With $50M supported by the World Bank Egypt’s Minister of Trade and Industry launches a new VC fund to support Egypt’s startup ecosystem.
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Egypt’s Minister of Trade and Industry Nevine Gamea, Executive Director of the Micro, Small and Medium Enterprise Development Agency (MSMEDA), have emphasized the state’s interest in supporting young innovators and providing them with technical and financial support to help them turn their ideas into projects that meet the various needs of people.
Ms. Gamea went on to say that, since the Coronavirus outbreak, MSMEDA has taken a particular interest in continually assessing and improving its financial services in order to satisfy the demands of a wide range of projects. Using $50 million from the World Bank, MSMEDA launched a venture capital program to fund new and existing investment funds that support entrepreneurship projects and implement specialized training programs for employees working in various financial institutions to raise awareness of the mechanisms of this type of funding and help them expand their applications. So young Egyptians may finally take advantage of the free market and start working on cutting-edge ventures that can compete globally.
With Egypt’s first Mega Round raised by T&L and micro crediting solutions startup Halan, the Egyptian VC ecosystem observed an unprecedented capital deployed in 2021. Observing a 176% YoY growth in funding as recorded in our Egypt 2022 Venture Investment Report, Egypt’s VC space not only crossed the $500M mark in funding but also kept a healthy deal flow. Out of the top 3 geographies in MENA, Egypt was the only country to observe a 10 PP increase in the proportion of Early-Stage Deals (<$500K). While E-commerce, T&L, and FinTech were hot investor targets over the past year with startups like B2B E-commerce platforms MaxAB and Capiter, delivery platform Breadfast and T&L startup Trella, and FinTech infrastructure builders Paymob and Dopay raising the lion’s share of investments, Early-Stage funding emerged with up and coming technologies. Most notably, 12 out of the 20 top investors in the region were local-based, with investors like Flat6Labs, AUC Angles, EdVentures, and Foundation Ventures having the most number of investments backing Egypt-based startups. While open to regional and global investors, the Egyptian ecosystem seems to have healthy self-sufficiency, which will now be further boosted with this newly launched local fund.
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Gamea made this statement at the opening of the Direct Investment Week, which was co-organized by the Egyptian Association for Direct Investment (MSMEDA) and the African Private Equity and Venture Capital Association (APEVCA), in collaboration with the World Bank, the German Agency for International Cooperation (GIZ), Misr Insurance Holding Company (NBE), and more than 120 financial and investment professionals present. A three-day course on direct investment, venture capital, and equity fund management is offered.
The most important component of the venture capital program, according to Gamea, is that it allows investment in funds that want to enter the African market. This aids in the growth of trade and the sharing of ideas with neighboring African countries. To promote entrepreneurs and stimulate new ventures, the agency has collaborated with numerous international and donor agencies to build incubators and business accelerators in line with international norms.
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