Strength on the Nile 🇪🇬

Egypt has earned its spot in the 'Big Four' of the African tech ecosystem

Do you also get the feeling that Egypt gets featured quite heavily these days when it comes to start-up deals? Well, with a $1m+ deal announced every 10 days on average since the beginning of the year, it does represent 18% of deals so far, just behind South Africa (24%) and Nigeria (22%), and ahead of Kenya (15%). Egypt’s share of the African ecosystem has been growing steadily since 2018, at least in terms of number of deals. When it comes to the share of the total value raised however, it represents around 8% of the continent’s total, which is relatively low compared to its weight in Africa’s overall GDP (16%). Though it ranked third in total value raised in 2019 (ahead of South Africa), it was #4 in 2020 - and is still so far in 2021YTD -, trailing behind the Top 3. This is partly due to the low number of very large deals: beyond Swvl (which raised $60m+ in 2019-2020), no other Egyptian start-up has disclosed a deal over $50m. (Fawry, with its market cap now topping $2bn is of course a great Egyptian success story, but it’s not counted here as it IPO’ed back in 2019). There’s good reason for optimism for the years ahead given the number and size of Egypt-focused funds: in the past couple of months alone, ~$290m (!) were announced by funds focused on the country: $69m for Sawari Ventures, $90m for Algebra Ventures, $120m for GIZ’s VC University, and Flat6Lab’s $10m top-up on its FAC Egypt fund just yesterday. This validates the attractiveness of the market, and will help fuel its growth further. Finally, a quick analysis of the CEOs who raised $1m+ in Egypt since 2019 reveals that 2/3rd of them have been to university in the country, a proportion much higher than in Kenya or Nigeria for instance. Aligned with the rest of the continent, there is still a long way to go when it comes to gender diversity: 90% of the founding teams did not have a single female co-founder, and all but one (Chefaa’s Doaa Aref) had a male CEO.