Up close and personal with MEAPT's most prominent players in the ecosystem. Today we invite Nihal El Chami Head of Marketing & Program at Falak Startups.
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3 questions, 1 player, and endless insight. Welcome to the "FireSide 2022" content series where we reflect on trends, industries, investments, and venture capital in the Middle East, Africa, Pakistan, and Turkey. For today's FireSide chat, we invite Nihal El Chami Head of Marketing & Program at Falak Startups, the Early-Stage investor backing the most anticipated up-and-coming startups in the region:
How would you describe the Early-Stage startup scene in Egypt and what are some remarkable feats entrepreneurs have been showing?
Amid the Egyptian startup scene growth, Egypt is still thirsty for new products and innovative ideas; it has a huge room for growth, an unfulfilled potential, and untapped markets. The startup scene in Egypt is growing immensely. Investments in Egypt have reached an all-time high in 2021, as Egyptian startups broke the record and raised more than 400 Million USD across 146 deals.
Aforementioned, lots of local, regional and international investors are interested and willing to invest in Egyptian startups given Egypt’s big market with a population of over 100 million, this encourages investors to enter this market for its untapped opportunities. Additionally, having MNT-Halan & MaxAB, 2 of the top 10 Major and Mega Rounds in MENA, gives an indicator of the huge growth the country is undergoing as well as a potential for growth for other Egyptian startups that leads to encouraging investors at the same time.
We have also seen a shift in youth’s behavior, as people are now leaving their corporate job and joining and/or even starting their own startups. That being said, more interest from entrepreneurs, businessmen, and investors to enter the startup scene and support startups.
As recorded in our Egypt 2022 Venture Investment Report, the Egyptian VC ecosystem observed an almost 30% YoY increase in total transactions to rank the second most active ecosystem in MENA after UAE. Crossing the $500M mark in capital invested in 2021, the Egyptian ecosystem explored major and Mega Rounds on one end, yet on the other, was the only geography in MENA's top 3 to explore an increase in Early-Stage Deals (<$500K) to account for more than half of total transactions closed in 2021.
Who are some of the most anticipated startups in your portfolio and what was the thesis behind their backing?
We are a sector agnostic investor; we have been investing in nearly all industries and our portfolio reached over 80 startups to date. Some of our notable startups are:
- Bypa-ss, a Healthtech startup that digitizes healthcare information exchange operating in Delta Egypt.
- Raseedi, a daily Fintech app for the underbanked masses that saves on calls and other services opened 5 times every single day/user.
- DeltaOil, a cleantech startup, that works on minimizing waste oil management in Egypt and offers several services mainly collecting used oil collection from households.
- Teradix, a SaaS startup that is powered by machine learning and is helping B2B procurement professionals to source the best suppliers faster, easier and negotiates better prices effortlessly.
- Rabbit, a micro mobility/cleantech transportation startup that is offering electric scooters to rent by the minute to commute from one place to another via its mobile applications, with plans to expand into other micro-mobility solutions including electric bikes and electric Vespas.
- Eyouth, an EdTech startup that connects community stakeholders with youth through adaptable, customized and suitable programs.
We’re still a sector agnostic investor, however, due to Covid-19, the economy has changed a lot all over the globe; more industries are becoming extremely essential in today’s life like logistics & last-mile delivery, or Q-commerce, in addition to, Edtech, Fintech and cashless payment, and Healthtech. That being said, this has been our focus as well. We have initiated the “special cohort” cycle where we were providing investment opportunities, committed to supporting entrepreneurs amid uncertain times. We‘ve invested in a few startups operating in different industries like Amanleek, a fintech startup; Little Blessings an e-commerce startup, DoctorOnline a HealthTech startup, SubsBase & Fundok, SaaS startups, and EdTech ones as well.
In 2021, we’ve re-imagined our current offering to meet startups’ needs by creating a hybrid model between VCs and Accelerators. This new model enabled us to give startups the best of both worlds; by increasing our investment size and offering a year-round investment of up to EGP 2 million, we can co-invest with other Angels & VCs and join growth stage investments rounds. Additionally, we provide startups with constant support and access to strong and exclusive support services that include mentorship, strategic guidance, networking opportunities, media, and PR.
Introducing our co-investment deals in 2021:
- We co-invested alongside Enterprise Ireland & other Egyptian Investors in Educatly, an EdTech platform that allows students to search, compare and apply to over 120,000 live and up-to-date higher education opportunities globally.
- Alongside Sarya Holdings, we co-invested in Hayi, a hyperlocal social network that digitizes UAE neighborhoods by connecting all neighbors, local businesses, and community managers to create stronger and more connected communities.
- We’ve co-invested with other angel investors & Flat6labs in Dkilo, an Adtech startup that provides a street-level digital advertising platform that connects audiences with dynamic ads that are displayed on moving cars, hence when the car moves, the ads move and reaches a higher spectrum.
Our main criteria we look for when investing in startups is the strong team that compliments each other and has experience in the industry they’re operating in - this has been and will remain our thesis when choosing and backing tech startups.
What could be 1 prediction for Early-Stage startups in Egypt in 2022?
When we take a closer look at the Egyptian ecosystem, it has surely witnessed massive growth. First off, having strong international & regional startups operating in the Egyptian market like Uber, Careem, Talabat, etc. got Egyptians exposed to the startup culture. That being said, those ex-workers were more likely to create successful and enduring startups, as they are now having the needed experience, they understand the market, and are able to form a strong team.
Additionally, the homegrown Egyptian startups have evolved and grown immensely by raising mega-rounds, as well as reaching IPOs like Fawry, and we’re seeing Swvl following the lead. In general, we are expecting more early-stage startups to get started and raise big funding rounds, as well as seeing lots of investors pouring their money into Egypt, the Middle East, and Africa in general, that being said, more startups are able to evolve and grow, as well as hiring the top in the market with the ability to give them higher salaries in order to retain them.