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DP World mulls plans to launch innovation centre
Company’s chief innovation officer claims the Mena region’s start-ups ‘lacks support and investment at the idea stage’
January 23, 2014 11:19 by Sidra Tariq
DP World, the marine terminal operator behind the Turn8 accelerator programme, plans to launch an innovation centre to boost the entrepreneurial ecosystem in the region, according to DP World’s chief information officer, Yousif Al Mutawa. “In the long run, we are looking towards establishing a full-fledged innovation centre in Dubai that will work with universities, corporations and entrepreneurs. It will link investors with innovators, educators and academics, and act as a catalyst for this whole ecosystem we are trying to create for entrepreneurship and innovation,” he says.
Al Mutawa adds that the region lacks support and investment for start-ups at the idea stage: “One of the challenges is that a lot of investors in general are used to investing in brick and mortar businesses. They mainly invest in something that has been established and already has revenue coming in, but you don’t find people investing in raw ideas and early, pre-start-up stages, or in intellectual property that has a potential to grow and have an impact on the economy.”
Tamer Ahmed, CEO of anti-counterfeit start-up Asly – which was among the nine teams that pitched to investors during Turn8’s Demo Day – underlined the role incubators and accelerators play for the entrepreneurial community. He says: “An incubator is a must in our region, because it is the best way to start businesses. When [entrepreneurs] go to incubators they learn faster. [The incubator] puts you on the right track on day one, tells you what to do, how to do it, and brings you the best mentors and people to help you doing it.”
Aside from mentorship and support, one of the factors that attracts entrepreneurs to accelerators and incubators is the reduced burden of start-up costs. “It is very costly to go and start your own business,” says Al Mutawa. “The cost of rent, licensing etc, can kill any start-up, so they need to have some incubators, co-working spaces and places where they can network and start at a low cost – places that can help them do business development and maybe launch more refined products and services.”
Dubai is the right place to start a business and such initiatives, says Ahmed Saad, co-founder and CEO of social media monitoring tool Crowd Analyzer: “Dubai will lead the Mena region in terms of entrepreneurship.”
Asly and Crowd Analyzer are among nine start-ups that have just graduated from the Turn8 accelerator programme and are exploring investment opportunities.
According to Saad, Crowd Analyzer secured $83,000 from two angel investors prior to the Demo Day and has received further inquiries from investors after the event.
The start-up uses sentiment analysis to gauge people’s opinions on social media about products, campaigns, brands, events and news in both Arabic and English.
Saad and his team seek to raise up to $400,000 to invest in marketing, IT infrastructure, payroll and data supplies, and expect to close the first round of funding within two to three weeks. “During the accelerator program, we have finalized our beta version and won in competitions such as the IE Business School competition in Qatar where we got a prize of $8000. We also have 12 clients in our pipeline, including big names such as Etisalat and Dubizzle,” adds Saad.
Asly provides manufacturers and brands with unique codes that can be imprinted on products or scratch cards, which customers can then SMS to the service to determine if a product is genuine or a counterfeit. The pharmaceutical and auto-spare parts industries are two of the main target audiences for the start-up.
Ahmed says that Asly has also generated interest from some investors after the Demo Day. His team is close to signing a contract with Adam Labedzki, CEO of Poland-based incubator Invemax, who has also invested in a vaccine-producing company. “[One of the reasons Labedezki] is interested to invest in us is because it will be important for both his businesses,” says Ahmed, adding that: “This is the kind of investment I like – which is much more than money. [It is also about] the connection; he is a customer at the same times as an investor.”
The start-up has also bagged Egypt-based pharmaceutical company Al Debeiky as a client to provide protection for one million products that are shipped to both Egypt and Saudi.
Mentorship and support
According to Al Mutawa, Turn8 will continue to provide guidance to the nine start-ups for another four months: “We will help them in negotiating deals with investors, with business development to secure contracts and get them references in the market. We will help them grow and start standing on their feet.” He adds that the next round of the accelerator commences in February and the ten teams joining the batch have almost been finalised. The accelerator will run two rounds every year, with the second round of 2014 starting in August.
The teams will receive mentorship, training and networking opportunities, in addition to seed funding of up to $30,000 in exchange for an equity stake in the business. The day-to-day operations of the programme are handled by consulting firm Innovation 360.