DIFC FinTech Hive

Technology + Innovation in the Financial Sector = FinTech

As UAE celebrates the Year of 50,  it is important to note how far we’ve come. Historically the Dubai economy was dependent on oil and gas, and accounted for 50% of its GDP in 1985. This dropped to 25%  of GDP in 1993, and in 2019 it was down to 5% ! Amongst other things they key driver for this shift has been technology and innovation in the financial sector.

DIFC has always had a very pragmatic approach and this is evident with the establishment of the FinTech Hive. The ambition was to create the first fintech unicorn in the Middle East through the DIFC Fintech Hive. A framework was developed to run accelerator programs, and the attraction was the collaboration with leading banks and insurance companies.

Hive had developed a framework to invite start-ups to compete for 12 week program and the accelerator program gave them the opportunity to develop, test, modify their innovation and upgrade to PoC (Proof of Concept is evidence from pilot project that demonstrated that the business proposal was feasible) It had to be reactive approach where solutions for existing problems were addressed with innovative solutions.

This proved very popular, and The Hive received 110 applications from all over the world, and after an intense selection process, 11 start-ups were invited to pitch their ideas in front of an audience, the banks, the investors and the regulators, one such start up that made it to Proof of concept was Bankbuddy which focused on AI in banking.

With this the Hive kept evolving its strategy, and the Regulator role was defined further, and a sandbox license was launched and this was called Innovation Testing License. This was very happily received because it allowed virtual space for a new business idea or model to be tested, considering the limited number of customers and transactions. Further to the PoC Sarwa (Sarwa which focused on robo-advisory and its case study will be reviewed in the workshop) also obtained an Innovation Testing License.  

The time to reap the fruits of Fintech Hive came with Investor Day where all the start-ups presented their concepts to venture capitalists, funds and angel investors (referred to high net worth individulas who provide financial backing for small start-ups or entrepreneurs) 

To facilitate the start-ups eco-system, DIFC Fintech Hive decided to provide a co-working space (which is where the workshop will be held)

Fundraising needs will always be the heartbeat of the Fintech Hive. Early stage fund focused on seed funding which is the first official money that a business venture raises. Followed by Series A which is the first round of funding for a sbuiness through investment, including private equity and VCs.

One of the key unique features of DIFC Fintech Hive is the launch of the $100 million Fintech Fund, which projected the support for fintech in this region. Investment decisions for this fund, would be alongside other VCs, funds, and government entities.