Cairo & IPOs: Egypt is the newest tech hub
In the midst of regaining its economic footing after 2011’s Arab Spring Revolution, Egypt has begun to turn its hopes of future growth to the world of tech. In some ways, the country is perfectly poised to capitalize on its own growing technological revolution, with start-ups already beginning to crop up across the country. Egypt’s population currently hovers at nearly 100 million, with a staggering 50-60% of its citizens under the age of 30. With the country’s internet penetration on the rise and young, tech-savvy employees ready to enter the workforce, it seems that it should only be a matter of time before Egypt becomes the next major player in the tech game, right? Well, maybe. While all of the key ingredients for success may seem to be in play on the surface, Egypt’s budding technological revolution is still plagued with a number of large challenges.
A future not without its hurdles
Ironically, Egypt’s struggling economy itself has become one of the biggest obstacles towards the rise of new companies that could help get it back on track. At the moment, the Egyptian pound is still on the wrong side of a nearly 18-to-$1 conversion ratio. This has resulted in a major struggle for Egypt when it comes to convincing some of its most promising talent to resist jumping ship to higher paying countries. With the most talented young engineers being offered much higher paying jobs in Europe, China, and the U.S., the temptation to relocate has understandably been hard for many young engineers to resist.
In addition to retaining future industry leaders, another obstacle faced by many would-be Egyptian start-ups is the country’s current bureaucracy. As it turns out, setting up a new business in the country is not all that easy to pull off at the moment. With a government that isn’t always in touch with the process of valuations, finding investors or offering stock options can easily prove to be a tricky venture. Rather than attempt to navigate the somewhat blurry legal process, many companies are simply deciding to set up home base in other countries with more clear cut rules and restrictions. There are, however, Egyptian organizations, such as the RiseUp Summit, which are attempting to educate future Egyptian entrepreneurs on how to facilitate their dreams within their home country.
Defying the odds
After all, history has proven that wherever there are odds, there are always people willing to defy them. Ameer Sherif is the CEO of BasharSoft, a tech firm responsible for the launch of a successful online recruitment tool called WUZZUF. He recently offered reassurance that, despite the challenges, all is definitely not lost when it comes to launching Egypt into the next wave of tech leaders.
“Four years ago, we were the first startup from Egypt to get funding from 500 Startups. Today, there are more than 15 Egyptian startups who raised from the global tech accelerator. I believe regional and global investors have recently become more interested and seen the potential in Egypt thanks to the success stories and growth of local startups have been seeing recently,” Sherif said.
In fact, a number of Egypt’s most significant tech investors have already emerged from within the country itself. Over the last few years, one of the biggest champions of emerging start-ups has doubtless proven to be the Cairo-based capital firm, Algebra Ventures.
Tarek Assaad, the $50 million company’s managing partner, explained that the firm wants to get in on the ground floor of the big picture they can already see starting to develop. “We believe that technology startups in Egypt have the potential and the drive to leverage innovation to disrupt and transform large markets and solve problems at scale. We’ve already seen technology transform our societies and we know that this is just the tip of the iceberg – we want to help build the market-leading companies of tomorrow,” said Assaad.
Egypt’s tech renaissance
Not only does there seem to be a reassuring sense of hope amid Egypt’s economic challenges, but there also seems to be an air of excitement spurned by several Egyptian entrepreneurs who have already churned out multi-million dollar ideas. Among such innovators have been Yasmine El-Mehairy, a young woman who created Supermama, an online platform where Arab mothers can virtually access parenting advice ranging from medical information to cooking recipes. Then there’s Instabug, the Egyptian developed software company that provides a bug and crash reporting app complete with in-app feedback.
The tech revolution has even launched initiatives that may go a long way in helping to ensure higher educational opportunities in the region. In 2012, an online platform called Nafham (Arabic for “we understand”) began launching a series of free educational videos. Since then, the platform has grown to host over 3.6 million video tutorials aimed at making learning accessible to everyone.
Considering the rising surge in Egypt’s tech contributions, many have begun to wonder how emerging companies may contribute to the future market. 2018 saw two Egyptian based companies go public and according to Reuters, three more are hoping to launch IPOs by the end of 2019. Though the companies’ names have yet to be disclosed to the public, two of them alone will reportedly bring a combined market value of roughly $807.78 million in U.S. dollars. The third has yet to be valued, but hopefully, more will be revealed as plans for its launch become finalized.