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Why venture capitals attracted to the UAE should take a trip to Abu Dhabi

John Hensel, Chief Operating Officer and Chief Revenue Officer at the US-based blockchain-based financial and regulatory technology company Securrency
(Image credit: Securrency)

Abu Dhabi is fast developing into an essential global hub for innovation in financial technology and many other important industries by encouraging investment and supporting startups to attract change-makers from every industry to the Emirate.

Bridging cultures and continents, Abu Dhabi is the capital of the UAE and stands at an intersection between Europe, Asia, and Africa.

Aware of the need for economic diversification and the cultivation of professional talent across multiple industries, the government has taken many proactive and far-reaching measures over the past decade.

John Hensel, Chief Operating Officer and Chief Revenue Officer at the US-based blockchain-based financial and regulatory technology company Securrency, said that the UAE, today, has not only shifted towards a knowledge-based economy but has also committed to transitioning to a low carbon economy, developing policies and initiatives to reduce emissions.

Securrency arrived in Abu Dhabi in 2017 and entered the Abu Dhabi Global Market (ADGM) Regulatory Sandbox to innovate fintech solutions.

Out of the top six venture capital (VC) investments in the Middle East in the first quarter of 2020, Hensel said that four were in the UAE, amounting to $173 million from investors around the world.

According to startup data platform MAGNiTT, the UAE maintained its dominance as the highest recipient of venture funding (60% of all deals) in 2019 at $426m

While investment activity is expected to slow as the world grapples with Covid-19, Hensel said the UAE is well-positioned to brace for impact.

“Abu Dhabi has successfully pivoted to become a global forerunner in aerospace, biomedical, tourism, manufacturing, agriculture, aquaculture and a host of other emerging industries – including the financial services space,” he said.

Moreover, he said that many graduates of New York University Abu Dhabi and Khalifa University have gone on to contribute to technological developments such as blockchain and artificial intelligence (AI), helping to bring Abu Dhabi to the forefront of global innovation.

Vibrant entrepreneurial spirit

As investors are forced to re-examine the longevity of companies and the ability for operations to continue amid the coronavirus pandemic, Hensel said these emerging technological developments may provide a valuable market opportunity that can stand the test of these uncertain times.

“Mitigating risks under the abundant resources, the education system is just one aspect attracting a flurry of businesses and investors,” he said.

WisdomTree Investments (WTI), a provider of Exchange Traded Funds (ETF), Exchange Traded Products (ETP) and asset management services with over $64b in Assets under Management (AUM), led Securrency’s Series A along-side the Abu Dhabi Investment Office (ADIO). 

Hensel said that an incredibly vibrant entrepreneurial spirit is evident throughout the business community of Abu Dhabi.

Supported by Abu Dhabi’s Ghadan 21 stimulus programme, the Hub71 accelerator community has succeeded in attracting 39 startups from eight different countries, VC funds and big tech players including Microsoft for Startups, Amazon and SenseTime.

After opening its doors just over a year ago, Hub71 has thrived and recently set a target of attracting 100 ventures by the end of 2020.

Funded by Mubadala, SoftBank Vision Fund, Microsoft and Abu Dhabi Global Market, Hub71 is dedicated to supporting startups even in the face of economic adversity.

Presenting vast investment opportunities

“As economic turbulence induced by the pandemic impacts businesses worldwide, Hub71 is implementing measures to accommodate companies remotely, showcasing the nurturing and flexible business culture,” Hensel said.

Moreover, he said that Abu Dhabi will weather the pandemic and emerge stronger than ever when financial markets ultimately rebound.

“Years of development and industry collaboration have reinforced the business community to withstand this current period of volatility. Undeterred by the pandemic, VCs are encouraged by the entrepreneurial appetite - asserting that resilience and more active portfolio management are of crucial importance when the financial system is under strain,” he said.

Furthermore, he said that the regulatory frameworks, investor protection, and tax incentives all play a huge role in creating Abu Dhabi’s optimal ecosystem for investment.

“VC investment has been surging in the UAE, and while not yet fully developed, it presents vast opportunities for global investors,” he said.