According to a recent article published by Wamda, startups in Egypt are benefiting from a rising investment coming from outside the country. The article highlighted the launch of two new venture capital funds in the country – Sawari Ventures closed its $71 million fund while Algebra Ventures launched its second fund, targeting $90 million with a first close expected in the third quarter of this year.

The amount of capital raised in by 34 startups in 2021 reached $22 million, this is double the amount raised by 24 startups in the fourth quarter of the last year. It is expected that the new two funds are likely to further strengthen the ecosystem by providing the needed investment for the local startups.

The article gives an optimistic outlook at the quality of the entrepreneurship as more experienced entrepreneurs are entering the market. Another element of optimism: the funding, which has been improved as well; because more foreign investors are joining the ecosystem to benefit from the available talent and opportunities in Egypt.

For example Sawari Venture’s limited partners include several Egypt-based banks as well as France’s Proparco, the Dutch Good Growth Fund and South Africa’s Sango Capital.

Financial technology (Fintech) is one of the most attractive sectors. Other sectors, such as healthtech and e-commerce, are also among the sectors that benefit from the increasing number of deals. But it is the fintech that accounts for almost 60 per cent of the amount raised so far thanks primarily to digital payments provider Paymob, which recently announced the close of its $18.5 million Series A round, the country’s largest Series A investment to date. Other notable fintech investments this year include Dayra and NowPay, both of which joined the latest batch of the US-based Y Combinator accelerator programme.

One of the main factors that played a decisive role, the steps undertaken by the government which has improved a lot of the regulations. These new improvements had focused more on promoting the startup ecosystem and promoting innovation.

Nevertheless, there are a lot of challenges to address, whether in logistics, distribution, healthcare, education, etc.

For more information: wamda