Abu Dhabi wants to be home of the next disruptive technology. To get there, it's partnering with Microsoft and Softbank.
Mubadala Ventures, the tech arm of one of Abu Dhabi's sovereign wealth funds, on Sunday launched a $142 million tech incubator, called Hub71, along with a $145 million fund dedicated to investing in those start-ups.
"It is a place, for the first time, that has all the key ingredients that those startups need to come together to support them to actually succeed," said Elham Alqasim, acting CEO at the Abu Dhabi Investment Office. Alqasim said the companies will also enjoy financial incentives and key government and regulatory support.
Softbank and Microsoft have not made any financial commitments to Hub71 but will have local personnel supporting the hub and its startups.
"Microsoft is proud to announce its collaboration ... to enable startups and entrepreneurs to develop, scale and build transformational businesses," Microsoft Gulf said in a tweet on Sunday. The tech giant will offer its services at preferential rates to startups at Hub71, Alqasim said.
Softbank CEO Masayoshi Son recorded a video message for the announcement.
"This is a ground-breaking project that will see technology companies, startups, academics and investors collaborating to create something truly exciting for the tech sector across the region and beyond," Son said in a statement.
Son has close ties with Abu Dhabi, which has contributed $15 billion into Softbank's $100 billion Vision Fund.
Hub71 will begin accepting applications in April and expects to have at least 100 startups over the next few years. It is set to rival neighboring Dubai, which already has several established hubs and is positioning itself as a regional pioneer.
Abu Dhabi is yet to have a notable start-up emerge from the city. High startup costs such as licensing, employee visas, and mandatory office space rental have often deterred entrepreneurs. Also, the region lacks early funding that attract big investors.
To combat some of the challenges, Abu Dhabi now offers a two year startup license for $700. That includes visas for up to 4 employees and no office space requirement. Hub71 will offer free housing, office space and health care for seed-stage tech companies and 50% subsidy packages for more established ventures.
"We want to make sure this is a non-issue in the early days for any disruptive technology ... we want to make sure there are no barriers in the early years," Alqasim told CNN Business.
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