2021 has started on a high for Egypt. In Q1, 34 startups in the country raised $22 million – this is twice the amount raised by 24 startups in Q4 2020, according to Wamda, a MENA-focused publication.
What’s driving this enthusiasm in Egypt?
Partech suggests “high quality entrepreneurs and increased activity from regional MENA funds” are responsible.
Ahmed El Alfi, founder and chairman of Sawari Ventures, agrees. His firm has one billion egyptian pounds (~ $71m) to invest in more Egyptian startups; he is confident of finding great deals and that more investors will be looking for deals.
“The quality of entrepreneurship is better than it was, there are more experienced entrepreneurs who are now starting companies,” El Alfi told Wamda.
“The funding has been improved as well; because more investors from outside Egypt are acknowledging the talent and opportunities in Egypt.”
Swvl’s $42 million raise in 2019 remains the largest by any startup in the region. Founded in Cairo, the bus-hailing company is an African pioneer, with its model now spreading to Nigeria. But out of the three Swvl co-founders, two have moved on to found other tech businesses in the country.
It is a sign of maturing entrepreneurship ecosystems for employees of stable companies to be able to start new ventures without resulting in any damage to the companies they leave. So as more Egyptian startups get funding, build and scale, we can expect the birth of new startups who dream big, get funding and keep the curve on an upward trajectory.
How do you bet?
Partech put the total equity VC funding raised by African tech in 2020 at $1.43 bn, a 29% reduction from 2019. Egyptian startups got $269 million or 19% of the funding in 2020.
AfricArena projects that Africa will raise between $2.25 and $2.8 billion in 2021. If Egypt did well in a bad year for Africa, it stands to reason that Egyptian founders will be getting lots of calls year round.
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