Sharjah's Sheraa aims to set up fund to invest in potential start-ups, CEO says

Exclusive: The entrepreneurship centre's first fund will focus on early-stage companies active in traditional as well as futuristic domains

Najla Al Midfa, chief executive of Sheraa, says the centre is looking for entrepreneurs who are committed to Sharjah, open to constructive feedback and are coachable. Pawan Singh / The National

The Sharjah Entrepreneurship Centre, a government-backed entity launched in 2016 with a mandate to build the entrepreneurial ecosystem in the northern emirate of Sharjah, aims to set up its own fund to invest in potential start-ups, its chief executive has said.

Sheraa’s first fund will focus on early-stage companies active in traditional as well as futuristic domains such as education technology, clean technology, sustainability, manufacturing and creative industries (art, literature, culture and museums), Najla Al Midfa told The National in an interview.

“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."

Currently, Sheraa does not take equity in the start-ups that it supports but it helps them to access funding through its corporate partners such as Air Arabia, Crescent Enterprises, Sharjah Media City and Sharjah Research, Technology and Innovation Park.

Through its upcoming fund, Sheraa aims to finance those sectors that are traditionally not drawing enough attention of venture capitalists.

“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, which means "to sail" in Arabic, is Sharjah’s initiative to develop a robust ecosystem for entrepreneurship and innovation.

Thus far, Sheraa supported start-ups have raised a cumulative total of $160 million in capital, generated more than $200 million in revenue, and created 1,600 jobs.

Sheraa, which has supported more than 160 start-ups since its inception, aims to increase this number to more than 200 next year. This is the number of start-ups that Sheraa has incubated, while the total number of companies under its umbrella is much 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.

Survival rate of Sheraa-incubated start-ups is nearly 70 per cent cumulatively, and in the past two years, it surged to 90 per cent.

Headquartered at the SRTIP, the non-profit government organisation also has innovation hubs at the American University of Sharjah and University of Sharjah.

Ms Al Midfa said Sheraa has managed to carve its own unique selling proposition as an entrepreneurial hub and complements neighbouring 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 been experiencing strong growth after its government took several measures to support businesses and residents to mitigate the effects of the Covid-19 pandemic.

The emirate's gross domestic product grew by 5.2 per cent last year, driven by economic diversification efforts that are aligned with the emirate's development strategy. It registered Dh136.9 billion ($37.2 billion) in GDP earnings last year compared with Dh130.1 billion in 2021, Sharjah's Department of Statistics and Community Development said in May.

Sheraa is also looking for entrepreneurs who are committed to Sharjah, open to constructive feedback and are coachable.

“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.