This UAE-based incubator and accelerator is nurturing innovative startups

The United Arab Emirates (UAE) was ranked first globally as the best place to start a business, as per the Global Entrepreneurship Index 2022. The country, with its world-class infrastructure and accessible financing options, is currently home to several startups that are cropping up in the region. 

While there are a number of accelerators bringing together startups and investors in the region, ZtartUp, founded by Dr V John Francis in 2021, is helping startups and entrepreneurs gain access to services such as mentorship programmes, training, capital, co-working spaces, as well as providing professional assistance.

John, who comes with close to four decades of experience in technology, governance, and policy, says, he wanted to create an ecosystem where entrepreneurs and businesses in the UAE could come together as a thriving community. He wanted to do so in a sector-agnostic way, which led him to start ZtartUp. 

“The incubation idea came in the context of merging digital and physical brick and mortar and setting up an incubation centre,” says John. 

He says the team of 15 believes in supporting every innovative business idea that comes its way, irrespective of the stature of the business entity proposing it.

ZtartUp thus presents itself as a catalyst to facilitate innovative ideas into commercially viable solutions. At present, it has 16 startups as part of its incubator and accelerator programme. 

How does it work?

John says, “Suppose you come to us with an idea and want us to support you, and you may not have any licence or document(s) which would allow you to work out of the UAE. If we believe in your idea, we provide something called a ‘gut budget’. It can range approximately between $250,000 and a million. Next in line, we have an ‘attempt budget’ in place, which we lend if we believe in further investing in your idea.” 

ZtartUp owns an equity stake of 7% in its incubated startups once they have formalised, attained licences, and become commercially viable. 

Over the past 18 months, four of the startups in its portfolio have crossed the million-dollar mark in revenue for 2021-22. Further, three companies have received Golden Visa, which is a long-term residence visa that allows foreign talents to reside, work, or study in the UAE. With this, they can also avail certain exclusive benefits. 

“At present, we are operating in nine sectors, including travel and tourism, artificial intelligence, robotics, sports, films, music, and arts, among others. We want to create a dynamic and diverse space,” says John.

Differentiation

According to the founder, one of the distinguishing feature of ZtartUp is that it facilitates a team of professionals like auditors, lawyers, marketing individuals, coders, and designers. It issues credible licences to these professionals, allowing them to work within the incubator as well as on external projects. 

“They bring knowledge of trends from their respective regions and expand into the GCC. When they interact here, they do so with what is happening on the ground. This gives them a platform to communicate with like-minded individuals and create a sense of community,” says John. 

ZtartUp also allows startups in its portfolio to participate in external cohorts and accelerator programmes. 

“Each one of them is given the full freedom to pitch and get traction there. We primarily want the startups involved with us to understand what is happening in the market at a one-on-one level. Yes, we will be funding them, but also want them to gain traction,” says John.

It has joined hands with co-working spaces such as LetsWork and WeWork. ZtartUp allows people who book in through the apps, or who are part of these co-working spaces, get an exclusive one row workstation at ZtartUp. 

However, it welcomes only a selective few. It evaluates companies by seeing whether the applicants will fit into the ecosystem or not. The ones selected are on-boarded for the first three months, free-of-charge. 

“The idea is to see how they mingle and interact with the rest of the team, and analyse if they come with any biases. Once we realise they fit in, we allow them into the spaces,” he adds. 

It currently competes with the likes of DIFC Fintech Hive, Techstars, Hub 71, In5, INNOVEST Middle East.

Additionally, ZtartUp also has business centres in place, which are home to Ziqitza ambulance service and Zafaari ticketing portal, among others. 

“We are in competition with other business centres because they do not nurture ideas, thoughts, and processes. Unlike them, we handhold these startups through the entire process,” says John. 

One of ZtartUp’s incubate, Zatram, also has a co-living licence by the Department of Economy, Dubai. 

The challenges 

While the idea of ZtartUp began in early 2020, restrictions imposed by the Covid-19 pandemic created initial hurdles. Finally, it was launched on March 21, 2022. 

John states that being a private entity and requesting a licence from the government took some time. The next task was to make it licence agnostic. John states that 99% of the incubates in the UAE have a Dubai Multi Commodities Centre (DMCC) licence, a Fujairah licence, or a Sharjah Entrepreneurship Centre (Sheraa) licence. 

“There is a valid reason for this. If I apply for a Dubai Economy Licence, starting prices will approximately be 30,000 to 35,000 Dirhams, whereas Shera and Fujairah are not that expensive. All the Emirates have their licenses, free zones, and mainland entity,” he says.

“Expats are taking licenses from these zones because it is cheaper. Plus, you do not have to pay annually or to any sponsor. This is what differentiates a mainland licence from a free zone licence,” he adds. 

As of now, ZtartUp has a mainland licence from the Department of Economy, Dubai. 

Innovation hub

Akshay Jayaprakasan, Associate Partner at Redseer MEA, highlights that Dubai issued over 72,000 new business licenses in 2021, which is a 70% growth compared to 2020. 

"Initiatives like ‘Make It in the Emirates’, Cybersecurity Strategy, Industry 4.0, and the target of net-zero emissions by 2050 highlight its focus on becoming a business and innovation hub,” he says. 

He adds, “UAE still accounts for over 50% of the value of PE/VC deals in MENA in 2022, raising $3.5 billion across 180 deals. More than 1/3rd of the deals in the UAW in 2022 were led by accelerators/angels/incubators. Further, Golden Visa, Green Visa, and the quality of life are attracting talent from across the globe to the region.”

According to a World Bank report, Dubai also has the most-friendly business regulations. “Investor interest picked up in the region over the last two years and also diversified across regions and sectors,” says Sandeep Ganediwalla, Partner, RedSeer. 

Future plans

ZtartUp has raised investment from angel investors.

The company is expanding its base to Kochi in Kerala, India, and has also joined hands with Kerala Startup Mission, Tamil Nadu Startup Mission, and India Startup Mission. 

John reveals, “We are planning to restrict ourselves to South India for the time being for logistical reasons.”

ZtartUp also has plans to open a centre in Singapore. Additionally, it is working towards creating the next round of team leaders who could look after the existing operations, so that the team can continue to explore other markets. 

(Inputs by Sindhu Kashyap, Lead Editor, International Initiatives.)

(Disclaimer: This story has been updated to remove names of some investors that were inaccurate)