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Egypt tech startups get vote of confidence from Wamda Capital's investments in Aqarmap & Crowd Analyzer
Egypt tech startups get vote of confidence from Wamda Capital's investments in Aqarmap & Crowd Analyzer

Dubai, UAE, November 21, 2018:  Wamda Capital’s recent investments in two Egyptian tech startups – Aqarmap and Crowd Analyzer – is a vote of confidence for other entrepreneurs in the country and investors abroad. With Egyptian startups securing bigger and later stage investment rounds in 2018, the venture capitalist firm says the pipeline potential in the MENA region’s most populous country looks promising. 

Earlier this year, Wamda Capital became one of three Series A investors in Aqarmap, an online real estate marketplace based in Egypt that helped sell more than 15,000 properties in 2017. Wamda Capital also participated in a $1.1 million funding round for Crowd Analyzer – an Arabic-focused social media monitoring platform founded and developed in Egypt in 2013, with headquarters in Dubai.

Commenting on the investment potential in Egypt, Khaled Talhouni, Managing Partner at Wamda Capital said: “Our twin investments in Aqarmap and Crowd Analyzer demonstrate our conviction in the enormous potential and opportunity in the Egyptian market and its entrepreneurial talent. Aqarmap is primarily serving the local economy whereas Crowd Analyzer is a growing regional business that evolved from Egypt.

“The macro environment in Egypt has improved significantly over the past 12 months and that has led to increased growth in the startup ecosystem as evidenced by a number of companies closing significant funding rounds in the past few months. We definitely are witnessing a resurgence of pipeline and we are keen on engaging in the Egyptian ecosystem and investing further.” 

According to Seedstars Insights, the first half of 2018 saw 13 deals in Egypt, including Samsung’s acquisition of knowledge engine startup Kngine. With a total of 10 disclosed investments amounting to $17.8 million, H1 2018 saw a 21.4 percent increase in funding over the total $14.66 million raised in 2017.

Established in 2011, and now the leading real estate marketplace in Egypt and Saudi Arabia, Aqarmap has managed to overcome several hurdles to succeed in the Egyptian market and expand regionally. Amad Almsaodi, CEO and founder of Aqarmap says “There is huge potential in the Egyptian market - although the GDP per capita might be one of the lowest in the region, the sheer size of the market eliminates this point. For those seeking finance, it depends on the stage, if it’s pre-seed or seed there are plenty of options. For series A, the options are extremely limited, and regional investors are still hesitant about investing in Egyptian startups unless they build products that get sold outside of Egypt. Startups in this phase really need to focus on building a strong business that generates revenue to help them cover their basic financial needs while they look for funding.” 

The Egyptian government has been putting a lot of effort and resources into creating a dynamic environment for entrepreneurs and investors alike. Much work has been done over the past few years to improve the investment laws, bankruptcy laws and corporation laws making it easier for VCs to operate in the country. The Ministry of Investment and International Cooperation (MIIC) allocated funds for investing in startups through Fekretak Sherketak, a nationwide initiative for supporting idea stage entrepreneurs, and its venture fund Egypt Ventures. These have in turn been supporting local acceleration programs.

Talhouni added: “While there has been a high level of activity in Egypt’s tech ecosystem recently, there is still a gap in financing available for entrepreneurs across the spectrum. We are optimistic that the government initiatives and funds that have been announced and/or launched will help drive the ecosystem forward and address some of the more unique challenges facing Egyptian entrepreneurs.” 

Despite the increase in early-stage investments in Egyptian startups, there is still a lack of later stage investments. Another big challenge facing local startups is the brain drain. Egypt is losing a great deal of senior and experienced talent, who are increasingly being poached by global companies. Local companies are now competing with international firms for good, experienced talent.

Crowd Analyzer was one of many Egyptian startups to successfully use Egypt as a launchpad and base for its technology development. But scaling regionally saw the company relocate its headquarters to Dubai. According to Ahmed Saad, cofounder and CEO at Crowd Analyzer, Egypt’s considerably large population directs the entrepreneurial mindset towards B2C businesses like Careem or SWVL where purchasing power is a direct result of the sheer volume of transactions. This makes it a tough market for B2B businesses because companies in Egypt allocate a small budget for tech services. 

Now servicing the UAE market, Saad explains why Egypt needs to do more to support high potential startups that are entering a scale-up phase. “The Egyptian economy has been challenged in the past few years. We've seen the devaluation of the currency and the cuts on oil and gas subsidies. It's easy to start a business, and it’s easy to survive, but it's hard to scale up. I think that Egypt has a problem with the phase itself. We need to encourage the market to appreciate and trust startups more.I believe entrepreneurship is one of the main industries that offers a path to improving the country’s economy.”

Posted by : Dubai PR Network Editorial Team
Viewed 8534 times
PR Category : Banking & Investments
Posted on : Wednesday, November 21, 2018  2:23:00 PM UAE local time (GMT+4)
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