The Sharjah Entrepreneurship Centre, a government-supported organization established in 2016 to nurture the entrepreneurial environment in the northern emirate of Sharjah, has expressed its intention to establish a dedicated fund for investing in promising start-up ventures, according to its chief executive.
Sheraa’s inaugural fund will concentrate on early-stage firms engaged in both conventional and forward-looking sectors, including educational technology, clean technology, sustainability, manufacturing, and creative industries encompassing art, literature, culture, and museums, as Najla Al Midfa revealed in an interview with The National.
“When we started, we wanted to build a very founder-friendly ecosystem and aimed to support as many founders as possible. Simultaneously, it was also our own journey to build credibility and trust as an incubator,” Ms Al Midfa said.
“Now we are at an inflection point where people know who Sheraa is, they know our integrity and they recognise what Sheraa and Sharjah can offer to start-ups and entrepreneurs. We believe we are at a stage where we can say we want to invest in your [start-up’s] journey, continue to have skin in the game and be a part of your growth.”
Sheraa Supports Start-ups Without Equity Ownership
Presently, Sheraa does not acquire ownership stakes in the start-ups it assists. Instead, it facilitates their access to funding via corporate collaborators like Air Arabia, Crescent Enterprises, Sharjah Media City, and Sharjah Research, Technology and Innovation Park.
With its forthcoming fund, Sheraa intends to provide financial support to sectors that typically receive limited attention from venture capitalists, according to The National News.
“There is no point if we fund the areas where VCs are already investing … for example, e-commerce and FinTech. We do not want to replicate the same thing that already exists. We are here to fill [the] funding gaps …[we are] developing an ecosystem to connect those potential dots that are disruptive but ignored by others,” Ms Al Midfa said, without disclosing the size of the fund or its launch timeline.”
“Things are at very early stages of discussions, and currently, there is no figure in mind. But it will be big enough to make some reasonable size investment,” she said.
Sheraa’s Remarkable Start-up Survival Rates
Sheraa, an Arabic term signifying “to sail,” represents Sharjah’s drive to cultivate a thriving environment for entrepreneurship and innovation.
To date, start-ups nurtured by Sheraa have successfully secured a combined sum of $160M in investment, yielded over $200M in revenue, and generated 1,600 job opportunities.
Since its establishment, Sheraa has provided support to over 160 start-ups, with plans to increase this figure to over 200 in the upcoming year. It’s worth noting that this represents the number of start-ups incubated by Sheraa, and the total count of companies under its purview is even higher.
“We have a thriving ecosystem … we also opened our community to SMEs to become more inclusive. The whole community is expected to grow [to] over 500 to 600 members next year,” Ms Al Midfa said.
“Almost 52 per cent of start-ups are founded by women entrepreneurs, which is very rare in the industry… this is part of our ethos that we want to be inclusive in all respects … Globally, only 2 per cent of the VC funding goes to female-led ventures, but in our case, over 15 per cent goes to them.”
“We don’t want only men that are ex-Harvard or ex-McKinsey but [also] have as diverse portfolio as possible,” she added.
The survival rate of start-ups that have been nurtured by Sheraa stands at nearly 70 percent in total, and over the past two years, it has risen significantly to 90 percent.
Sheraa’s Strategic Locations in Sharjah
Situated at the Sharjah Research, Technology and Innovation Park (SRTIP), this non-profit government entity also operates innovation centres at the American University of Sharjah and the University of Sharjah.
Ms Al Midfa noted that Sheraa has effectively established its distinctive value as an entrepreneurial hub, effectively complementing its neighbouring counterparts in Dubai and Abu Dhabi.
“Over the past few years, we have become much clearer about our identity as an entrepreneurial hub … how Sharjah is different from other cities. It certainly complements Dubai and Abu Dhabi. We have realised our strengths and are capitalising on those niche areas,” she said.
“In Sharjah … we have many strong value propositions. If an entrepreneur is looking for a good lifestyle, a great pool of talent, affordability and a culturally-rich as well as a family-orientated city, then Sharjah is the place,” Ms Al Midfa said.
Sharjah has witnessed substantial growth following its government’s implementation of various measures to assist businesses and residents in mitigating the impact of the COVID-19 pandemic.
Sharjah’s GDP Surges 5.2% in Line with Diversification Strategy
The emirate’s gross domestic product (GDP) expanded by 5.2 percent in the previous year, driven by diversification efforts that align with Sharjah’s development strategy. According to the Sharjah Department of Statistics and Community Development’s report in May, it recorded AED 136.9B (equivalent to $37.2B) in GDP in the previous year, an increase from AED 130.1B in 2021.
Sheraa is also actively seeking entrepreneurs who are dedicated to Sharjah, receptive to constructive feedback, and open to coaching.
“We are not playing a real estate game … for example, just get a licence and open an office … but we want a commitment [from entrepreneurs] to give back to the next generation in Sharjah. We will coach them and want them to engage with local youth, educational institutions and businesses,” Ms Al Midfa said.
Besides global VCs, Sheraa is also trying to attract family offices, according to Ms Al Midfa.
“The real wealth in this region sits with family offices, so a real question for me is how you tap into these local investors to unlock some of that wealth and have it turned towards start-ups. Family offices may not be allocating a lot of money to it at the moment but I think they are more open to it,” she said.