Two Israeli companies join $545m innovation program in Abu Dhabi

OurCrowd to open VC office, AI tech hub in UAE; fintech company Liquidity Group, a fund manager, will set up R&D center as part of a government incentive scheme for global outfits

Two Israeli companies will be opening new offices in the United Arab Emirates as part of a $545 million government incentive program for innovation-focused firms in high-growth sectors such as agtech, IT, health services and biopharma, and financial tech and services (fintech).

Israel-headquartered global venture firm OurCrowd said Wednesday that it would be expanding its existing operations in the UAE with a venture capital (VC) office in Abu Dhabi and an artificial intelligence (AI) tech hub as part of a new agreement. On Tuesday, Israeli fintech company Liquidity Group said it signed a deal to open an R&D center in the UAE.

Both agreements were announced during Abu Dhabi Finance Week 2022.

OurCrowd and Liquidity are taking part in a program, launched in 2020 through the Abu Dhabi Investment Office (ADIO), that offers financial and non-financial incentives for global companies to expand their intellectual property in Abu Dhabi. The government says the program is meant to fuel the development and diversification of the economy.

The two Israeli outfits will join over three dozen companies from across the world that have taken part in the program over the past two years. The UAE has positioned itself as “a gateway for financial services companies to expand, serving as a bridge between time zones, while providing a favorable regulatory environment via the Abu Dhabi Global Market (ADGM),” according to an ADIO description.

OurCrowd received a license to operate in the UAE last November, becoming the first Israeli venture capital firm to be approved by the ADGM, the international financial center in the capital. The company also opened a local branch, OurCrowd Arabia headed by Dr. Sabah Al-Binali, in 2021 to manage deals for its existing platform and cater to emerging markets.

This development came months after the US-brokered Abraham Accords were signed in September 2020, normalizing relations between Israel and the UAE, Bahrain and Morocco. The accords created a buzz of excitement regarding the potential for economic cooperation and trade relations, particularly in the field of technology. In late May, Israel and the UAE signed a free trade agreement to boost economic tied as trade hit about $2.5 billion by then.

ADIO opened an office in Tel Aviv last April and has a number of agreements with Israeli entities and institutions, including the Israel Export Institute, to strengthen the foundations for bilateral trade and investment with Israel.

OurCrowd first announced plans to launch an AI innovation center in Abu Dhabi earlier this year. The center is set to provide finance-focused, AI-based research as a service for clients. OurCrowd will be working with ADGM’s Hub71, a tech platform backed by the Emirati sovereign wealth fund Mobadala Investment, to launch the center, dubbed Integrated Data Intelligence (IDI) and develop AI solutions for businesses.

OurCrowd said the expansion moves will see the company grow its team based in Abu Dhabi to 60 over the next four years, as part of a $60 million investment by the company in the emirate.

The AI company, IDI, will be headed by Dr. Hasanat Dewan, a former executive with global financial institutions such as BNY Mellon, Merrill Lynch, Deutsche Bank and Morgan Stanley.

Acting director-general of ADIO, Abdulla Abdul Aziz AlShamsi, welcomed the agreement with OurCrowd and said it was “a great example of a company that has benefitted from Abu Dhabi’s enabling ecosystem to achieve accelerated growth.”

“In just a year, OurCrowd has moved from an initial license to an established market player, with its new investment center and tech hub bringing additional VC and tech specialism to Abu Dhabi and expanding the availability of solutions and technology to companies,” he said.

OurCrowd CEO and founder Jon Medved said “the World Economic Forum ranks the UAE first in the world in best e-infrastructure and macroeconomic stability, and the third most-trusted government. These factors, with numerous other advantages including global talent and market access, underscore why Abu Dhabi is now home to OurCrowd Arabia and OurCrowd’s new AI spinoff, and why we will continue to invest in the innovation infrastructure and talent in the country.”

Liquidity Group (also Liquidity Capital) also said it is joining ADIO’s innovation program with plans to build an R&D center in the UAE capital.

Founded in 2017, Liquidity Group is a fund manager providing growth capital through funds focused on the US, Asia and the Middle East. It also developed a data tool that uses predictive algorithms to assess potential companies for investment, and is backed by Mitsubishi UFJ Fund Services, Israeli institutional investor Meitav Dash Ltd., Israel’s Discount Bank and Israeli insurance giant Harel.

Liquidity said its R&D operations in Abu Dhabi will help develop the company’s proprietary technology-enabled underwriting algorithm as well as build a team to focus on machine learning for enterprises that will support other startups within Abu Dhabi in applying Liquidity Group’s modeling methodologies. In addition, Liquidity will work with Abu Dhabi-based universities to develop educational training programs and machine learning certifications, according to the announcement.

The agreement was signed on Tuesday by AlShamsi and Liquidity CEO Ron Daniel during ADFW 2022.

It came almost two years after Liquidity set up a joint $100 million venture debt investment fund with Dubai-based Vault Investments. Venture debt investment is debt financing that is provided to venture-backed firms to fund working capital or other expenses, like sales and marketing. Debt financing occurs when a firm raises money for working capital or capital expenditures by selling debt instruments to investors.

ADIO’s AlShamsi said in a statement that Liquidity will make “a strong addition to Abu Dhabi’s financial services ecosystem, bringing its robust expertise in Machine Learning to grow the venture financing landscape.”

“With a focus on locally relevant and globally exportable solutions, the technology developed in the emirate will help to support startups in Abu Dhabi and the region. ADIO’s partnership with Liquidity Group also serves to deepen the relationship between the UAE and Israel, as the two markets pursue innovation-driven technologies and activities with far-reaching impact,” he added.

Daniel, CEO of Liquidity Group, said that “beyond the personal excitement of fulfilling the Abraham Accords in real life and growing networks, friendships and partnerships in the UAE, I have always believed that the UAE and ADGM, in particular, are the best places in the world to scale tech companies. Thanks to our partners at ADIO, our new R&D center in ADGM is growing fast and is swiftly being populated with some of the best global brains.”

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