The following blog post summarizes key insights shared by panelists during a discussion at our AGM event last month. The discussion was moderated by our Investment Director Amer Fatayer and the panel participants included:
- Mohammed Shael Alsaadi, CEO of Dubai Corporation for Fair Trade and Consumer Protection
- Fadi Ghandour, Co-founder of Aramex and Executive Chairman of Wamda
- Christian Kuntz, Chief Strategy, Innovation & Ventures Officer at DIFC Authority
The need for regulation
Mohammed Shael Alsaadi opined that every city comes to a point where it stagnates and is in need of government intervention in the form of business and policy regulations — an inevitable factor of growth in order to have consumer protection and order. This is where the private sector needs to be assisted and is where the relationship between the private and public sectors needs to be looked at.
Here, effective policies will enrich this relationship, making it better for everyone in the long run. Dubai’s IP Law, for example, was set in place by the Dubai Future Foundation in the hopes of it driving intellectual property registrations.
Consumer protection, one of Mohammed’s organization’s specializations, is another area that regulators must focus on, since good consumer protection builds trust between the consumer and their city.
Encouraging competition across industries
Mohammed believes that the B2B sphere is the essence of fair trade. If an economy wants to sustain itself, Mohammed says, it must control the power balance, which means smaller companies must be protected from larger ones. In addition to protecting small businesses, corporations must also make it a point to encourage other larger companies to work with SMEs.
Mohammed concludes that it’s the governmental entities’ responsibility to be the glue in forming the bond between these all companies, regardless of sector or size.
Further, policies formed by the private sector should be formed with the needs of businesses in mind. While some may be more tangibly beneficial than others, the government needs to look at benefits that impact all businesses in order to form a truly strong economy. Mohammed encouraged the public sector to listen to the private sector and modify its policies over time.
“Listen more than talk.” Mohammed Shael Alsaadi, CEO of Dubai Corporation for Fair Trade and Consumer Protection
Consider founders’ needs
Fadi Ghandour shares his opinions on what he believes are the startup community’s needs, being an active investor and former startup founder himself:
- The need for access to capital,
- The need for access to markets,
- The need for a regulatory environment that enables founders to hit the ground running with the minimum amount of friction.
Unfortunately, the last part hasn’t been solved yet, Fadi says. While significant improvements have been made over the years, the environment is far from smooth sailing and there is still perceived friction that does not allow startups to achieve the serious fast growth they have the potential for. Fadi believes that the solution to this is to encourage better dialogue amongst the ecosystem — between venture investors, government regulators, and startups.
According to him, startups are ready with money but cannot achieve the growth required because of this friction. Fadi gives an example of the business licensing process being one area of common friction.
In his opinion, there needs to be an institutional framework where there is a seat at the table for everyone to address their issues, and the people are this table must be empowered to drive solutions to the biggest issues brought forward, while making sure to keep clear expectations and realistic timelines in mind.
The tech vertices driving the ecosystem at present
Christian Kuntz shared that venture capital investment in the UAE has reached remarkable milestones to date — crossing the USD 1 billion mark. In the DIFC alone, the number of startups grew from 200 in 2020 to 700 in 2023, with the total number of startup employees increasing from 400 to 2,200 people during this time frame.
As for the startup sub-sectors that are fueling this growth, Christian expects that 60% of future growth amongst startups in DIFC will come from the Future of Finance or Future Economies space. That being said, Christian also called for more investment in companies that are non-global, don’t have much traction, are financially risky, but are, nevertheless, extremely important for the wider ecosystem in the long-term.
The government’s role in empowering risk-taking
In addition, Christian emphasized the need for a change in risk appetite in the startup community, and that it is not enough to only view risk in terms of financial risk. That is to say, a business can fail due to its lack of connection and community with the entities it works with. So, the DIFC has evolved its definition of risk to include enterprise risk, and tries to work together closely with every single one of them for maximum benefit.
Christian shared that he believes the main role of governmental authorities should be to empower, enable, listen, and create initiatives and regulations that balance opportunity with other considerations that private profit-motivated investors won’t always look at. He also stresses the need for the government to be a role model in setting good government standards. In his opinion, the key to this is to bring everyone together, drive awareness and understanding, educate, and, of course, funnel the funding and the right policies to make it happen.
“We need to change our view of risk — the risk is much bigger to not build fast enough.” Christian Kunz, Chief Strategy, Innovation, and Ventures Officer at DIFC
Top 3 takeaways
In conclusion, the panel agreed that the government and private sector need to unite to serve the wider venture community and:
- Increase and widen the risk appetite towards startups across all stages, from ideation through to growth,
- Create a space to have an open dialogue with regulators and authorities to help improve the ecosystem,
- Be able to make a larger impact by continuing to drive growth in the VC ecosystem.
At DFDF, we strive to be a driving factor in the unification of government and private sector towards a prosperous venture ecosystem locally and regionally. We firmly believe that the unification of government and the private sector is essential to creating a vibrant venture ecosystem that benefits both local and regional communities. By collaborating closely with key stakeholders and leveraging our expertise and resources, we aim to drive innovation, stimulate economic growth, and create new opportunities for entrepreneurs and investors alike.
If you share our vision and would like to be a part of the journey, please get in touch — we’d love to hear from you. We are always looking for like-minded individuals and organizations to join forces with and help us shape the future of the venture landscape.