Sharjah startup scene gains traction

Entrepreneurship centre Sheraa is leading a push to turn the emirate into a hub for regional talent and fast-growing startups

Sometimes lightbulb moments happen in the most unexpected places. For Sheikha Bodour bint Sultan bin Muhammed al Qasimi and Najla al Midfa, it was during their descent from the summit of Mount Kilimanjaro in February 2015, as the pair hashed out a plan to propel UAE youth into the workplace. Their answer was the Sharjah Entrepreneurship Centre (Sheraa), conceived as a way to tap the emirate’s 25,000-strong student population and equip them with the skills to succeed as entrepreneurs.

Almost two years since Sheraa’s launch, the state-backed incubator and accelerator has seen 4,000 budding entrepreneurs access its services. Some 150 ideas have passed through its incubation stage, 30 of which have moved into the accelerator phase. Ten of these are now fully-fledged startups, with a further 10 due to ‘graduate’ before the end of the year.

“Sharjah has a critical mass of talent, and we really see it as an opportunity,” says Al Midfa, general manager of Sheraa. “[These are] people who can not only move the needle in terms of creating enterprises that generate jobs for future generations, but in terms of economic development.”

"Education systems around the world need to be overhauled"Incubators are now commonplace in cities around the world, acting as go-betweens for early-stage entrepreneurs, funders and mentors and as catalysts for the wider economy.

In the Middle East, where youth unemployment is near to 30 per cent, some see a thriving startup scene as an antidote to a bloated public sector and slowing job creation. But there are obstacles to carving out a startup culture in a region beset by outdated education systems, and where graduates are often unprepared to enter the labour market.

“In general, the education systems around the world need to be overhauled, and I say that quite openly, even being based in a university,” Al Midfa says. “The typical graduate today has not got the skills that make them very employable: the critical thinking, the problem solving, the communication, the teamwork – all of these are missing,”

Sheraa’s mission is two-fold: to nurture young talent by giving students the skills required to make them more employable after they graduate; and to connect fledgling entrepreneurs with office space, seed funding, and the ability to turn an idea into a commercial reality.

The latter spans a three-tier programme, covering ideation, incubation and acceleration. Entrance into each subsequent phase is not guaranteed, says Al Midfa.

“We don’t want to be creating companies just for the sake of it. We really want to be creating companies that can ultimately grow to be like Careem, that not only move the needle in terms of economic development, but also create jobs for the region.”

She is realistic about success rates. “Our conversion rate from incubator to accelerator is fairly low. In the current batch there is only one team that progressed to the accelerator. We want to get to the point where 50 per cent of the accelerator is coming from the incubator.”

While the average age of those entering the incubation programme is 23-24, applicants to the accelerator are generally in their mid-30s. Startups receive a $10 -15,000 cash grant, and retain their equity.

Aside from its government funding, Sheraa has partnerships with three private Sharjah-based companies: low-cost carrier Air Arabia, waste management firm Bee’ah, and multinational Crescent Enterprises, who together have provided AED1m (about $270,000) over two years.

Two more deals are to be announced this week, as part of Sheraa’s first entrepreneurship festival, taking place in Sharjah. Sheraa’s overall goal is to have its programme costs borne by the private sector, and the staff costs shouldered by the government.

As well as financial support, these private partners also offer sponsored programme tracks in their industries, while providing mentoring services and career guidance.

“If you speak to the majority of these companies,” says Al Midfa, “they no longer believe in just pure sponsorship. They really want to be actively involved with the company creation.”

"We want to become like a landing pad for any entrepreneurs from around the UAE or region"Beyond breathing new life into the region’s job market, Sheraa seeks to position Sharjah as a hub for disruptive companies. Low setup costs compared to neighbouring Dubai and Abu Dhabi, the emirate’s large student population, and state-backed support for the startup scene are among the elements underpinning this push.

In January, Sheraa will unveil another, much larger, coworking space in the University of Sharjah. New headquarters to house staff and graduating accelerator teams are also in the pipeline.

“We want to become a landing pad for any entrepreneurs from around the UAE or region, who want to tap into the Sharjah market,” says Al Midfa. Startups in the incubator can access licences for as little as AED4,000.

Whether or not Sheraa gives rise to the region’s next unicorn, the skills imparted by the incubator will be essential for future graduates.

“I think the future is really the gig economy,” says Al Midfa. “We need to make sure that the youth of today not only have the skills required for the 21st century workplace, but also are able to solve – and I consider this a regional problem – challenges like unemployment through job creation and building new companies that can be the engines of growth.”

Their biggest challenge, says Al Midfa, is how to roll out the programme.

“How do you scale a project like Sheraa, that you know is the solution, to really impact that region? Or at least to impact the entire UAE. These are the kinds of questions that really keep me up at night.”