What’s a former Brazilian bitcoin CEO doing in an accelerator in Dubai?
It’s a good question, Daniel Novy says, but he’s quick to provide the answer. To the former founder of bitcoin exchange Basebit and current blockchain specialist at Consensys, it’s the opportunity to work in a rare region of the world where industry doers aren’t encumbered.
“In Brazil, I’ve done some work with the central bank and other ministries, but all the time, it’s just a small group of people trying to add value,” he tells CoinDesk. “It doesn’t have the whole entities and the buy-in of the government.”
In conversation with other entrepreneurs – some of whom have uprooted to be here, relocating sometimes halfway around the world – the local government comes up frequently, but always in contrast with its Western counterparts.
Nestled into the base of Emirates Towers, Dubai Future Accelerators is home to seven blockchain startups that are now working hands-on with the government as it seeks to reach an ambitious goal: securing all of its documents on a blockchain by 2020.
In conversations with startups including CrossVerify, Loyyal, Luther Systems, Otonomos and RSK Labs, all struck a similarly optimistic tone on Dubai’s outsized commitment to the technology.
Henry Sraigman, head of business development at RSK Labs, told CoinDesk the pitch was enough to convince him to relocate from Argentina when his firm was selected for incubation. Adding to the attraction, Sraigman said, was that the government program provided him a free flight and free housing, and did not take an investment stake in RSK for the work.
Sraigman explained:
“Here there is a long commitment to innovation, the leadership is really strong and they are pushing really strong to change things.”
As part of the program, RSK Labs is now working with Dubai’s Department of Economic Development (DED) on how it might use a blockchain to reduce redundancies in the licensing process for new businesses. As explained by the DED’s CEO Mohammed Shael Al Saadi this week, the project aims to make it easier for businesses to register with domestic authorities – a painful, multi-step process today.
But while Dubai has the ambition, it’s in short supply of those who can execute its vision, and there’s a big demand here for companies with the appropriate skill set.
“They need the workforce of our companies,” Sraigman said.
Official backing
Yet, as Dubai’s ambitions have grown, its blockchain work has become more diffuse.
Once consolidated to the Global Blockchain Council (GBC), a consortium announced at the beginning of last year, the group now has a roadmap that finds a host of government entities managing its rollout.
For example, Dubai Customs and Dubai Trade are working with tech giant IBM on a trade finance proof-of-concept. Other startups are being paired with the Smart Dubai Office (SDO), which manages its overall citizen happiness initiative, and the General Directorate of Residency and Foreign Affairs (GDRFA), which oversees immigration, on separate work.
CrossVerify CEO Carl Weir explained that his startup saw a value in moving its operations from the UK to Dubai to capitalize on this opportunity.
Weir said:
“We picked Dubai Future Accelerators because it’s one of the highest profile [incubators], it has the best access to government entities and it directly has the full backing of the rules of the country.”
CrossVerify uses biometrics and a private version of the ethereum blockchain to enable anti-money laundering (AML) and know-your-customer (KYC) rules to be shared among institutions and, as such, Weir is targeting institutional clients in insurance and government military deals.
To start, however, it’s working with the GDRFA on applying the solution to Dubai’s challenges in immigration, such as reducing customs times at airports and for entrepreneurs.
Weir cited the size of contracts awarded to domestic startups through the program, as well as the ability to go live with projects as a deciding factor in the application.
“It’s real, it’s monetizable, and it moves new projects from continual proof-of-concept stage to the real world,” he said.
Industry credibility
Elsewhere, there’s a sense that the resources Dubai is providing are the biggest draw for entrepreneurs.
Matt Hamilton, director of strategic partnerships at Loyyal, for instance, said that, while his company was one of the first startups in the accelerator, it’s still focused on Western markets, which are more aware of the technology overall.
However, with Dubai pushing to increase its stature as a tech player, and many blockchain startups doing the same, Hamilton rather sees the situation as one with correctly aligned incentives.
Loyyal is now working with Emirates Airlines on a blockchain rewards points proof of concept, though he said it’s not dissimilar from other projects the company has in the works. Already, Deloitte has white-labeled Loyyal’s software for use in an employee rewards program.
But the difference between the two experiences, he said, is real.
Hamilton projected that Loyyal has brought in $280,000 in revenue to date, and that 70% of that money comes directly from its Dubai work.
Hamilton indicated that these funds will be key for his firm as it seeks to court venture capitalists looking for revenue. With the government vetting startups as well, he said this can add credibility in a market that is defined by interest and, at the same time, reticence.
Hamilton summed up the difference simply, stating:
“In the US, there’s a fear of losing your job because it doesn’t work out. Here they want to be the first mover.”
Images via Pete Rizzo for CoinDesk
