The venture capital firm 500 Global plans to increase its investments in Egyptian startups during the current quarter, which ends in March. This move comes after the firm already financed four emerging entities in the Egyptian market last year, according to Amal Anan, the managing partner at 500 Global. Anan revealed that from 2013 until 2023, the fund has invested around 30 million US dollars (approximately one billion Egyptian pounds) in 65 Egyptian companies, including Money Fellows and Maxab, along with Homzmart and Wuzzuf.
She explained that the average funding provided to startups ranges between 50,000 and 500,000 dollars, noting that most of the firms funded by the fund received financings ranging between 250,000 and 350,000 dollars per round. The size of the funding is determined based on several factors such as the strength of the team and the company’s growth potential, especially since the fund treats the new entity as a partner rather than just an investor.
The fund has also signed a partnership agreement with the Information Technology Industry Development Agency (ITIDA) to open an office in Egypt, which will be its first on the African continent. The goal is to develop the capabilities of startups and support digital innovation and entrepreneurship among the youth.
Since its inception in Egypt, the fund has been working to support Egyptian entrepreneurs by providing assistance to the talents available in the Egyptian market and offering the appropriate tools to turn their ideas into successful projects.
Investing in Companies and Promising Sectors Anan added that the fund invested in four emerging Egyptian entities last year and is considering supporting more startups in the Egyptian market during the current quarter.
She clarified that the fund supports startups that have passed the establishment phase, formed a work team, and already have a product in the market to ensure its success and consumer acceptance.
Anan pointed to several promising sectors that the fund prefers to invest in, such as fintech and health, in addition to the sustainable development sector, which is considered one of the underserved markets in Egypt and can accommodate many technologies that emerging entities seek to provide in the market.
Business Expansion Program Anan mentioned that the fund organizes a week-long camp for about 25 startups in the (establishment phase), in addition to providing experts in entrepreneurship from Asia, America, and Europe to help these companies develop their administrative structures and business models.
The support includes designing management and marketing plans, in addition to proper planning for the desired growth and attracting global investments, known as the (business expansion program).
Anan confirmed that the fund owns incubators and business accelerators in the Egyptian market, along with specialized programs for private universities in and outside Cairo, in addition to several non-profit organizations aimed at attracting talents with feasible project ideas.
The Unique Features of the Egyptian, Gulf, and African Markets In a related context, Anan explained that the Egyptian market is distinguished by its large size, which contributes to the rapid growth of startups, in addition to the presence of major institutions that help grow entrepreneurship, such as universities, private sector companies, and multinational corporations.
She noted that the Gulf markets, especially the Saudi and UAE markets, are distinguished by the incentives provided by governments to create an influential investment environment that ensures cooperation between entrepreneurs and investors, which in turn establishes promising entities that become the nucleus for major regional companies serving the entire region, not just a specific country.
Anan also observed that Egypt is one of the four major countries in entrepreneurship in Africa, along with South Africa, Kenya, and Nigeria, noting that the African market, in general, is characterized by a large proportion of youth in its demographic composition, in addition to a large percentage of the population relying on the internet.
She pointed out some differences between the Egyptian market and the other three countries, including that the workforce in those countries does not enjoy the same level of education and culture available in Egypt, nor does it have a unified language like the Middle East and North Africa, and it goes through various economic and political fluctuations from time to time.
The Fund’s Investments Around the World The fund invests in many fast-growing technology startups around the world and has a diverse portfolio covering different geographical regions, with investments in about 2,800 startups worldwide.
The American venture capital fund, 500 Global, began its investments in the Middle East in 2012 and made its first investment batch in Egypt in 2013, focusing on investing in startups in their early stages.
