Universities, among others, are leading Egypt as a tech powerhouse for Africa as the country now rivals – and even sometimes surpasses – more established start-up ecosystems such as South Africa, Nigeria and Kenya for levels of entrepreneurial innovation and investment.
Egypt is building up an impressive track record in the tech start-up space, according to the Egyptian Startup Ecosystem Report 2021 released at the end of October 2021.
The report is the first geographically focused publication prepared by Disrupt Africa that dives into the local ecosystem by analysing active start-ups, local support networks and funding and exit activity over the past seven years.
Egypt has been adding 114 tech start-ups per year to its ecosystem from a paltry 10 in 2015, according to the report.
The report indicated that at least 562 tech start-ups were in operation across Egypt as of September 2021, making it the fourth-largest start-up ecosystem on the continent, following South Africa, Nigeria, and Kenya. Among them, these start-ups employ almost 13,000 people.
The start-ups are also supported by a strong investment ecosystem. At least 318 Egyptian start-ups have raised almost US$800 million since 2015, according to the report, and capital inflow into the ecosystem has been growing year on year. Annual funding secured by the companies has risen significantly from US$8.6 million to US$156 million in 2020.
E-commerce is the most populated sector, with 20% of the country’s tech start-ups active in that vertical. There are almost twice as many e-commerce and retail-tech start-ups as fintech, which came in second. Start-ups are active across a diverse array of spaces, including e-health, ed-tech, logistics, recruitment, and AI/IoT.
Almost 40% of Egyptian tech start-ups have undergone some form of acceleration or incubation, indicating a local support ecosystem that also incorporates government, corporates and universities.
University-led start-up support programmes
According to the report, Egypt is at the forefront when it comes to university-led start-up support programmes, with a host of initiatives that go beyond simply offering courses on business and entrepreneurship. Several tertiary institutions have rolled out initiatives that provide early-stage start-ups with access to training, mentorship, networks and even funding.
For example, the American University in Cairo (AUC) Venture Lab (V-Lab), Egypt’s first university-based start-up accelerator, established Africa’s first university-based angel-investment network with a mission to create an angel-investor community at AUC to invest in innovative Egyptian start-ups.
Cairo University established the Faculty of Economics and Political Science Business Incubator, FEPS BI, that provides the necessary workshops, training, mentorship, seed funding, and consultancy for students and graduates who want to create start-ups, or already have prototype businesses or their own businesses.
The NilePreneurs initiative of Nile University supports start-ups and SMEs in the domains of manufacturing, agriculture, and digital transformation through applying different innovation instruments. In addition, Assiut University hosts the Hemma (‘fervour’ in Arabic) incubator that supports start-ups focused on health, food, water and manufacturing.
The Heliopolis University for Sustainable Development runs the Entrepreneurship Centre for Social Impact based around agriculture and food production, and the Al Azhar University’s Rawaq business incubator focuses on water, agricultural waste management and renewable energy. Alexandria University’s Artificial Intelligence Minds is Egypt’s first AI-specialised incubator.
Universities of Canada in Egypt (UofCanada) and Ryerson University’s tech incubator the DMZ launched the DMZ Cairo sector-agnostic incubator aimed at supporting scalable Cairo-based start-ups.
Nurturing entrepreneurial drive the way forward
Magdi Tawfik Abdelhamid, professor in biotechnology at Egypt’s National Research Centre in Cairo, told University World News that, “With the employment of thousands of university graduates and the impact on economic growth, this report strongly demonstrates that nurturing entrepreneurial drive to empower a generation of start-ups is the way forward for universities to work as a catalyst to achieve the Sustainable Development Goals.”
He said Egyptian and African universities must join forces and establish partnerships with national, regional, and international organisations. Alliances with the industry and the private sector to equip students with an entrepreneurial mindset and support them to launch start-ups and nurture them into full-fledged businesses should also be formed.