Sharjah’s neighbour and sister emirate, Dubai, is the centre of the Middle Eastern start-up economy, but Sharjah is also developing a culture of entrepreneurship, bolstered by support from the authorities, its well-developed education sector and its lower cost base.
The authorities are working to bolster start-ups and entrepreneurship. January 2016 saw the Sharjah Investment and Development Authority and the American University of Sharjah (AUS) establish the Sharjah Entrepreneurship Centre, known as Sheraa. It offers early-stage start-ups a 12-week accelerator programme, providing equity-free funding of up to $10,000 and rent-free office space. The first took place in early 2017, involving 10 start-ups, including Yallapickup, a service that connects users to pick-up truck drivers, which has Dh1m ($272,000) in development funding. Sheraa also hosts a three-week “ideathon” to help new firms test ideas, learn skills and attend workshops before applying for the accelerator. In November 2017 Sheraa also held the first Sharjah Entrepreneurship Festival, at which the government announced plans to award 10% of digital transformation projects to start-ups and small and medium-sized enterprises (SMEs).
Financing is a perennial challenge for start-ups. To address this, the office is working to create a pool of local start-up investors, mainly wealthy Emirati families, though Najla Al Midfa, general manager of Sheraa, said that it would take time to develop local understanding of how this works. “The UAE has seen an improvement in the availability of financing as people gradually become more interested in investing locally, but there is a need to promote early-stage investment, as there is a general expectation of quick and substantial returns,” she told OBG. Access to finance is a particular problem for non-Emirati start-ups, as government initiatives to make funding more available, such as the federal Khalifa Fund for Enterprise Development and Sharjah’s Ruwad Establishment for SMEs, target UAE nationals only. However, Al Midfa said that Sheraa could help develop ties between start-ups and sources of finance, such as venture capital firms, bolstering the availability of finance for start-ups.
Crescent Enterprises, a private firm, is also active in the segment. In addition to a partnership with Sheraa that has seen the launch of a mentoring programme for local entrepreneurs, the firm operates a venture capital arm, CE Ventures, which invests in start-ups directly and start-up funds. Another arm of the company, CE Creates, was launched in 2014 and incubates and develops its own proprietary start-ups. “Crescent has always been entrepreneurial, but over time, its business naturally shifted towards established companies, and we wanted to return to our roots of building new businesses from the ground up,” Samer Choucair, vice-president of CE-Ventures, told OBG. “Large corporates will always be disrupted; it’s just a matter of time. To prepare for this, companies will need to look at new innovations within the sectors in which they operate and build UAE-based brands.”
Education & R&D
Sharjah’s status as a regional educational centre is also of benefit to entrepreneurs. “The start-up ecosystem in Sharjah is very young, but human capital is a real strength, given the number and quality of universities here,” Al Midfa told OBG. “Most graduates look for employment in the public sector but we are working to try to change this by offering classes on topics such as entrepreneurship.”
The emergence of research and development (R&D) activities at universities is also helping to bolster the sector. The Sharjah Research, Technology and Innovation Park – a new free zone being established – and the government announced plans in May 2017 to invest Dh1.8bn ($490m) to make the AUS the leading Arab research university within five years. “There are a lot of projects in the R&D stage at AUS that could be commercialised, in particular in medicine and electronics, and we will see more and more R&D-based start-ups emerging in the coming years,” Choucair told OBG.
You have reached the limit of premium articles you can view for free.
Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.
If you have already purchased this Report or have a website subscription, please login to continue.