EGYPT, NEW HUB FOR AFRICAN STARTUPS?

If you are an avid reader of StartuppersClub, you know that South Africa, Kenya and Nigeria are by far the 3 countries with the most startups. But the report of Partech Africa draws attention to Egypt as the next Startup Nation of Africa! Indeed, African startups have raised 2 billion dollars in capital in 2019. And Egypt is in a good position in these fundraising ranking. This Maghreb country is becoming one of the drivers of technological innovation. Partech Africa has identified and analyzed 250 fundraising transactions carried out by more than 200 startups across Africa. The amount raised has almost doubled compared to 2018 (+74%). But another change seems to be taking place within the ranking of African countries. Indeed, Egypt has moved ahead of South Africa by taking second place in the ranking. The number of successful operations by Egyptian startups are 3 times more numerous. And the amount raised has more than tripled, exceeding the overall African performance, which is already significant. Egypt, Startup Nation in Africa: A state intervention As is often the case with such a large national startup scene, there is a state will. This was also the case for Poland, the next European Startup Nation. Indeed, the government led by Sissi is multiplying infrastructure projects that could facilitate the creation of Egyptian startups. Internet access is on the rise with the development of fiber, 4G and soon even 5G networks. Also, the creation of companies has been facilitated on the administrative level. With a very young population, 60% is under 30 years old, the state hopes that future startuppers can easily create their first startups. All the more so as support programs are starting to develop with private and public initiatives, such as the Flat6Labs incubator. Finally, one Egyptian out of two wants to create a company. However, some challenges still await Egypt before it becomes a hub for start-ups. Indeed, setting up a business still costs around 1500$ and raising funds is still more complicated than in Europe. A startup competition in partnership with France The Egyptian state is trying to help local startups as much as possible. The first Franco-Egyptian startup competition was organized in partnership with France. Indeed, from 6 November 2019, the aim of the competition will be to identify Egyptian startups with high potential. These companies, mainly technological, operate in 3 main sectors. Health, the Sustainable City and the flagship topic of the moment, Fintech. The French business community has brought together some fifteen companies and investors including AfricInvest, Crédit Agricole, Axa, Orange and Thalès. On the Egyptian side, training will be organized by acceleration and incubation programs such as Flat6LAbs, Falak and TIEC. The 7 winning startups will be awarded a financial prize (EGP 750,000, or around €43,000 in total), and all will receive support and guidance from the competition partners.

Top 10 fundraising of african startups in 2017

In 2017, investments in African startups have been significantly increasing. The amounts invested climbed by 28% to $ 167K. In its 2017 study, the investment fund Partech Ventures even talks about $ 560M. But this figure takes into account startups whose main market is in Africa and not startups headquartered in Africa. The gap between the two figures shows the real craze of startups for future markets in Africa, which look very promising. The Startuppers Club offers the ranking of the top 10 startups that have received the most investments: PEG, Ghana: $ 13.5M – Solar Energy PEG received in 2017 a $ 13.5M investment in a Series B round led by Blue Haven Initiative and with the significant participation of Engie, EAV, Investors and Partners, Acumen and PCG Investments. The Ghanaian cleantech startup produces solar panels for more than 10,000 homes. The startup is now developing in Ivory Coast, with expansion plans in other West African countries. Twiga, Kenya: $ 10.3M – BtoB / Supply Chain This Kenyan startup, evolving in B2C commerce, raised more than $ 10M in Series A from an investor pool. Investors are Wamda Capital, Omidyar Network, DOB Equity, Uqalo, 1776, Blue Haven Initiative, Alpha Mundi and AHL. Twiga is a mobile-based logistics platform. The startup delivers products from small shops and markets in Nairobi. FlutterWave, Nigeria: $ 10M – Fintech The Fintech Flutterwave was able to raise $ 10M in a Series A round. Y combinator, the fund of the famous incubator, took a stake in this promising startup. Other fundraisers include Glynn Capital, Greycroft Partners and Green Visor. Africa has become the world leader in mobile cash management. Indeed, with more than 110 million customers who have a mobile cash account according to McKinsey research. The Nigerian startup Flutterwave is developing the technology that allows stores to accept and make payments across Africa. Incubated by Y Combinator, startuppers have offices in Lagos (Nigeria), Nairobi (Kenya), Accra (Ghana), and Johannesburg. In 2017, Flutterwave says it has been able to process $ 1.2 billion in payments for 10 million transactions. IOT.nxt, South Africa: $ 8M – IOT The South African startup specializes in the Internet of Things sector. It raised $ 7.7 million from Talent Holdings. The platform, serving businesses, connects new data sources such as sensors, legacy databases, enterprise systems, applications, machines and cloud services. Its service connects people to machines on any network. Solar Now, Uganda: $ 6M – Solar Energy The startup specializing in solar energy raised $ 6M in funds from SunFunder, a fund specializing in the same field as its name suggests. Other investors are associated with this fundraising such as Responsibility Investments AG and Oikocredit. SolarNow provides solar energy solutions and financing for these solutions in Eastern Africa. The startup has already spun off with 46 franchises in Uganda, with high hopes for continental expansion. Vezeeta, Egypt: $ 5M – Healthtech This Egyptian start-up from the Healthtech sector has secured a $ 5M investment from BECO Capital. Other investors in this venture capital are Vostok New Ventures, TDF and Silicon BadiaSeries. Vezeeta is developing a solution that connects the various providers of the health ecosystem. The technology of these startuppers is cloud based. Patients can contact doctors and make appointments, as with Doctolib in France. Vezeeta offers a search engine of doctors with geography, specialty and fees. The service is free for patients. Cars45, Nigeria: $ 5M – E-commerce Cars45 is a startup based in Nigeria. The E-commerce company offers a car buy-back service. The startup has raised $ 5 million in a Series A round. The investment comes from the Frontiers Cars Group specialist. Cars45 builds the infrastructure that allows second-hand car buyers and buyers to find themselves. Provident, the startup has even created inspection centers to record vehicles and gather all the information necessary for a transaction in good conditions. WeThiknkCode, South Africa: 4.5M $ – Ed Tech It may be an emul of Ecole 42 or openclassrooms. WeThinkCode is a program for learning code and programming. The program is free. The goal is to eliminate the lack of technological skills in Africa. The South African startup has raised $ 4.5M from BCX. In exchange for this capital, BCX will recover many program trainees that lasts 2 years. A physical campus was launched in Cape Town in December 2017. Bitpesa, Kenya: 4.5M $ – Fintech Bitpesa surfs on fashionable technology: the blockchain. Indeed, the startup specializing in cryptocurrency payments raised $ 2.5M in Serie A from the US fund Draper VC in January 2017. Then, a second investment round led to a new fundraising for $ 2M from Greycroft Partners. This fund is led by Alan Patricof – the father of seed capital that founded Apax Partners. Founded in 2013, Bitpesa accepts bitcoin payments and organizes currency exchange with local currencies. More than 30 currencies are supported. Oolu, Senegal: 3M $ – Solar Energy This Senegalese startup that was incubated at the Y Combinator raised $ 3.2M in Series A led by Persistent Energy Capital which was joined by the Y Combinator. Founded in 2015, Oolu provides solar power kits consisting of 3 adjustable lights and 2 USB ports. Stored electricity can last up to 6 hours. The start-up installs its solution and maintains it with a limited financial subscription.