New Dubai incubator launched to develop the Islamic economy’s first global brand

Photo: Goodforce Labs was launched on February 25, 2018 at the Dubai Airport Free Zone (DAFZA). From left to right: Sayd Farook, vicechairperson of the Responsible Finance & Investment (RFI) Foundation; Rafi-uddin Shikoh, CEO of Dinar Standard; Nasser Al Madani, Assistant Director General of DAFZA; and Saeed Kharbash, Deputy CEO of the Dubai Islamic Economy Development Centre (DIEDC). 

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DUBAI - A new incubator for early-stage start-ups was launched on Sunday in Dubai, promising to develop the Islamic economy’s first global brand.

Goodforce Labs is set up by Islamic economy-focused stakeholders, led by research and advisory firm Dinar Standard, and including core team members Abdulla Al Awar, the CEO of Dubai Islamic Economy Development Centre (DIEDC), Sayd Farook, who is vicechairperson of the Responsible Finance & Investment (RFI) Foundation, and Aamir Rehman, partner at investment group Hoopoe Capital and senior advisor to the United Nations Development Programme (UNDP).

“Our goal here is to make things happen for the start-ups. It’s not just about bringing them on, bring in some capital and see what happens. We want to be hands-on and really, truly, build global brands,” Rafi-uddin Shikoh, director of Goodforce Labs and CEO of Dinar Standard, which is project managing the incubator, told Salaam Gateway. 

Goodforce Labs is modelled on Los Angeles’ first start-up incubator Idealab that not only pumps capital into start-ups but also provides resources, such as marketing and design services, to support them. Since its launch in 1996, Idealab has incubated and participated in over 150 tech companies, according to its website. They include digital photo manager Picasa, which was acquired by Google in 2004, and Tickets.com that in 2005 was bought by Major League Baseball Advanced Media.

The foundry services offered by Goodforce Labs are design, marketing, operations, technology, power and capital, according to Shikoh. Similar to Idealab, Goodforce will take equity positions in member start-ups, as well as earn an income from its services.

“We have a model where we dedicate a certain amount of time to start-ups upfront and we take equity,” said Shikoh.

“Secondly, when we help raise the funding for the start-ups, they have to fund these services. Or if they have funds, for an additional one to three years of sustained services, they have to pay for those services, which are subsidised compared to the market,” he added.

The plan for now, said Shikoh, is to take on eight cohorts of around eight start-ups at a time, on a six-month cycle. The first cohort includes Growmada, Zileej, Goodfood Institute, iWealth, Rabia Z, Waqf 2.0, ImpactIntel and FamStrat.

According to Shikoh, Goodforce Labs has a “very clear set of criteria” for selecting member start-ups. The first criteria is for start-ups to serve or be involved in the Islamic economy, or demonstrate social impact.

The second criteria is business model. “It’s based on what’s working in the market today and what’s not working from a business model point of view.

“From the Islamic economy point of view we also know what failures exist, so we know what start-ups not to pick,” added Shikoh.

According to him, Dinar Standard has been tracking the development of some 450 start-ups in the Islamic economy and found that certain categories are more prone to failure. He cited media start-ups as being the most likely to fail.

FUND

The incubator also plans to set up a fund that will invest in start-ups. However, unlike the $250 million seed fund for Islamic tech announced by U.S.-based Affinis Labs in October 2016 that preceded its plans for accelerators, Goodforce Labs wanted to “get things going” first.

“Our thing was to not wait to get a fund going but get this incubator going and see what kind of energy we can create,” said Shikoh.

There is no timeline set for the establishment of the fund but its war chest will not be as big as Affinis’ promised $250 million. “If we go with the eight cohorts and eight start-ups on a six-month cycle model, we’re looking to raise about $500,000 per start-up, per year. That takes us to around $20 million,” said Shikoh.

However, the incubator is still weighing its options. “We’re also looking at the possibility of setting up another separate, wider private equity fund for another entity to set up,” said Shikoh.

Goodforce is currently developing its pipeline for its second cohort of start-ups, said Shikoh, and interested companies and entrepreneurs can apply to be a member through its website.

In the meantime, it will organise events and service-based mentoring or workshops. Start-ups and entrepreneurs that are not member companies can also make use of Goodforce’s foundry services, for a fee.

Goodforce Labs is hosted by the Dubai Airport Free Zone (DAFZA) and supported by the Dubai Islamic Economy Development Centre (DIEDC).

(Reporting by Emmy Abdul Alim [email protected]; Editing by Seban Scaria)

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