Abu Dhabi city skyline, United Arab Emirates.
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ABU DHABI – Abu Dhabi is doubling down on its push into the technology sector with a $250 million investment to support start-ups from the Middle East and North Africa region.
Mubadala, Abu Dhabi’s state investment arm, announced Monday its new MENA tech funds will invest in companies and venture funds that help boost local tech incubator Hub71.
Hub71 was launched earlier this year as part of a broader effort by the government of the United Arab Emirates (UAE) to diversify its economy. Microsoft and SoftBank are also partners in the Abu Dhabi-based scheme. Hub71 offers incentives like office space and health care coverage to encourage start-ups to set up shop in the region.
States like Abu Dhabi and Dubai in the UAE, as well as other countries in the Middle East, are increasingly pumping funds into local tech ecosystems, in part to help reduce their reliance on oil-dependent industries.
“There’s a huge amount of untapped potential in the UAE and the wider region and we are on the right path to foster more home-grown innovations, attract exceptional talent and accelerate the evolution of a flourishing tech industry in the Emirate,” said Ibrahim Ajami, Head of Ventures at Mubadala Capital, in a press release Monday.
Ajami said the new MENA tech funds will build on Mubadala’s ten years of experience investing in tech companies from around the world. The state investor committed $15 billion to Softbank’s Vision Fund I, which has bankrolled tech companies like Uber, WeWork and Slack. Mubadala started its tech portfolio in 2007 with $770 million stake in U.S. chipmaker Advanced Micro Devices, which it sold last month after making $4.25 billion, according to Reuters.
The first investment of the new Middle East-focused funds went toward a Dubai-based start-up called Bayzat. Bayzat, which helps companies automate HR administration, was one of the first companies to set up its operations in Hub71.
Meanwhile WeWork is planning to launch its first space in the UAE next year in Hub71. The embattled office-sharing start-up postponed its IPO last month as investors raised alarms over the company’s big losses and the leadership of its now-ousted CEO Adam Neumann.