Abu Dhabi’s Hub71 unveils new ecosystem to support Web3 start-ups

Abu Dhabi global technology hub Hub71 has unveiled a specialist ecosystem to hasten the growth of Web3 start-ups.

Hub71+ Digital Assets will give Web3 start-ups access to all stakeholders, such as venture capital companies, customers, technology providers, blockchain platforms and the regulator, the Abu Dhabi Global Market.

“Just like we built a global tech ecosystem, we wanted to start creating sub hubs that focus on specific sectors,” said Peter Abou Hachem, head of strategy and product at Hub71.

“Our anchor partners for the new ecosystem are Hub71, ADGM and First Abu Dhabi Bank. In the ecosystem, start-ups will also have market access in the form of customers or corporations, VCs [venture capital firms] that invest in Web3, blockchain platforms, technology providers like Amazon Web Services and Mastercard, and digital asset exchanges like MidChains and Binance that will facilitate the trading and custody of digital assets.”

Venture capital funds will initially offer $2 billion worth of investment, with plans to further grow the investor network for digital assets.

FAB will identify Web3 startups, entrepreneurs and breakthrough technologies to help it reimagine financial services in the metaverse, according to Hub71.

Web3 is the emerging third generation of the World Wide Web, with blockchain, decentralisation, openness and greater user utility among its core components.

Its market size is expected to be valued at about $6.2 billion in 2023 and grow at a compound annual rate of 44.6 per cent from 2023 to 2030, according to Market Research Future.

Hub71, backed by the Abu Dhabi government and sovereign wealth fund Mubadala Investment Company, has more than 200 start-ups that raised more than $1 billion in funding from 30 VCs and generated close to $800 million in revenue since its launch in 2019.

The highest amount raised by a start-up after joining Hub71 stands at $1.9 million, while the average funding is $463,000.

Hub71+ Digital Assets will soon open the application process for start-ups in the Web3 industry, said Mr Hachem.

The ecosystem will support start-ups at the concept stage, as well as those that are seeking to scale up.

“We look at how experienced and qualified the founders are, [their] product market fit and fund-raising by the start-up. We leverage insights from our partners to know which start-ups can be regulated,” he said.

Once accepted into the ecosystem after the vetting process, the start-ups will have access to the partners, including technical professionals, to support growth.

They will also be eligible for Hub71’s $150,000 government grant that can be used to reduce a start-up’s operational costs, such as those linked to hiring lawyers, building a website or leasing office space or housing for employees in Abu Dhabi, Mr Hachem said.

Dedicated venture capital firms will help start-ups raise funds in line with the way the industry works in Web3, while technical engineers will support them to build on the blockchain infrastructure.

“We have seen a lot of Web3 companies come to Abu Dhabi from Singapore, Hong Kong, Switzerland and Miami,” he said.

“Hub71+ Digital Assets signifies that Abu Dhabi is open to disruptive businesses driving forward change and transformation on a global level,” Ahmad Ali Alwan, deputy chief executive of Hub71, said.

The selected start-ups can also use Hub71’s global partnerships with similar centres to help in their expansion.

“Any new technology requires all the right stakeholders to be together. We aim to bring them together to de-risk the industry and discuss its future,” Mr Hachem said.

All new technology faces challenges when it comes to adoption, ranging from a lack of talent required to build the platform to regulation failing to keep up, he said.

“Having the regulator on board offers reassurance to any investor that start-ups are vetted from a regulatory perspective.”

The new ecosystem will help start-ups and digital assets to benefit from ADGM’s diverse ecosystem and progressive regulatory environment, according to Dhaher Al Mheiri, chief executive of the free zone.

Hub71 also plans to soon unveil specialised ecosystems for health technology and life sciences, and climate technology.

“We align our focus sectors with the Abu Dhabi Executive Office and the wider economic vision,” Mr Hachem said.

Hub71+ Digital Assets will contribute to supporting the UAE Digital Economy Strategy, which aims to double the contribution of the digital economy to non-oil gross domestic product to more than 20 per cent within 10 years, according to the tech hub.

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