hatch & boost bids to scale up more climate-action driven ventures in Arabian Gulf region

Hatch & boost is a venture builder that ideates, creates, and scales its own start-ups through a sector-agnostic model that focuses on sustainability and climate action. Since its inception, it has launched start-ups that aim to solve some of the world’s most pressing environmental and social challenges across industries that include femtech, agritech, sustainable mobility, foodtech, fintech and other allied sectors. It has created a start-up building model that de-risks early-stage investment.

It also serves to fill gaps in start-up growth in the region by validating concepts and generating traction in early-stage. Its current roster of start-ups in the minimum viable product (MVP) stage includes RE:, World of Farming, Ion, and BreakBread. The venture builder has several other start-ups in stealth.

Faris Mesmar, a venture builder with over 15 years of experience, is the Chief Executive Officer (CEO) of hatch & boost.

He has built companies within the field of technology, infrastructure and projects development, and his work has included creating tech platforms, operating high velocity early-to-growth stage companies, product design and development, and building high-performing and non-conventional growth teams.

Prior to founding hatch & boost, Mesmar served as a senior executive across multiple entrepreneurial global tech and infrastructure companies – propelling missions, driving business expansion, and building cross-functional teams to accelerate growth.

Mesmar is a graduate of the School of Management at the Hashemite University of Jordan.

Khaleej Times spoke with Mesmar about his company’s venture-building model and its prominence in the Arabian Gulf region.

Here are some edited excerpts from the interview:

Explain the concept behind hatch & boost and what the idea was behind it.

We are an Abu Dhabi-based venture builder that ideates, creates, and scales its own startups through a sector-agnostic model that is focused on tackling the world’s most pressing environmental and social challenges. We started hatch & boost two years ago with this goal in mind, and we set up a model that serves to de-risk early-stage start-up development to scale more climate-action driven ventures in the region. Within every start-up we ensure three key elements are involved: meaningful impact, capital efficiency and the right governance.

Earlier this year, we merged our portfolio of start-ups with CE-Creates, the venture building arm of Crescent Enterprises, in the first-ever portfolio merger of venture builders in the region. This was a major milestone for us, as well as an important validation of the venture building model we have built, but we also see this as a milestone for the region’s entire impact investing landscape.

Now, we are working on the acceleration and growth of seven portfolio start-ups this year, which span agritech, sustainable mobility, femtech, foodtech, fintech, and more.

How is it related to sustainability and climate action?

Our region has made great strides in championing climate action. The UAE has pledged $50 (Dh183.65) billion to tackle climate change and further develop projects towards the Net Zero by 2050 initiative, as well as its upcoming hosting of COP-28 in Abu Dhabi next year. This creates the perfect alignment between the public sector and the private sector to accelerate climate innovation pathways towards decarbonising regional and global economies.

We have identified some of the world’s biggest problems and we are building ventures to help solve them. Our model is centred around building the right teams around the right problems and solving them faster and more effectively by deploying capital in a responsible way. All of our start-ups are cleantech, foster a circular-economy approach, and have a positive social impact.

What is unique about your venture-building model?

Much like other venture builders worldwide, we ideate and build startups from the ground up. However, what sets hatch & boost apart is our commitment towards climate action through a sector-agnostic approach. What we mean by this is we implement impact investing strategies into every start-up building process, based on international standards and frameworks. We blend these frameworks in the start-up building process by capturing the environmental and social impact of each portfolio startup from the very beginning. These frameworks are essential as they are used to capture, manage and report back the financial and impact returns to investors and shareholders.

Our approach to scaling start-ups is also unique in the way we ideate internally and leverage our in-house capability of designers, builders, developers, and growth hackers, in the initial development stage. When a start-up generates traction and reaches a product market fit, we partner with a co-founder to further scale the startup, with our support.

What are your thoughts on the current environmental, social and governance (ESG) start-up ecosystem in the UAE and the wider region?

According to MAGNiTT's latest flagship Mena Venture report, venture capital (VC) funding in the Middle East and North Africa (Mena) reached $2.6 (Dh9.55) billion in 2021, 138 per cent more than the total funding in 2020. Out of all the deals closed in 2021 across the entire region, startups in the UAE accounted for 26 per cent, as well as 45 per cent of all funding raised across the region in 2021.

While the Mena region is still a growing market, various supporting government initiatives, regulatory frameworks, and a tide of changing perspectives on responsible and sustainable investments are catalysing growth in the start-up ecosystem, particularly as nations seek to decarbonise and secure their energy sovereignty.

With many signs pointing in the right direction in terms of drive, investment, and talent, the Mena region is a fertile ground for the next generation of climate action start-ups – if they are built with the right model and framework, including a rigorous focus on best-practice governance.

I also believe that the growth of venture building in the UAE is ushering in a new era for responsible investments, on which investors are increasingly keen to capitalise. Increasing venture building capabilities will attract more investors that are looking to tap into its potential. We have the opportunity to become the steward for impact venture building. To fully realise this potential, however, it’s critical that this is done in a way that is transparent, measurable and accountable.

What would attract or incentivise investors towards this type of venture building model?

The model we have established aims to fill the gaps in early-stage start-up development and building – by accelerating the growth of startups through the hands-on support of our shared pool of talent, ensuring capital efficiency and speed of execution to generate traction and sustainable growth.

Our main message to investors is that they can invest in sustainability focused start-ups that are on a mission to decarbonise and decentralise key industries facing climate and social challenges. They can do this all while ensuring the right governance model is in place, which is an increasingly popular criteria for investors to evaluate startups. This can also help them avoid investments that might pose a financial risk due to wrong practices.

Start-ups seem to be playing an increasingly important role in addressing pressing issues (food security, climate change, etc). Can you give an insight into this, and do you think there’s enough investor appetite for these kinds of start-ups?

Food insecurity and carbon emissions are two major global challenges that governments around the world are aiming to solve, as they march towards a carbon neutral future. The UAE government has established national strategies to address food security and climate change, as well as setting up public private partnership programs and helping catalyse funding. These initiatives are helping empower start-ups to innovate with the intention of combating climate change, to help them rally towards cutting down on emissions and scale – all while achieving wider sustainability goals.

We are seeing many start-ups envisioning a future with net-zero emissions, growing investor appetite for climate change, and driving more engagement on green investment opportunities, but there are still several challenges to overcome along the way, such as access to capital and structured financing. Achieving this will help validate these startup models and scale them commercially for the betterment of local communities and the world.

How many start-ups have you launched, and how many are currently stealth?

Our portfolio currently includes World of Farming (WoF), an agritech fodder solutions provider; BreakBread, a digital supper club platform for cultural immersion and connection; ION, a sustainable transportation provider; and Kava and Chai, a specialty coffeehouse.

Currently in stealth, we have TipiT, a digital token tipping application; and Shamal, a high-tech workwear brand. Our portfolio is extremely varied, and gives us the opportunity to generate impact across a variety of demographics, communities, and industries in the region.

What are the plans for expansion in the wider region?

We plan to continue scaling and accelerating and growth of our six portfolio start-ups this year, which span agritech, sustainable mobility, foodtech, and fintech, among other sectors. Simultaneously, we'll be working towards expansion across the region in the coming years, namely in the Kingdom of Saudi Arabia (KSA) and Egypt, as these markets are showing great promise towards lucrative success for impact-driven start-ups.

From a venture building perspective, we plan on ideating and scaling up to five new start-ups per year.

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