Egypt is fast becoming one of the most promising arenas for innovative startups — with a growing community of young, tech-minded entrepreneurs, international investors are sitting up and taking notice.
The country has one of the fastest-growing startup scenes in the MENA region and is becoming a global competitor. According to a report from Startup Genome, Egypt is in the top ten global ecosystems with affordable talentand has a total ecosystem value of $1.2 billion.
There are multiple factors for why Egypt is worth keeping an eye on. It has a youthful population with around 50% below the age of 30. A high percentage of college students graduate every year with technical skills, including engineering, IT, and energy. The government has also invested heavily in initiatives designed to incentivize learning such skills. According to Bloomberg, it was the eighth-highest contributor to global growth in 2019.
The Next Web recently hosted Hangout with VCs Egypt, a boutique event that brings together investors and ready-to-fund startups. The Hangout, which was held on April 8, matched up 25 up-and-coming Egyptian startups with investors.
With Egypt fast becoming a hotspot for development, here’s what some of the investors had to say about the country’s future.
The event was hosted in partnership with the Technology Innovation and Entrepreneurship Center (TIEC) of the Egyptian government’s IT Industry Development Agency (ITIDA). Amr Mahfouz, CEO of ITIDA, told TNW why Egypt is a place to watch:
I can say that investing in Egyptian startups is an investment in the future as the startup business in Egypt has tremendous potential to expand due to the large economy and huge consumer base, mature entrepreneurship scene, and last but not least the accelerated digital transformation and tech-adoption across all sectors and industries that offer huge opportunities for startups to thrive.
The event began with a panel of international VCs who were keen to see what the startup ecosystem has to offer. According to the investors, Egypt has several growing markets, some of which would be considered overinvested in other parts of the world. These include fintech, e-commerce, B2B commerce, and other tech service solutions.
Issa Aghabi, founder of Access Bridge Ventures, told TNW why he chose to invest in Egypt, and why other investors should consider doing the same:
It is a great market and a gateway to both the Middle East and the wider African continent. We are seeing a lot of strong and capable entrepreneurs are building products to solve local problems that are also relevant across the region/emerging market. Egypt is a great place to validate and scale. This has been validated through a vibrant and growing ecosystem that is relentless and shows no signs of slowing down.
He also cited Egypt’s high rates of tech adoption, large and youthful population, and growing support for the tech ecosystem from the government. He added, “It is a region that has historically been neglected and is now at the cusp of its technological revolution both in terms of consumption and creation.”
There are several local factors that make Egypt not just an attractive place for outside investors, but the ideal place for homegrown talent to remain. The country is projected to have 125 universities by 2030, and also has a high percentage of people who speak European languages, while also having a relatively low cost of living.
After the panel, the startups and the investors were matched up in several different private rooms, where each startup was allowed to pitch to four different investors for four minutes apiece. After a short break, certain startups were permitted into follow-up meetings with the investors.
Oscar Ramos, Partner at SOSV said, “The event was an eye-opener about the potential of the market and local startups. I am very positive it will lead to a potential first investment and more activity in the region.”
By the time the event was over, there had been over 130 meetings between the startups and the investors, with 100% of the investors saying they intended to have further meetings with the startups.
And, according to Mahfouz, this startup boom is only the beginning:
Despite the regional and global competition, we are confident that our startup ecosystem will continue to evolve and thrive with more engagement from society, more funding from the business sector, and more investors which will contribute heavily to shaping a better startup scene and entrepreneurship environment in Egypt.
Aboudi Al-Qattan, investment associate at DASH Ventures, said the Egyptian ecosystem is a greenhouse that promotes the rapid growth of ideas:
[We at DASH] regularly engage with exciting startups addressing real, tangible, regional and global problems. From FinTech, to Healthcare, to eCommerce, we are in the midst of rampant entrepreneurial development in Egypt, and it is our responsibility as investors to continue supporting and engaging with these transformational entrepreneurs. We are extremely bullish on Egypt and fervently believe that this is only the beginning for what will likely become a global entrepreneurial hotspot.
His words also echoed the sentiments of everyone present at the Hangout event: “While the entire MENA region is exciting, the sheer size of Egypt coupled with the natural creativity of the population make the country an ideal melting pot for entrepreneurship. International investors risk missing out on exponential growth and must take note of the ecosystem before it’s too late.”