Ecosystem Deep Dive #11: Egypt - Rookie of the year
The reasons behind Egypt's astronomical rise in funding over the past couple years.
Ecosystem Deep Dives is a weekly series in which I analyze and compare different start-up ecosystems from around the world. If you enjoy and gain value from my work, feel free to share and subscribe!

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)
Strong academic institutions, especially in STEM (AUC, Cairo University, Mansoura University, Ain Shams University, University of Alexandria, and GUC)
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 ecosystem
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.
“Cairo ranked first as the best ecosystem in the Middle East and the North Africa region, according to the Global Startup Ecosystem Report (GSER) 2021.” - Egypt Independent
Egypt has the particularity of having an extremely active incubator/accelerator scene, with a whopping 38.6% of Egyptian start-ups having undergone some type of entrepreneurial support programs. A non-exhaustive list of the country’s main ESO’s (entrepreneur support organizations) includes:
Academic, corporate and governmental actors have also set up their own ESO structures. In the academic realm, the American University of Cairo has set up its own “venture lab”, EG Bank has set up its MINT incubator, and the government has set up its TIEC accelerator. Start-up events such as RiseUp, Vested, and Techne also contribute to the vitality of the ecosystem.
The societal and economic scars exposed by the revolution years have also given birth to a large “social impact start-up scene” in Egypt.

What do Egyptian start-ups work on?
Contrary to its Sub-Saharan counterpart, Nigeria, Egypt’s start-up scene is not dominated by fintech, at least not yet. In Egypt, e-commerce remains the dominating sector start-ups innovate in, bolstered by Egypt’s huge local consumer market and rising digital adoption. Growing payment pains coming out of e-commerce’s expansion will most likely give rise to new Egyptian fintech innovations, a trend followed by Paystack, a Nigerian start-up specializing in African B2B payments that recently got acquired by Stripe for $200 million.
It is important to highlight some of Egypt’s start-up success stories. These are extremely important for a country’s start-up ecosystem for two main reasons: successful founders generally re-invest in local start-ups and local role models are greatly inspiring for aspiring entrepreneurs. The impact the Skype founders have had on Estonia or the one the Paypal founders have had on the US are testament to this.
Fawry is the first Egyptian unicorn. The company describes itself as “the leading digital transformation & e-payment platform in Egypt, offering financial services to consumers and businesses through more than 225,000 locations and a variety of channels.” One of Fawry’s particularities is that it IPO’d on the Egyptian stock market, instead of the traditional US market. This is an exciting move, as the possibility of having Egyptian start-ups go public in Egypt increases the chance of liquidity for investors, who up until now have had to rely on international M&A’s or extremely rare US IPO’s in order to get a return on investment. This trend, combined with the increasing number of African start-ups buying each other, makes the African VC asset class more attractive for “traditional” investors, possibly pumping more money into the ecosystem. Another notable exit is Swvl, a ride-hailing start-up, that recently went public in the US through an SPAC.
Other very well-funded Egyptian start-ups include Halan (fintech), Trella (logistics), Maxab (food delivery), Paymob (fintech), Capiter (B2B marketplace), Homzmart (e-commerce), Vezeeta (healthtech), and Telda (fintech). You can find the complete list here.
Astronomical funding
Egypt’s fundraising scene is a healthy mix between international organizations (Flat6Labs, Y-combinator, 500 start-ups, Endure Capital), local structures (Algebra Ventures, Sawari Ventures), local angels (Alexandria Angels, Cairo Angels), and more recently, pan-African focused funds such as Launch Africa Ventures. In the past two years in particular, the Egyptian start-up ecosystem has experienced a phenomenal growth in funding. This is due to a couple factors, including the increased maturity of the ecosystem, more international exposure, and the overall tidal wave of start-up funding emerging markets have experienced in 2021. A telling example of the increasing maturity of the ecosystem is Mahmoud Nouh, who after co-founding Swvl, just raised $33M for Capiter, his new start-up, which operates “a B2B marketplace that provides a payment method that offers cash flow solutions for small to medium-sized businesses.” This type of “serial founder” mobility is what keeps start-up ecosystems innovative and relevant on the world stage.
“The total number of funded Egyptian tech startups per year increased 1,000% from 2015 to 2020. Even stronger growth has taken place in total annual funding secured by those companies. The $156,248,000 raised in 2020 represents a 1,716% increase on the $8.6 million banked in 2015. However, 2021 looks set to shatter all records, with 82 startups having so far secured a staggering $403,562,000, which already represents a 158% increase on 2020 figures. Only Nigerian startups have secured more investment so far in this bumper year.” - Disrupt Africa 2021 Egypt Ecosystem Report

Governmental involvement
The Egyptian government has taken part in the development of its national ecosystem. As part of its Egypt Vision 2030, the government is seeking to digitize and diversify its economy, with entrepreneurship taking an important role in the strategy. A number of initiatives, legislative as well as physical, are contributing to the growth of the ICT sector in the country, which inevitably includes tech start-ups. Two notable initiatives include Creativa Innovation Hubs (government run innovation hubs scattered throughout universities) and the Central Bank Fintech Fund, a $63.6 million fund, for Egyptian fintech start-ups, looking to serve the 67% of Egyptians that are financially excluded. One of the most successful government initiatives so far has been the Egypt Future of Work is Digital (EFWD) program, which aims to “equip and train 200,000 young Egyptians through Udacity an online learning platform for digital technologies and skills to digital work and local market opportunities.”
Challenges
The Egyptian ecosystem, despite impressive progress in almost all areas, is not immune to obstacles. One of the most concerning problems is the lack of gender diversity within the founder community. While this is a problem faced worldwide, from Palestine to New York, Egypt is performing poorly. Indeed, only 12.5% of Egyptian start-ups have female founders. This is a huge loss for the ecosystem as a whole, not only as founder diversity is found to improve start-up success, but women-led start-ups tend to outperform men-led ones. In my opinion, the answer isn’t for VC’s to set quotas, but rather for the ecosystem to include more women earlier in the pipeline, from start-up hackathons to university start-up events.
Bureaucracy also represents a pain for many founders. Similar to many other MENA countries, the Egyptian bureaucracy imposes an often unnecessary weight, both financial and mental, on Egyptian founders. While new regulations such as Law 152 aim to ease the process of doing business, bureaucratic hurdles still remain a very tangible obstacle for Egyptian start-ups. In my opinion, Estonia is the best example to follow in that regard: a centralized, easy-to-use, completely digital portal for start-ups to incorporate, pay taxes, apply to licenses, etc…
A bright future
The Egyptian start-up ecosystem is not an early-stage ecosystem anymore: the network of incubators and fundraising structures across the country is professionalized, former founders are diving back into the ecosystem, and the government has grasped the importance entrepreneurship will play in the country’s move to a more modern economy. If Egypt plays its card right, I believe most of the next African unicorns will be Egyptian, due to the scalability potential Egyptian start-ups enjoy. The need for Egyptian start-ups in MENA and SSA countries, combined with Egyptian founders’ ability to make mistakes and gain traction in Egypt before expanding, will undoubtedly give Nigerian start-ups a run for their money.
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