The Sharjah Entrepreneurship Centre, which has supported more than 150 start-ups since it was established in 2016, aims to increase this number to 100 companies a year and establish its own fund in 2023 to invest in potential ideas and ventures. Sheraa plans to capitalise on its existing strengths in 2023 and will focus on three industries — education technology (EdTech), clean technology (CleanTech) and creative industries, such as art and culture — with the aim of producing unicorns, or companies with a valuation of $1 billion or more, chief executive Najla Al Midfa said.
“We aim to support 100 start-ups a year, without losing a personal touch with the founders and their teams. So far, we are averaging 20 a year and it will be a big jump,” Ms Al Midfa told The National ahead of this weekend’s two-day Sharjah Entrepreneurship Festival 2022, which is organised by Sheera.
“We also need to think about generating new capital for start-ups and are planning to establish our own fund. The initiative is at an early stage and still being studied … on how we can support them [start-ups] through funding not just using equity … equity funding is one instrument but what are the other instruments whether it’s revenue sharing or some form of debt.”
Sheraa, which means to sail in Arabic, is Sharjah’s initiative to develop a robust ecosystem for entrepreneurship and innovation in the northern emirate.
By the end of 2021, it had supported 122 start-ups that have raised a cumulative total of $128 million in investments, generated $187 million in revenue, and created 1,400 jobs. This year, Sheraa supported 40 start-ups.
Headquartered at the Sharjah Research, Technology and Innovation Park, the non-profit government organisation also has innovation hubs at the American University of Sharjah and University of Sharjah.
“Sharjah already has natural strengths in three sectors — EdTech, CleanTech and [the] creative economy. If we continue to build up on these strengths, we are more likely to be on a journey to support start-ups in becoming the next unicorns,” Ms Al Midfa said.
Currently, Sheraa does not take equity in the start-ups that it supports but it helps them to access funding through its corporate partners such as Air Arabia, Crescent Enterprises, Sharjah Media City and SRTIP. So far, it has been able to support start-ups with $1.5 million in grant funding.
“This is quite valuable for start-ups as they don’t need to dilute their equity at an early stage. On average, they [start-ups] are provided with $30,000 to $50,000 in grants,” Ms Al Midfa said.
“We also help them in securing contracts or POCs [proof of concepts] that are paid, so they deploy their solutions, products, and services at customers’ sites and get paid for it — that is our way of facilitating capital for them.”
A POC is what start-ups use to demonstrate to a corporation that their technology is financially viable.
Over the years, Sheraa has improved the brand image of Sharjah and made the emirate a new magnet for entrepreneurs, said Ms Al Midfa.
“These are some of our biggest accomplishments. We were very lucky to have a strong education base with top universities in the emirate. When we started, we already had 30,000 students … a huge talent base … at one place and it made our life much easier.
“Six years ago, no one was thinking about Sharjah when it comes to start-ups … the first name [had] always been Dubai. In the past few years, it is great to see Sharjah putting itself on the map of the global start-up ecosystem,” Ms Al Midfa said.
In June 2020, Sharjah was ranked first in a list of high-growth, activation-phase start-up ecosystems globally.
According to the Global Start-up Ecosystem Report, launched by policy advisory and research organisation Start-up Genome, an activation-phase ecosystem is characterised as having up to 1,000 start-ups.
Despite various positive catalysts, “fresh capital” is one area where accelerators and policymakers need to focus on, Ms Al Midfa said.
“That’s an area that we still need to develop in Sharjah … to be honest there aren’t many VCs [venture capitalists] in Sharjah … most of them are in Dubai or Abu Dhabi or Cairo that are the big epicentres of start-ups.
“We need to develop [the] funding landscape further in Sharjah. At early stages, we do have entities like Crescent Ventures, but we would like to see more … Sheraa is acting as a catalyst to encourage more Sharjah investors to invest in Sharjah entrepreneurs.”
Despite the Covid-19 pandemic, regional start-ups continued to boom and attract financing to support their operations.
Total financing from venture capital funds in the Middle East surged 132 per cent to almost $2 billion last year, with the total number of deals up 5 per cent to 410, according to data platform Magnitt.
“I am very proud of our response to Covid. We pivoted very quickly and moved our programmes online,” Ms Al Midfa said.
Ms Al Midfa said Sheera accelerated the adoption of new technologies and “now it’s much easier to tap into global markets, now you can hire talent from anywhere in the world”.
During the pandemic, Sheraa created a $1 million Start-up Solidarity Fund to help companies struggling to cope with the impact of Covid-19.
It also launched a Dh1 million initiative to help regional start-ups within the health and food technology space, which are working to mitigate challenges posed by the coronavirus.
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