Egyptian start-ups receive record venture capital funding of $190m on 2020

Start-ups found in Egypt received an archive $190 million in funding last year, accounting for more than one-fifth of every venture capital deal found in the broader Middle East and North Africa region, according to a fresh report.

Total funding deployed into Egyptian start-ups jumped 30 per cent year-on-year, greater than the 13 per cent growth in capital raising investment recorded across the region, data platform Magnitt said in it is 2020 Egypt Venture Investment Report.

Venture capital investments in Egypt have become at a compound twelve-monthly rate of 100 % in the last five years. With 114 transactions in 2020, Egyptian start-ups accounted for 22 % of all deals, to arrive second in volume terms behind the UAE, which accounted for 26 % of all Mena transactions.

Egyptian deal volumes were downwards 14 per cent on an gross annual basis. The decline in activity was largely related to the fall in the number of accelerator programs. Accelerated offers were in charge of almost half, 48 per cent, of the total transactions in the country in 2019, dipping to just 20 % in 2020, according to the report.

“Egypt houses the region’s most significant start-up ecosystem. We treasure this simple fact and back again it,” Amr Talaat, Egypt’s Minister of Communications and IT said in the article, that was sponsored by the country's IT Industry Expansion Agency.

“Today, we see Egyptian start-ups driving culture change in the business environment; proactively and innovatively addressing societal and financial demands,” the minister said.

The digital start-up scene is evolving in Egypt and has been supported by “progressive legislation, varied technical capacity-building programmes and novel funding mechanisms", he added.

Magnitt said the digital transformation experienced found in 2020 had a positive influence on the e-commerce and health care sectors, with the amount of e-commerce start-ups acquiring funding increasing by 64 % year-on-year, raising a total of $18m. Ventures operating in the healthcare ecosystem registered a 1,600 per cent development in capital deployment, amounting to $57m.

“Vezeeta’s Series D spherical accumulated $40m alone … [and] venture investment into transfer demonstrated resilience against Covid-19’s global effect on the sector, [due to] Swyvl’s $26m [fundraise] and Halan’s $15m set the industry found in second place,” in line with the Magnitt report.

Supporting start-ups and developing digital infrastructure in the the majority of populous Arab nation is probably the leading priorities of the Egyptian federal government, which is definitely ramping up its “Digital Egypt” initiative and offering legislative support to bring more technology ventures to the country.

Egypt was first included among the most notable 20 economies globally in management consultancy Kearney’s index that helps companies decide on the positioning of their offshore functions. The North African overall economy recorded a score of 5.62 % on the index and was ranked 15th globally in the 2021 Kearney Global Services Location Index.

The index analyses 47 metrics across four primary categories: financial attractiveness, persons skills and availability, business environment and digital resonance.

Both UAE and Egypt are “financially attractive locations with competitive compensation and infrastructure costs, strong entrepreneurial cultures and public sectors ready to make strategic investments”, the Kearney article said.