Opportunity (and big bucks) knocks at Qatar's newest incubator
The trend towards entrepreneurship is so popular that it is now at a point of influencing economic policy. Not only is it stimulating the community economically, but also intellectually. And, with startups at the heart of entrepreneurship, it is crucial to ensure their sustainability and success. As a result efforts are being made for their support through the implementation of incubation.
Studies have shown that 87% of startups which were incubated, have succeeded and survived, while only 44% of those that were not incubated, made it. In a move to foster this approach Arab government have been collaborating with the private sector to establish incubators in the region.
In Qatar the government has worked with Qatar Development Bank (QDB), and the Social Development Center (a member in Qatar Foundation), to establish the Qatar Business Incubation Center (QBIC).
The QBIC, which was inaugurated in March of this year, and falls into the overall plans of Qatar National Vision 2030, is the biggest mixed use incubator in the Middle East, nurturing startups in the technology and industrial fields.
“The goal is the graduation of Qatari companies with a market value of more than 100 million Qatari riyals (QR) (around $27 million USD),” says QDB’s Chairman and CEO Abdulaziz bin Nasser Al Khalifa. Over the next three years he tells Wamda that the plan is to have 150 Qatari companies graduate.
Implementing entrepreneurial ideas
The QBIC, which also includes an accelerator, enables entrepreneurs to build and expand their businesses with a range of services. Providing office spaces, industrial workshops, plus administrative and technical assistance, they will help existing startups, as well as new ideas that need to get off the ground within 10 weeks. Prior to Phase 1 of QBIC’s LeanStartup program, the incubator holds lectures and conferences where new ideas and their sources of inspiration are discussed.
While the QBIC might be similar to other incubators it does stand apart by pushing the entrepreneurs into the market to meet clients, partners, competitors, and others, using a business model and a customer development model checklist to validate their business models. After developing their products in line with the market’s requirements, every team pitches its project before a jury and a panel of potential investors, where one project is selected at the end of this phase to be admitted at QBIC.
“We follow many selection and filtering stages that comply with certain standards, “says Omar Aloyoun, the Director of Marketing and Business Development, “based on the idea’s maturity, scalability, and readiness to success.” Their latest pitching day, as part of phase 2 of the LeanStartup program, which sees ideas hopefully blossom into startups, was this week.
Services and funding
Services provided by QBIC include legal assistance, training, organization of media relations, and protection of industrial and intellectual property through patents. It also holds lectures and seminars in which many experts and lectures from the region and the whole world offer the best they have.
When it comes to funding Aloyoun says that it changes from case to case. The money can come straight from the incubator in the form of conditional seed funding at around 100,000 QR ($27,000 USD) in the first three months of incubation. If a company makes it in Phase 1 they can then get up to 200,000 QR ($55,000 USD), with the total in Phase 1 reaching 300,000 QR ($82,000 USD). Companies can also recieve another funding round in the Phase 2 (six months after) amounting to 300,000 QR.
As the startups grow the incubator secures for them events at which to network with potential investors. It also helps any venture looking to scale by enabling it to apply for a loan from the QDB through the AlDhameen program. These can see startups receive up to 4 million QR ($1 million USD).
A rather nice bonus to receiving funding directly from the incubator is that the startups are not expected to repay the QBIC if they keep them as a shareholder in the company. Shares can also be bought back at any time at a fixed rate of 5%.
Supporting entrepreneurs and stimulating the economy
While the incubator does favor startups of Qatar origin it does welcome applications from any entrepreneur living in Qatar or abroad, the only caveats being that they should be willing to relocate to Qatar for the duration of their incubation, and to enter intero a partnership with a Qatari citizen. “[This is done] in order to develop the Qatari economy and to give Qatar a competitive edge,” say Aloyoun. “The aim is to develop Qatar’s competitiveness and to educate companies on Corporate Entrepreneurship Responsibility (CER).”
So far the incubator has received around 200 applications from which it has accepted 15 startups that have already graduated from the LeanStartups program’s Phase 1. Eight startups have also won prizes at competitions held by Enterprise Qatar and Injaz. “The Qatari ecosystem is developing quickly,” says Aloyoun. “So, the Qatari market strongly needs such a mixed entrepreneurship center.”
Some of the graduating projects
- System of Systems SOS: software that provides Enterprise Resource Planning (ERP) and synchronization with other software such like Microsoft or Google. It aims at enabling a business to share and collaborate on documents.
- Q-CAB: a smart phone app through which you can order and pay for taxis. Now in a beta testing stage.
- S'Ishira: a luxurious perfume made from organic materials. Currently sold in Japan and some European countries.
- Oryxlifestyle: a clothing brand that will be partnering with a German company to supply Bundesliga team logo’d clothing to the region.
