Ecosystem Deep Dive #11: Egypt - Rookie of the year
The reasons behind Egypt's astronomical rise in funding over the past couple years.
A message for non-paid subscribers
Read the full article, all previous ones, and the next 6 exclusive op-eds with a free trial.
An eventful decade
Egypt’s 2010’s decade was agitated, to say the least. One remembers the Egyptian Arab Spring, exemplified by massive demonstrations held at Cairo’s Tahrir Square, which made headlines around the world. After overthrowing Hosni Mubarak in 2011, the country underwent more political turmoil with the removal of post-Arab Spring President Mohamed Morsi by army general Fatah Al-Sissi, who still heads the country to this day. The country’s start-up ecosystem has had to constantly adapt and founders have had to be resourceful. In Amir Hegazi’s fantastic “Start-Up Arabia” book, Omar Gabr, founder of Instabug, half-jokingly explains he managed to get Silicon Valley investors’ attentions by offering them information about the events unfolding back home.
In recent years, the Egyptian start-up ecosystem has undergone tremendous growth, fueled by a variety of factors which all make Egypt poised to compete directly with Nigeria for the “African Giant” title. Egypt has a multitude of different advantages, which Egyptian founders have been able to capitalize on. These include:
Young and tech-savvy population (50% of Egyptians < 30 years old)
An ideal test market (Cairo, its 20 million people, and its innumerable “disruptable” sectors)
Fantastic geographic location (crossroads of Europe, MENA and Sub-Saharan Africa)
An entrenched entrepreneurial culture (with start-ups being more and more socially accepted as a viable career path)
Scalable start-ups (most problems Egyptian founders solve are also pain-points throughout the region)
The Egyptian start-up ecosystem is overwhelmingly focused in Cairo, the capital city (not for long, as a new administrative capital is being build). Indeed, according to Disrupt Africa’s 2021 Egypt Ecosystem Report, 93.1% of Egyptian tech start-ups are based directly in Cairo. Other cities Egyptian start-ups operate in include Alexandria and Assiut to name a few. This layout makes sense, as Cairo’s market itself is almost the size of the entire Tunisian and Rwandan national markets combined (in terms of population). This makes Cairo a perfect setting for Egyptian founders who want to test out their idea and gain sufficient traction to raise money without needing to expand to other cities/countries.