Sheraa CEO Najla Al Midfa Announces A US$1 Million Fund To Support Startups Amid The COVID-19 Crisis
Free Book Preview Money-Smart Solopreneur
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
Honoring the #UbuntuLoveChallenge, a global initiative spearheaded by H.E Sheikha Bodour bint Sultan Al Qasimi and Mamadou Kwidjim Toure, founder of the Africa 2.0 Foundation, Sharjah Entrepreneurship Center (Sheraa) has pledged a US$1 million dollar solidarity fund to help startups that are under strain due to the coronavirus pandemic.
The fund, which is being issued in place of Sheraa’s annual events that will not be taking place this year, will be distributed through equity-free grants and commissioned projects. “The exact details of the allocations, including how to apply for access to the funding, will be released in the coming weeks,” says Najla Al Midfa, CEO, Sheraa. “In the meantime, we are conducting a survey to assess our startups’ needs, and where their specific challenges and fundraising requirements lie.”
The fund is based on three pillars. Firstly, it will provide emergency funding in the form of grants to startups, which have been significantly impacted by the crisis, despite their strong business models and positive longterm outlooks. Secondly, the fund will be used to provide project-based contracts to startups, for products and services procured either by Sheraa or by its partners in Sharjah. Al Midfa explains that a great example of this is the recently announced partnership between Sharjah World Book Capital and one of Sheraa's startups, Kitab Sawti, who produce Arabic audiobooks. Thirdly, one part of the fund will be used to support startups developing solutions that either directly address the COVID-19 pandemic, or that will help the world thrive in the post-COVID world, such as startups in health tech, logistics, education, and employment.
All Sheraa startups, Al Midfa explains, have been forced to rationalize their cost structures, including shifting to the use of freelancers and part-timers, which has brought its own set of challenges when it comes to finding the right talent. In some cases, startups have had to entirely pivot their business models in order to survive, she says. “Sheraa’s B2B startups in particular are struggling in the COVID-19 era— contracts which are already signed are now being cancelled, incurring heavy costs in addition to the loss of income,” Al Midfa adds. ”3Dinova, for example, which originally provides 3D workshops to students, has been especially impacted by the closure of schools. They now offer at-home services, and have also expanded its offerings to help university students unable to complete their 3D design projects due to labs being closed.”
However, startups in sectors such as education technology, digital health and wellness, logistics, and e-commerce are seeing much higher consumer activity and now face the challenge of keeping up with the rising demand. “Putting in the right digital and logistical infrastructure in place that can keep pace with the market’s needs is now top priority,” Al Midfa says. “Fortunately, while the pool of capital available to startups may generally have shrunk, it is the businesses in these sectors that will most likely be able to attract investment, and continue to grow during the post-COVID era.”
Lastly, Al Midfa points out that the biggest impact on entrepreneurs is in fact the human impact. “These uncertain times have brought with them anxieties that we have never had to deal with before, from the constant fear of physical infection, and the toll it has taken on so many lives around the world, to the realities of lockdown and the restrictions that come with it,” Al Midfa says. “Entrepreneurs are especially vulnerable because not only are they dealing with these mental and emotional traumas, but they are doing so while coping with the ramifications of the COVID-19 pandemic. Founders will need a network of support to help ensure they are not forgetting to take care of themselves in the mission to keep their businesses running.”
Al Midfa concludes with some advice for startups grappling through the COVID-19 crisis. “The reality is that entrepreneurs are going to have make some tough decisions in the coming weeks and months," she says. "To that end, crucial and practical advice on things such as improving unit economics, cutting costs, finding paths to profitability, and seeking market opportunities is everywhere. But I would also advise more startups to consider merging or partnering with other ventures where they can. By working together, not only can you share resources, but also share costs, reducing the burden all around. If there’s one thing this pandemic has taught us, it is that we are all interdependent, so now is the time to build on that interconnectedness for the good of the whole ecosystem. My other piece of advice would be to remember to be kind, both to yourself and to those around you. No one was prepared for this scenario, and we are all coping as best we can. If you find yourself struggling, then reach out to mentors, other founders, investors, and supporters like Sheraa to ask for help.”