.
Mubadala, with assets of $225 billion, and a big investor in tech companies, will serve as the director of the hub, located in the emirate’s financial district.
Softbank will be active in the hub, and the support of the expansion of the companies in which it has invested, Ajami said, adding that Mubadala is also focused on attracting Chinese and Indian companies, among others.
Mubadala, which committed $15 billion in the Softbank Vision Fund, the launch of a $400 million fund to invest in leading technology companies.
The incentives mapped out by the government housing, office and health insurance as part of the 1 billion dirham bet, Ajami said.
Abu Dhabi will also be the announcement of a new research and development initiative on Monday linked to the Ghadan 21 plan, according to an invitation sent to journalists.
Additional reporting by Alexander Cornwell; Editing by David Goodman