New Investments Boost Egypt's Start-up Ecosystem
by Amira Salah-Ahmed | 28 July 2017
Egypt's startups have been making headlines in the past weeks, with a number of significant investments pouring into the ecosystem.
For years, Egyptian startups have pushed through a turbulent political and economic climate as well as the labyrinth of rigid regulatory frameworks in the many sectors that have traditionally been slow to accept new, young players.
There has been steady momentum and the ecosystem has exponentially expanded year on year, but it was still lacking some big success stories that would give the endorsement needed to create a snowball effect. While big investments and successful exists began trickling in over the past couple of years, 2017 may just be that start of the snowball effect.
In the past month alone, three big deals were announced.
Just three months old, Swvl, an app that connects commuters with private bus services, secured a $500,000 investment from Careem, the Dubai-based ride-hailing app that has given Uber a run for its money in the region.
Swvl's founder is a former executive of Careem, which itself sealed a major $500 million investment deal from a consortium that gave the regional startup ecosystem a boost. Swvl has said it will use the funding to expand its team as well as its local and regional reach, while also further developing the app's features.
Mumm, the country's premiere homemade food platform, has successfully and steadily disrupted the market since its launch, despite a very competitive and cut-throat food and beverage industry where the turnover rate is quite high. The company has provided an income for the expansive network of home-cooking users, while also making it a point to work with refugees in Egypt.
The model has been proven and it received a stamp of approval in the form of a $200,000 investment from the global venture capital fund 500 Startups.
Egyptian startups can now also look forward to more funding opportunities from regional startup accelerator Flat6Labs. Earlier in July, the accelerator announced the first closing of its LE100 million fund called Flat6Labs Accelerator Company (FAC).
"FAC’s first closing coincides with the newly committed investments from Egypt Ventures, a company of the Egyptian Ministry of Investment and International Cooperation and managed by NI Capital," as well as an equal investment from the Egyptian-American Enterprise Fund (EAEF), according to a company statement.
Over the coming five years, Flat6Labs Cairo will now be able to directly support more than 100 early stage startups by providing seed funding through FAC of up to LE1 million each.
These recent deals reflect the steady growth of the ecosystem, which is no longer nascent and has become viable enough for major local and international investors. Many more opportunities exist for investors looking at the Egyptian market, through startups that are disrupting an array of sectors and industries, offering solutions to longstanding issues.
Given the size of the local market, the chance to expand these startups' user base is boundless with the right investment and guidance.