Building a Local Entrepreneurship Ecosystem – Challenges and Opportunities Hanan Youssef, OTVentures

1. THE EGYPTIAN STARTUP
ECOSYSTEM
Mar 2014

2. Content
 The Rise of Entrepreneurship in Egypt
 An Overview of the Ecosystem Players
 Is it working?
 Interactions with External Ecosystems
 The Role of Women
 What’s Next?

3. THE RISE OF
ENTREPRENEURSHIP IN EGYPT

4. A skyrocketing Interest in “Entrepreneurship”
Interest over Time “Entrepreneur”
Source: Trends.google.com

5. Triggered in 2011 by a strong adoption of internet usage, digital tools,
and a belief in the power of the individual

6. 3 Drivers
Cultural
Technological
Economic
• A growing sense of
Independence and
“Can do it” attitude
• Utopic Desire to
support local
economy
• Return of
Experienced
Egyptian VCs
• Huge increase in
Internet Penetration
• Mass adoption of
social networks and
digital services
• Slowing Economy
After the revolution
• Lack of new
projects/
investments to
employ educated
youth

7. AN OVERVIEW OF THE
ECOSYSTEM PLAYERS

8. Eco-System Players
Venture
Capitalists
NGOs and
Events
Entrepreneurs
Government
Accelerators &
Incubators
Universities

9. Entrepreneurs

10. NGOs and Events

11. Accelerators and Incubators
 2011 by Sawari Ventures
 6 Rounds – 40 Companies
 Government Backed
 30 Companies
V-Lab
 2013 by AUC
 6 Companies in Round 1
 2014 by Local Digital
Media Company

12. Venture Capitalists
Angels
Individual Angels
 KIAngel
NO Growth Focused
Funds!
Seed and Series A
 2010
 6 Investments
 2011
 22 Investments
 2011
 3 Investments
 2011
 9 Investments
 2012
 3 investments

13. Government & Universities
 Incubators and Events
 Regulations
 Entrepreneur Mind-set
 The Missing Link

14. IS IT WORKING?

15. Replications vs. Innovation

16. Competition VS. Cooperation

17. Raising Capital VS. Bootstrapping

18. Hype VS. Know-How

19. INTERACTIONS WITH
EXTERNAL ECOSYSTEMS?

20. External Ecosystem Interactions
 A closely tied MENA Ecosystem
o Financing
o Cooperation
o Product Markets
o Same know-how
 External Ties
o The Silicon Valley Question
o Global Players focusing on MENA

21. THE ROLE OF WOMEN

22. How are women contributing?
 Women Entrepreneurs
 Women Investors

23. WHAT’S NEXT?

24. The Second Wave of Entrepreneurship in Egypt?
 Growing Beyond the Hype
 Filtering out the crowds
 The Rise of Serial Entrepreneurs
 Creating the need for growth investors

25. Share your thoughts
• Email: Hanan.youssef@otventures.com
• Twitter: @hsyousef

26. EXTRA SLIDES

27. Investments Roundup – 2012/2013
Souq.com
$40M
Jumia*
$61M
Namshi
Digital
Publishing &
Advertising
$6.5M
$13M
MarkaVIP
>$200M
Ikoo
$3.0M
Diwanee
$3.5M
$10M
Easy Taxi
$7M
Himzatee
$1.6M
Careem
$1.7M
Glambox
$1.4M
Cedar Books
Other Ecom.**
$1M
$2.6M
Ecommerce >$130M
Yemeksepeti
$44M
HelloFood
Ground
Transportation
$8.7M
Food Ordering
$52M
$8M
~$0.7M
Gate2Play
~$0.7M
Wixel Studios ~$0.7M
Anghami
Other
* Across Egypt, Nigeria and Morocco
** Swipe&tap, Shahiya, Epecerie, Jamalon,
Mydeal.ma

28. Notable Funds
• STC ventures, managed by Iris Capital $50M
• Building Block Equity Fund managed by MEVP $15M
• Naspers (South Africa) dedicating investments of $634M
into Developing Markets
• Millicom ($426M over 3 years for 50% of Rocket-Internet’s
Latin American and African Holdings)
• Humming Bird Ventures $240 overall with $40M for MENA
• Early Bird Ventures $338M globally
• IdeaVelopers $50M

29. Accelerators and Incubators
• Flat6Labs
• Cairo - 6 cycles with 36 companies graduates
• Established a KSA based program
• Notable companies include instabug, Integreight, Nafham..
• Oasis 500
• First startup accelerator in MENA (Jordan)
• Global partnerships with 500Startups and others
• More than 56 graduates
• New additions in MENA
• JuiceLabs (Egypt)
• PITME (Silicon Valley based, focusing on MENA startups)
• V-Lab (AUC)

30. Notable Startups
• Instabug: Wins First Place at 6th MIT Arab Startup Competition (April
2013) App Testing
• Instabeat: 2014 Best of Innovations Design and Engineering Wearable
heart rate monitor for athletes
• Integreight: Closed Kickstarter funding goal in 6 hours!
• Mubser: Wins “Idea To Product I2P 2013” Global Competition in Sao
Paulo
• Karm Solar: The first company to install a high-capacity off-grid solar
water pumping station in the Middle East and North Africa in April 2013.
• Jeraan and Dakwak receive funding from 500Startups. Dakwak moves
to SV

31. Notable Exits
• Cobone.com: ~$40M buyout by Tiger Global Managemen
• Kammelna: $10M by Peak Games (Saudi cards game)
• Zawya: $40M by Thompson Reuters
• Dubizzle: 50% Buyout by Naspers (un-disclosed $)