building a local entrepreneurship ecosystem – challenges and opportunities

THE EGYPTIAN STARTUP ECOSYSTEMMar 2014

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?

THE RISE OF ENTREPRENEURSHIP IN EGYPT

A skyrocketing Interest in “Entrepreneurship”

Interest over Time “Entrepreneur”

Source: Trends.google.com

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

3 Drivers

Cultural

• A growing sense of Independence and “Can do it” attitude

• Utopic Desire to support local economy

• Return of Experienced Egyptian VCs

Technological

• Huge increase in Internet Penetration

• Mass adoption of social networks and digital services

Economic

• Slowing Economy After the revolution

• Lack of new projects/ investments to employ educated youth

AN OVERVIEW OF THE ECOSYSTEM PLAYERS

Eco-System PlayersVenture

Capitalists

Entrepreneurs

Accelerators & Incubators

Universities

Government

NGOs and Events

Entrepreneurs

NGOs and Events

Accelerators and Incubators

2014 by Local Digital Media Company

2011 by Sawari Ventures 6 Rounds – 40 Companies

Government Backed 30 Companies

V-Lab

2013 by AUC 6 Companies in Round 1

Venture Capitalists

2010 6 Investments

2011 22 Investments

2011 3 Investments

2011 9 Investments

Seed and Series AAngels

2012 3 investments

Individual Angels KIAngel

NO Growth Focused Funds!

Government & Universities

Incubators and Events

Regulations

Entrepreneur Mind-set

The Missing Link

IS IT WORKING?

Replications vs. Innovation

Competition VS. Cooperation

Raising Capital VS. Bootstrapping

Hype VS. Know-How

INTERACTIONS WITH EXTERNAL ECOSYSTEMS?

External Ecosystem InteractionsA closely tied MENA EcosystemoFinancingoCooperationoProduct MarketsoSame know-how

External TiesoThe Silicon Valley QuestionoGlobal Players focusing on MENA

THE ROLE OF WOMEN

How are women contributing?

Women Entrepreneurs

Women Investors

WHAT’S NEXT?

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

Share your thoughts

• Email: Hanan.youssef@otventures.com

• Twitter: @hsyousef

EXTRA SLIDES

Investments Roundup – 2012/2013 >$200M

Souq.com $40M

Jumia* $61M

Namshi $13M

MarkaVIP $10M Easy Taxi $7M

Diwanee $3.5M

Ikoo $3.0M

Careem $1.7MHimzatee $1.6M

Glambox $1.4M

Cedar Books $1M

Digital Publishing & Advertising$6.5M

Ground Transportation$8.7M

Ecommerce >$130M

Yemeksepeti $44M

HelloFood $8M

Food Ordering$52M

* Across Egypt, Nigeria and Morocco** Swipe&tap, Shahiya, Epecerie, Jamalon, Mydeal.ma

Other Ecom.** $2.6M

OtherAnghami ~$0.7MGate2Play ~$0.7MWixel Studios ~$0.7M

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

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)

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

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 $)