BUILDING STARTUP ECOSYSTEMS AHMED EL ALFI
PRE-2011 EGYPTIAN ECOSYSTEM AT A GLANCE “Tech” had a Different Financing Limited to 1 2 3 Seed Stage Funding Definition Traditional Industries Initiatives and policies were Limited to individuals backed by Minimal VC funding 2006 - focused on outsourcing personal wealth 2011 activities Lack of funding for a high growth Private equity focus on Value creation was limited to innovative companies traditional industries, larger client countries Frustration increased the brain investments Local talent was head hunted drain Startups are viewed as “un- to join multinationals abroad bankable” for debt financing 2
BUILDING A BALANCED ECOSYSTEM The GrEEK Campus, Flat6Labs and Sawari Ventures pioneered the development of the Egyptian entrepreneurial ecosystem, launching the first tech hub, seed stage investment vehicle and one of the first venture capital firms 1 2 3 GET INSPIRED AT THE HUB START UP AT THE ACCELERATOR SCALE UP WITH VENTURE CAPITAL Enabling the Ecosystem Concept Seed Go-to-Market Scaling Growth An early and growth stage Ecosystem foundation for like An accelerator to help turn investment pioneer targeting minded innovators to collaborate, innovative ideas to market knowledge-driven and innovate, and grow ready companies 3 scalable companies
TECHNOLOGY PARK IN THE HEART OF CAIRO Launched in 2013 Location in Downtown Cairo 5 buildings covering 25,000 m2 Co-working spaces, and offices 130+ companies and 1,000+ employees Center for technology and entrepreneurship events Access to resources with domain, functional and market expertise, to collaborate and grow. Promotes interaction, openness and educational development. Created a viral effect on society 4
GrEEK CAMPUS EXPANSION THE GrEEK CAMPUS IS EXPANDING IN EGYPT & REGION First expansion, is in Assiut in collaboration with Silicon Waha & TIEC/ITIDA Created a consortium of 9 ecosystem companies to collaborate and create a functioning hub in Upper Egypt The GrEEK Campus currently working on other locations in Egypt, as well as in KSA and other MENA countries What we look for: Central location Ease of access to public transportation Buildings with gardens and courtyards To be able to separate from outside world to manage collaborative and business focused environment 5
THE LEADING SEED INVESTOR AND ACCELERATOR MENA ACCELERATOR OFFERING 6 Locations, 1 more within a year 200+ companies seeded Local strategic partners Funding Office Coaching Legal Weekly Training Space Support Pitches First Accelerator globally to receive funding from IFC and UK FCO General and themed verticals Network Mentors Startup Demo Day Media & Perks Events PR First Arab member of the Global Accelerator Network NOTABLE PORTFOLIO COMPANIES (“GAN”) 350+ Mentors & Coaches $12m+ follow-on funding secured by graduates 1K+ High-impact Jobs 6
Started in Cairo Now in 6 Locations + 1 MORE IN PROGRESS Casablanc a Jeddah Bahrain WWW.FLAT6LABS.COM 7
A GLOBAL NETWORK GA GA N N GA FRIEN N DS GA GA N N TU BEY N AU FRIEN CAI DS H GA FRIEN N GLOBAL ACCELERATOR NETWORK BA DS H JED GA N FRIEN GA DS PARTNERS N FRIENDS GA GA N N FLAT6LABS PROGRAMS AU TU JE GA H N D N GA N BA BE CAI H Y APPLICANTS 8
VENTURE CAPITAL FUND FOR NORTH AFRICA Founded in 2010, Sawari Ventures is a leading venture f I S V N capital firm based in Cairo EGP. 1 Billion fund, investing in technology Sawari Ventures North Africa Fund I Tunisia 36% IRR for current portfolio Morocco Exits to Global Conglomerates Egypt Realizing the capital to talent imbalance in North Africa, Sawari is expanding its investments to include Tunisia & Morocco Sawari Ventures North Africa Fund I is a USD 70 mn fund covering Early & Growth Stage investments in Egypt, Tunisia, & Morocco Sawari adheres to responsible investments targeting positive impact 9
THE 3 ENTITIES SPURRED THE RISE OF AN ECOSYSTEM 1 2 3 4 Inspiring Starting Up Early Stage Late stage Scalability Idea Company Product Enabling the Ecosystem Seed Growth Concept Go-to-Market Development 5 Experience & Support Networking | Public advocacy Mentoring | Coaching Skills | Trainings Hosting | Working space 10
STILL, EGYPTIAN ECOSYSTEM HAS ROOM FOR MORE VC Investments Investment/Engineering Country Engineering Graduate Made (USD M) Graduate (USD) Lebanon $116 4,100 $28,293 Jordan $16 9,126 $1,797 Morocco $6 9,200 $652 Egypt $16 32,000 $513 11
EGYPTIAN ECOSYSTEM SUCCESS STORIES Joined Flat6Labs Cairo 2012 Cycle Founded in 1994, Founded by Haytham ElFadeel, a receiving USD 10k investment, ITWorx is the largest and most self taught computer scientist, during the program, impactful company in the Egyptian creating a natural language search Instabug later got admitted in Y- IT ecosystem, expanding to 12 engine Combinator raising USD 120k and countries and over 1000 employees In 2011 Kngine approached Sawari received a USD 1.7M follow on Exited to Capital Trust, VC Bank Ventures resulting in USD 275k investment from Accel Partners and Proparco in 2007 investment Now on over 1 Billion mobile Achieved superior performance vs. phones with clients including EVI, SIRI and Wolfram Alpha Paypal, Philips, Yahoo, Hilton, lyft Acquired by Samsung to build their and Xiaomi allowing the company SIRI equivalent, Bixby to break-even within 10 months Fawry is the biggest e-payment Founded in 1992 Founded in 2002 network in Egypt, handling more Egypt’s leading internet service Designs baseband and RF/analog than 1.5m transactions daily provider - being the first to offer circuits for the wireless broadband Received investment by TDF in internet services in the country market 2007 Acquired by Orange Egypt (Mobinil) Sold to Intel in 2011. In 2015, 85% of Fawry was acquired in July 2010. for $100M 12
THEIR SUCCESS IS BEYOND EXIT VALUE A look at Cairo’s success stories shows that local tech companies have directly and positively impacted the economy through job creation and economic growth, but also directly contributing to the expansion of the sector. The case of ITWorx is particularly striking: its influence has not been limited to the economic growth of its expansion and its direct job creation, but it has also acted as a lever for the birth of 100+ tech companies. The more success stories we witness the more youth are inspired to start their own creating a series of ripple effect lasting generations High growth companies also train large numbers of university graduates. 13
EXPANDING ACROSS THE MIDDLE EAST AND AFRICA Establish an Ecosystem Expand on a National Level Create a Global Impact 1 2 3 Establish strong partners Lobby with the government and Attract FDIs and international Adapt to cultural aspects large local institutions to include investors Create a hub to be the beacon of innovation as part of the mandate Capitalize on international innovation Rally nationwide support and spread network to help local startups Seed innovation & creativity the entrepreneurship culture global presence Listen to the youth Overcome the focus on the capital Boost export oriented Lead other ecosystem members’ cities companies across several growth Catalyzing local capital formation sectors Shifting investors from low risk Cement local Venture Capital as an debt to long term equity based asset class funding 14
LESSONS TO SHARE ” 1. Young populations, young countries 2. Shift from Extractive to Creative 3. Human talent not minerals, oil, and agriculture “We always talk about time 4. Innovation and risk taking incompatible with travelers going to the past and debt funding changing something that 5. Equity investment a must for high growth impacts our world, instead we need to focus on changing companies something that will have a major 6. Build a balanced self-sustaining ecosystem impact on the future of the 7. Adapt to each location world” 15
Ahmed El Alfi Chairman & Founder, Sawari Ventures/Flat6Labs/The GrEEK Campus Email: alfi@sawariventures.com @AoAlfi
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