Egypt established as African tech hub in 2019: Disrupt Africa’s report

CAIRO - 4 February 2020: Egypt has established itself as an African tech hub to be reckoned with in 2019, according to Disrupt Africa’s recently-released African Tech Startups Funding Report 2019.

88 Egyptian tech startups secured investment over the course of the year, more than any other African country, and accounting for 28.3 per cent of the overall total.

"This represented growth of 159 per cent on the 34 startups that secured investment in 2018."

These startups secured almost US$90 million in funding, a higher figure than South Africa and one bettered by only Kenya and Nigeria. This accounted for 17.4 per cent of Africa’s overall total funds raised, and was up 45.5 per cent on 2018. Africa’s “big three” is now a “big four”.

For now, though, growth has been impressive, and if Egypt can keep this up then we have a very powerful tech hub on our hands in North Africa.

The year 2019 was a record-breaking one for African tech startups, with 311 companies securing US$491.6 million worth of investment.

And whereas in many previous years the data would have shown the vast majority of the funding went to companies in just three markets, namely South Africa, Nigeria and Kenya, 2019 was a little different.

Tarek Assaad, managing partner of Algebra Ventures, a Cairo-based VC firm which has backed 16 companies over the last couple of years said Egypt is generally becoming a more attractive investment destination because of the improving macroeconomic picture and attractive fundamentals like large population and underserved consumer base.

“In fintech, the central bank is taking unprecedented steps to work with tech startups which has encouraged many entrepreneurs to tackle that space.”

Additionally, the success of companies such transport startup Swvl, which has expanded to Kenya, and fintech company Fawry, which became the first venture-backed Egyptian company to go public earlier this year, is giving investors more confidence that Egyptian startups can deliver on the market potential of the country.

Ahmed Ashoor, chairman of Adzily, believes Egypt is a “very promising market” with high growth in population and the number of SMEs.

“This paves the way for us to expand as fast as we can, which makes our economy an interesting one to invest in specifically now,” he said.