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DisrupTECH: Contributing to Egypt’s Growth Journey

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Disruptech co-Founder: Dina H. Sherif, Mohamed Okasha and Malek Sultan (Photo By: Matjaz Kacicnik)

The Arab region is a unique region. We could write about its distinctive historical, socio-economic, and political conditions forever, without running out of material. Yet, in the midst of this wealth of information, we want to zoom right in on a very interesting fact. The region has the world’s lowest bank penetration rate in the world – only slightly over 14 percent are in the formal banking system. If you think that’s what makes our region unique, however, you would be wrong.

The uniqueness only appears when you juxtapose that low bank penetration rate with an internet penetration rate that exceeds 100 percent, a mobile penetration rate that exceeds 100 percent and a smart phone penetration rate that was already at 60 percent back in 2017. This uniqueness is what makes our region, and in particular, our country Egypt – home to the region’s largest unbanked population – fertile ground for financial technology, or what has come to be known as “Fintech.”

This uniqueness is what gave birth to Fawry, a company established in 2009 by the Managing Partner of Disruptech, Mohamed Okasha, and his colleague Ashraf Sabry. Back in 2009, nobody in Egypt knew what fintech was, but everyone knew that there was a deep need to solve the problem of digital payments. Fawry not only tackled that problem, but it created a space for others to innovate and design market solutions to the multitude of problems that surround the lack of access to traditional forms of financial services by those considered ‘unbankable’ or simply ‘unreachable.’

In 2019, Fawry became the first fintech company to IPO in the region and since taking that step, the price of its stock has risen by 300 percent. Last week, Fawry became Egypt’s first tech ‘unicorn,’ born in the midst of a global pandemic and what is quickly becoming a global economic meltdown of massive proportions. If this is not testimony to the importance of this sector and the opportunities that lie within it, then we are not sure what is.

If you don’t believe that Fawry’s unicorn status and the birth of numerous rapidly growing startups in the space are proof that fintech is the future or that this sector will be critical to Egypt’s ability to achieve its commitment to inclusive and sustainable economic growth under Vision 2030, forget all of that and focus on one simple reality. In the midst of the global pandemic, Egypt and many similar countries in the region and beyond are finally introducing laws and regulations that will not only allow this sector to thrive, but will allow our economies to thrive by using technology to serve the millions of people who remain economically excluded from the system.

Further to the above, recent studies have demonstrated that providing fintech services to the unbanked and MSMEs alone can generate additional annual revenue in the billions. According to a 2020 CGAP funded report on the landscape of Fintech in the Arab World (https://www.findevgateway.org/sites/default/files/users/user331/CGAP-EY_FintechRegionalReport_ArabWorld_2020.pdf), the region boasts significantly high survival rates, making these companies attractive for investors. For fintech companies launched in 2014, 90% survived. With that in mind, it comes as no surprise that the 2019 MENA Fintech Venture Report (http://mcit.gov.eg/Upcont/Documents/Reports and Documents_4112019000_MAGNiTT_ADGM_2019_MENA_FinTech_Venture_Report_EN.pdf), highlighted a total of USD 237 million that were invested in 181 deals since 2015.

The enormous potential that lies within the fintech space was a part of why Mohamed Okasha stepped down from his leadership role at Fawry to launch Disruptech, Egypt’s first VC Fund to focus on fintech and fintech-enabled startups in Egypt. Stepping down from Fawry at a time where it was clear that the company was heading towards a billion-dollar valuation was built around a desire help entrepreneurs who have entered this space avoid the same sacrifices and hardships experienced during Fawry’s growth journey.

Disruptech’s mission is to provide access to capital, specialized expertise, and the networks required for entrepreneurs in this sector to thrive and have impact on Egypt’s growth journey. This mission is reflected in the expertise and professional history of the partners and advisors brought in to join the team – Malek Sultan, and Dina H. Sherif who joined as partners, in addition to Mohamed Aboulnaga who joined as a Senior Advisor.

Also Read: Lindelwe Lesley Ndlovu, African Risk Capacity (ARC) CEO Shares Goals, Disaster Risk Solutions, COVID-19 and Future

For the Disruptech team, establishing this fund – however hard it may be – is built on a solid belief that Egypt, the country that each of us loves deeply, cannot continue as is. We believe in Egypt’s potential, and we know that fintech is not just about financial inclusion, it is about economic inclusion, as a dear friend of Dina’s, Efosa Ojomo, from the Clay Christiansen Institute would say (https://www.christenseninstitute.org/blog/chasing-financial-inclusion-is-a-red-herring-economic-inclusion-should-be-the-goal/). Egypt is at a critical inflection point in its growth journey and many entrepreneurs are rising to the occasion.

Our goal is for Disruptech to be a solid contributor in the story of Egypt’s future growth and its embrace of technology as a critical and essential tool within that inclusive growth journey.

Article By: Dina H. Sherif, Mohamed Okasha and Malek Sultan

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Investment

ILLA, an African asset-light FMCG Logistics Company Raises $2M Investment Round

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ILLA Team (Image: Supplied)

Cairo-based FMCG Logistics company ILLA secures a $2M investment round to boost its growth in the market and diversify its offering to the FMCG value chain. The round was co-led by Watheeq Financial Services and Golden Palm Investments. The round saw participation from Loftyinc Capital Management, Kepple Africa Fund, Cubit Ventures, AUC Angels, Oqal Angel Network and FLat6Labs Cairo doubling down on its investment in ILLA for the third time

Founded in 2019 by Mahmoud Elzomor, Alaa Jarkas, Ahmed Sakr, and Hossam Saraya, and shortly joined by a well versed management team with Mohamed Emera as Director of Growth, Mohamed Kamal as CFO, and Khaled Elzomor as Commercial Director ILLA aims to optimize post-production supply chain activities for FMCG brands, starting with middle-mile delivery services, being the most fragmented part of the value chain.

By focusing exclusively on the FMCG market, ILLA was able to capture the business and trust of over 65 clients in its portfolio, with household names to the likes of Coca-Cola, P&G, Danone, Nestle, Juhayna, and Pepsico.

Since 2019, ILLA has been delivering on its core promise of moving goods with efficiency on behalf of FMCG brands, spanning over 5,000,000 KM and completing over 250,000
transactions, across 27 governorates in Egypt leveraging its tech platform to power delivery
operations

Before ILLA, FMCG brands had to rely on a variety of owned and outsourced assets to manage their delivery operations, and that adds to the pain of a fragmented logistics cycle, which gave way to the value offering of ILLA to those brands; a streamlined value chain with visibility, control and growth potential for each individual brand, with ILLA acting as an asset-light logistics  company, leveraging its tech platform and operational intelligence to deliver an unparalleled experience to FMCG brands.

“ILLA will use the funds to fuel its expansion and growth in Egypt and disrupt the traditional route to-market for FMCG companies and SMEs, while building more around its tech platform to deliver more value to its clients and drivers alike”, says Mahmoud ElZomor, Co-Founder and CEO of ILLA

“Mahmoud and the team are tailor-made for ILLA, bringing decades of diversified experience to help drive efficiency into the $15 trillion global FMCG market. With the onset of covid, the global supply chain management industry is suitable for modernization, and ILLA is uniquely positioned as an end-to-end execution platform. In addition, ILLA’s smart logistics solutions also play a crucial role in providing a full stack of operational solutions that will disrupt the sector, and will change the behavior for all stakeholders within the FMCG market,” said Khaled Zaidan of Watheeq Financial Services.

“Middle-mile logistics is one of the most underinvested segments of the global supply chain market. ILLA has identified this massive opportunity in MENA and is offering a full-stack B2B supply chain management platform enabling FMCG brands to reach retailers directly at the lowest cost per case. Mahmoud and team are utilizing the trucking logistics shared economy and tech automation to innovate within a large and fast-growing market.”AJ Okereke, Partner, Golden Palm

 

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Press Release

Africa’s CEOs to empower youth for the digital age at the All4Youth Regional Alliance flagship event

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All4Youth Regional Alliance Senior leaders (Image: All4Youth SSA)

We aim to support 1 million young people to find work and plan their transition to the digital economy between now and 2022 through a flagship event of All4Youth Regional Alliance, “CEO & Youth Connect”. A collaborative intervention led by various multinational companies dedicated to reduce youth unemployment across Sub-Saharan Africa. Senior leaders from the alliance will meet on November 8, 2021, to discuss skills of the future required in their organizations as well as share programs, training, and initiatives designed to prepare youth for the digital era. 

The COVID-19 pandemic has created an economic crisis, forcing tens of millions of people out of work. As economies continue with the reopening journey, some jobs may not come back, yet we continue to see a rise in the number of youth joining the job market. “We have therefore put the best of our resources to support this recovery, including using data to understand the most in-demand roles, supporting with skilling and reskilling needs for job seekers and job creators. Partnerships such as this will play a critical role and will support us to scale us to more youth and increase the impact across the African continent” noted Ghada Khalifa, Director for Microsoft Philanthropies for Middle East and Africa.

Bruno Olierhoek, Chairman and Managing Director at Nestlé East and Southern Africa Region emphasized the importance of senior leaders taking keen interests in the development and ultimate successes of the youth.  “We are driven by our inspiring purpose that is so relevant in our East and Southern Africa Region (ESAR) and we want to do good by addressing societal challenges such as climate change, sustainability and youth unemployment. To help contribute to these major challenges, we realize the need to work in an ecosystem which is entrenched around long-term thinking, with immediate actions. Through our involvement in different programmes supporting the youth in Employment & Employability, Entrepreneurship and Agri-preneurship we are committed to continuously define projects that are fully integrated in our value chain for them to be viable over the long term and be able to make a real meaningful impact for the community and us.”

“The youth of today are the builders and leaders of tomorrow. As Adcorp we know that enabling agility, focus and skill in the youth of today is the key to unlocking their potential for tomorrow ‘’ highlighted Dr John Wentzel, Chief Executive Officer, Adcorp Group. 

In the last two years, alliance partners have reached over 150,000 young people, empowered over 3000 young people through employability and mentorship programmes.  Giving high potential young talent access to a network of high performing industry professionals that accelerate opportunities, career and personal development goals.

We encourage young people to register for the upcoming event to click here and learn more about in-demand skills, insights to future of work and opportunities alliance partners have available for youth. 

 

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Investment

Fawry Invest in Sudanese Classifieds and Marketplace Platform alsoug, Marking First Overseas Venture

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 Fawry CEO Eng. Ashraf Sabry (Image: Supplied)

Fawry establishes strategic partnership with Sudanese consumer platform with an eye to scaling up technology platform beyond Egypt.

Fawry (the “Company”, FWRY.CA on the Egyptian Exchange), Egypt’s leading provider of e- payments solutions and digital banking services, announced today that it has finalized an investment in alsoug.com, Sudan’s largest online classifieds platform and marketplace, to help build out alsoug’s new fintech platform, Cashi. Fawry has acquired a strategic minority stake in the alsoug.com/Cashi holding company, marking the Company’s first venture capital investment outside of its Egyptian home market. The investment comes as part of Sudan’s first announced venture capital funding round.

Fawry played a leading role in ensuring the success of the USD 5m round, with the Company’s presence catalyzing involvement from other strategic Western VC players. As a strategic investor in alsoug, Fawry intends to leverage its long track record with white label technology solutions to help the platform expand in scale, enhancing the platform’s merchant acquisition operation, refining its go-to-market approach, and providing valuable insights that inform high-level strategy across all segments of the business.

Founded in 2016 by a world-class team of technology entrepreneurs, alsoug is now Sudan’s leading consumer internet platform and its largest digital marketplace. Alsoug is one of Sudan’s most downloaded apps on the Google Play app store with two million downloads and is a platform where sellers can list everything from real estate and cars to services and commodities.

Despite the political and economic headwinds experienced by Sudan as it goes through a transformative political transition, the platform has grown rapidly since 2016, reflecting alsoug’s highly skilled team of in-house developers, comprehensive coverage by its on-the-ground teams, as well as Sudan’s promising economic fundamentals. Moving forward, and building on the strategic partnership with Fawry, alsoug will significantly expand its service offering by building a new payments network capable of serving customers across Sudan, one of the largest countries on the African continent.

“We’re delighted to be kicking off our partnership with alsoug, one of Sudan’s most exciting prospects and a Sudanese leader in tech innovation. This is our first investment foray outside of Egypt in our thirteen years of operation, and we’re confident that our story with alsoug and Cashi will be a special one. Fawry’s investment in alsoug delivers on our plans to venture into underserved international markets by leveraging our technology and teaming up with strong local players. This investment will provide us the opportunity to strategically expand our footprint into Africa and transfer the experience we’ve gained in the dynamic Egyptian market to neighboring Sudan, an economy with major potential across several sectors and with a significant pool of entrepreneurial talent. Meanwhile, Fawry’s strategic partnership with alsoug leaves it ideally placed to help guide the platform’s rollout of a countrywide payments system, a feat which Fawry has already managed through a scalable, robust, and best-in-class technology platform.” said: Fawry CEO Eng. Ashraf Sabry

“This investment marks a significant milestone not just for alsoug, but for the nascent tech space in Sudan as a whole, which has until today been essentially shut out of the global capital markets. I hope this investment is the first of many and that the huge potential of the tech sector in Sudan is fully realized in the coming years. We are looking forward to working with Fawry, and our new strategic shareholders, to continue our expansion from the classifieds and marketplace space into payments. We will build a payments platform that will deliver financial inclusion to all Sudanese.” said Alsoug co-founder and CEO Tarneem (Nina) Saeed

 

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