Venture capital is critical to the future success of not only the UAE but also the GCC. To understand this we first need to understand the historic formula for our success – oil leads to financial capital, which leads to real estate development, which creates social and business communities that attract people. Repeat.
Even if oil prices had not collapsed, sooner or later the size of the economy would reach a level at which oil alone could not deliver growth. We have not reached a point of reckoning because oil prices halved, that only accelerated the inevitable.
The conventional argument is that SMEs are the engine for growth in any economy. Some might argue that the global conglomerates coupled with global trade are the engines for growth. Whatever idea you subscribe to, in the end one has to accept that whether you believe SMEs drive economic growth or whether it is large companies, the first step is starting that company. Put simply, without start-ups an economy cannot normally achieve sustainable growth.
Oil and the exponential growth of our nascent economies short-circuited the natural route to start-ups – which is venture capital backing entrepreneurs who build those businesses. Similarly, massive government infrastructure spending, a normal phenomenon in growing economies, allowed for returns with near-zero risk, which, in turn, led to generations expecting rewards without understanding let alone taking risks. It is time to pay the piper and transition from government-led economic growth to private sector-led growth, and entrepreneurs backed by venture capital are the tip of the spear.
I have lived and worked in Abu Dhabi, Dubai, Bahrain and Riyadh as well as having done a lot of business in Kuwait. The best strategy that I have seen for this transition is Bahrain’s. The first interesting step was the founding of the Economic Development Board (EDB) under the direction of crown prince Salman bin Hamad Al Khalifa. As the name suggests, the EDB is tasked with developing the economy, but what is interesting, and quite different from its neighbours, is that the board is a mix of senior government officials and senior businessmen. The current chief executive, Khalid Al Rumaihi, is a veteran of Investcorp, the first major private equity player in the region and also based in Bahrain. Doing global deals but working with investors from across the region is basically the perfect profile to continue taking the EDB from success to success.
Equally interesting for Bahrain is that the previous chief executive of the EDB, Sheikh Mohammed bin Essa Al Khalifa, after having spent seven years building up the EDB from 2005-12, was in 2011 appointed chairman of Tamkeen, which focuses on building up the private sector component of economic growth. This continuity allows for the interlinking of important government initiatives. Just as importantly, recruiting fresh experience in the form of Al Rumaihi and rotating developed experience in the form of Sheikh Mohammed bin Essa helps to foster integrated innovation in developing the economy.
To my mind two of the most important steps that Bahrain has undertaken to make it easier for entrepreneurs to launch their start-ups are that costs are reasonable and regulations are effective and efficient.
Bahrain ignored building an infrastructure for rich global companies filled with regional sales teams. Instead, it built an ecosystem friendly to the VCs. Carlyle and KKR may be based in DIFC, but 500 Startups Middle East, part of the global VC firm, is based in Manama and run by a veteran of another regional Bahraini blueblood financial services firm, Sico.
The key for entrepreneurs, of course, is the availability of venture capital and for that the central bank of Bahrain has done an outstanding job of being well ahead of the curve in evolving its regulations to keep pace with the global developments.
The first time I set up a company I moved to Bahrain to do it, leaving the UAE because Bahrain was far easier to set up in and far better integrated from a business perspective to the dominant economy in Mena – Saudi Arabia. Competitive advantages for VCs to set up in Bahrain remain.
This brings us full circle to the UAE and the question of how VC is supported. Some point to the new VC law, but I cannot find a copy and every report that I have seen discusses funds, not the investment management companies that are necessary to incorporate and manage such funds. It is important that improving regulations for funds needs to be matched by improving regulations for the investment companies. This is why I support Bahrain’s method of first allowing a dialogue around business and second allowing investors and entrepreneurs a voice in such dialogues to complement the view of the technocrats.
Sabah Al Binali is an active investor and entrepreneurial leader with a track record of growing companies in the Mena region. You can read more of his thoughts at al-binali.com
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Third Test
Result: India won by 203 runs
Series: England lead five-match series 2-1
If you go
Flights
Emirates flies from Dubai to Phnom Penh with a stop in Yangon from Dh3,075, and Etihad flies from Abu Dhabi to Phnom Penh with its partner Bangkok Airlines from Dh2,763. These trips take about nine hours each and both include taxes. From there, a road transfer takes at least four hours; airlines including KC Airlines (www.kcairlines.com) offer quick connecting flights from Phnom Penh to Sihanoukville from about $100 (Dh367) return including taxes. Air Asia, Malindo Air and Malaysian Airlines fly direct from Kuala Lumpur to Sihanoukville from $54 each way. Next year, direct flights are due to launch between Bangkok and Sihanoukville, which will cut the journey time by a third.
The stay
Rooms at Alila Villas Koh Russey (www.alilahotels.com/ kohrussey) cost from $385 per night including taxes.
Mercedes V250 Avantgarde specs
Engine: 2.0-litre in-line four-cylinder turbo
Gearbox: 7-speed automatic
Power: 211hp at 5,500rpm
Torque: 350Nm
Fuel economy, combined: 6.0 l/100 km
Price: Dh235,000
THE SPECS
Engine: 3.5-litre supercharged V6
Power: 416hp at 7,000rpm
Torque: 410Nm at 3,500rpm
Transmission: 6-speed manual
Fuel consumption: 10.2 l/100km
Price: Dh375,000
On sale: now
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The%20specs
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Start-up hopes to end Japan's love affair with cash
Across most of Asia, people pay for taxi rides, restaurant meals and merchandise with smartphone-readable barcodes — except in Japan, where cash still rules. Now, as the country’s biggest web companies race to dominate the payments market, one Tokyo-based startup says it has a fighting chance to win with its QR app.
Origami had a head start when it introduced a QR-code payment service in late 2015 and has since signed up fast-food chain KFC, Tokyo’s largest cab company Nihon Kotsu and convenience store operator Lawson. The company raised $66 million in September to expand nationwide and plans to more than double its staff of about 100 employees, says founder Yoshiki Yasui.
Origami is betting that stores, which until now relied on direct mail and email newsletters, will pay for the ability to reach customers on their smartphones. For example, a hair salon using Origami’s payment app would be able to send a message to past customers with a coupon for their next haircut.
Quick Response codes, the dotted squares that can be read by smartphone cameras, were invented in the 1990s by a unit of Toyota Motor to track automotive parts. But when the Japanese pioneered digital payments almost two decades ago with contactless cards for train fares, they chose the so-called near-field communications technology. The high cost of rolling out NFC payments, convenient ATMs and a culture where lost wallets are often returned have all been cited as reasons why cash remains king in the archipelago. In China, however, QR codes dominate.
Cashless payments, which includes credit cards, accounted for just 20 per cent of total consumer spending in Japan during 2016, compared with 60 per cent in China and 89 per cent in South Korea, according to a report by the Bank of Japan.
Opening Rugby Championship fixtures: Games can be watched on OSN Sports
Saturday: Australia v New Zealand, Sydney, 1pm (UAE)
Sunday: South Africa v Argentina, Port Elizabeth, 11pm (UAE)
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Specs – Taycan 4S
Engine: Electric
Transmission: 2-speed auto
Power: 571bhp
Torque: 650Nm
Price: Dh431,800
Specs – Panamera
Engine: 3-litre V6 with 100kW electric motor
Transmission: 2-speed auto
Power: 455bhp
Torque: 700Nm
Price: from Dh431,800
About Housecall
Date started: July 2020
Founders: Omar and Humaid Alzaabi
Based: Abu Dhabi
Sector: HealthTech
# of staff: 10
Funding to date: Self-funded
Voices: How A Great Singer Can Change Your Life
Nick Coleman
Jonathan Cape
Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
HOW TO WATCH
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The specs
Engine: 5.0-litre V8
Power: 480hp at 7,250rpm
Torque: 566Nm at 4,600rpm
Transmission: 10-speed auto
Fuel consumption: L/100km
Price: Dh306,495
On sale: now
RESULTS
6.30pm Handicap (TB) US$65,000 (Dirt) 1,400m
Winner Golden Goal, Pat Dobbs (jockey), Doug Watson (trainer)
7.05pm Dubai Racing Club Classic Listed Handicap (TB) $88,000 (Turf) 2,410m
Winner: Walton Street, William Buick, Charlie Appleby.
7.40pm Dubai Stakes Group 3 (TB) $130,000 (D) 1,200m
Winner Switzerland, Tadhg O’Shea, Satish Seemar
8.15pm Singspiel Stakes Group 3 (TB) $163,000 (T) 1,800m
Winner Lord Giltters, Adrie de Vries, David O’Meara
8.50pm Al Maktoum Challenge Round-1 (TB) $228,000 (D) 1,600m
Winner Military Law, Antonio Fresu, Musabah Al Muhairi.
9.25pm Al Fahidi Fort Group 2 (TB) $163,000 (T) 1,400m
Winner Land Of Legends, Frankie Dettori, Saeed bin Suroor
10pm Dubai Dash Listed Handicap (TB) $88,000 (T) 1,000m
Winner Equilateral, Frankie Dettori, Charles Hills.
SPECS
Toyota land Cruiser 2020 5.7L VXR
Engine: 5.7-litre V8
Transmission: eight-speed automatic
Power: 362hp
Torque: 530Nm
Price: Dh329,000 (base model 4.0L EXR Dh215,900)