Egypt, one of the oldest civilizations, is today becoming one of the hottest investment destinations. Seven years ago, the Egyptian government adopted a long-term strategy to boost the performance and economic attractiveness of the country. Starting with monetary reforms with the assistance of the IMF, Egypt has implemented one of the most successful programs of economic turnaround. The Egyptian experience was praised by all international institutions and is presented as the example for developing countries to follow.
In parallel with monetary reforms, the authorities have been conducting many infrastructure megaprojects (transportation, energy, digital transformation, legislative) to prepare Egypt for a long period of sustainable growth.
The fruits of these reforms and huge investments are already having an impact on the Egyptian economy. Based on IMF predictions, Egypt will be one of only 18 countries to enjoy economic growth in 2020 (revised upwards to + 3.5% in September after a June forecast of 2%). Long-term growth should be close to 8%.
Growth is accelerating, and business opportunities are emerging like nowhere else in the world. Egypt is clearly open for business. Having worked during 20 years in 15 countries located in 3 continents, I can confirm that the magnitude of change achieved by Egypt, greatly surpasses anything I have seen before.
Below, you will find 30 strong reasons why you should consider Egypt as your next investment destination.
Investors will find many market opportunities in Egypt, as well as untapped growth potential
1) Vast market, thanks to a large (100 million) and young (average age 25) population, which is expected to reach 160 million by 2050.
2) One of the most diversified emerging economies, making Egypt resilient to crisis and economic cycles.
4) The eighth-highest contributor to global growth in 2019 (PPP-based), according to Bloomberg, thanks to multiple growth engines.
Infrastructure is ready to support business growth
5) Ranked 28th worldwide for road quality, thanks to the huge investments undertaken by the government (Egypt was ranked 115th as recently as five years ago).
6) Cheap, abundant, and diversified energy sources (gas, solar, hydro, wind, and nuclear).
• Excess capacity of 15 gigawatts -after a deficit in 2013- exported t oneighbouring countries.
• Regional center for gas transformation and export to Europe, thanks to large reserves and established processing facilities.
• One of the largest solar parks in the world, Benban, covering 37.2 km2 and visible from space, producing 4 TWh of electricity per year.
7) Determination to boost green energy production and use.
• Renewable energy target at 60% by 2035
• National program to replace gasoline by LNG and to rely in the near future on locally produced electric vehicles.
8) Tripling of Internet speed in just 12 months and still accelerating.
9) 887 new laws passed, and 294 international treaties ratified in the last five years to attract foreign investors and increase the efficiency of government services.
• new investment law.
• digitization of customs.
• digitization of tax collection.
• many more initiatives expected particularly in the new administrative capital.
10) Already signed trade treaties giving free access to 2.6 billion people including 47 European countries, and 19 Eastern and southern African countries (Comesa).
The geographical location of Egypt has always been an unmatched advantage throughout human history.
11) Proximity to many European markets, gateway to Africa, regional hub for the Middle East (confirmed by Amazon’s recent decision to set-up in Egypt its regional manufacturing hub ).
12) What can we say about the Suez Canal, through which 10% of the world’s traffic moves?
13) Spared from most natural catastrophes such as hurricanes, volcanos, cyclones, and tsunamis.
The 100 million population offers an immense pool of talent
15) 125 general universities by 2030 teaching disciplines most in demand, such as robotics, artificial intelligence, health-tech, IoT, an increase from the current 72 universities.
16) Ranked 56th out of 172 countries in Government AI Readiness Index, jumping 63 places in a single year.
17) Wide use of European languages, particularly English, making Egypt a hub for international call centers (e.g. Vodafone).
18) Cheap labor, thanks to the low cost of living: average monthly salaries are $150 for workers and $400 for engineers.
Egypt offers a rich and mature business environment
20) 38 commercial banks, 39 insurance companies, many investment banks, numerous law firms, specialized local and international management consulting companies, multiple chambers of commerce for specific sectors or bilateral cooperation with foreign countries, several governmental bodies providing reliable data about the Egyptian market (CAPMAS, ECES), rich choice of office space, free zones benefitting from exemptions from customs taxes, sales tax, and many other fees.
21) A sound banking system considered the most efficient worldwide (cost-to-income ratio less than 30%).
22) Egypt hosts 138 foreign embassies, higher than the 121 embassies in the UAE and the 112 embassies in the Kingdom of Saudi Arabia.
23) Price purchasing parity (PPP) of 4.33 according to the world bank , making Egypt four times cheaper than the US (and even cheaper compared to many European countries).
24) Ranked the eighth-safest country in the world, according to a Gallup Global Law and Order report, ahead of all European countries except Norway and Switzerland.
Egypt is beating all macroeconomic targets
25) Strong long-term growth prospects averaging between 6% and 8%; one of only 18 countries (and the only country in the MENA region) expected to have positive economic growth in 2020 (+ 3.5%), according to the IMF; same positive outlook for the European bank for reconstruction and development, making Egypt the only economy across all of the EBRD regions likely to escape recession in 2020.
27) Stable currency: one of the few emerging currencies to appreciate against the dollar in 2020 (+ 2.1% YTD on October 31st).
28) Political stability proven by the smooth democratic process to elect the representatives of both parliament chambers in 2020.
29) Shrinking trade deficit, increasing remittances (+ 7.8% year on year after seven months of 2020), rebound of Egypt’s reserve of foreign currencies to reach USD 38 billion, covering eight months of imports.
30) Second-highest real interest rate in the world, despite recent rate cuts, making Egypt the new darling of emerging markets, foreign investors’ holdings of government T-bills reached $21 billion in mid-October, up from $10.4 billion by the end of May 2020, only country in the Middle East and Africa to maintain its credit rating with a stable outlook at the big three rating agencies, despite Covid-19 challenges.
On top of all these rational reasons, Egypt offers a magnificent climate, splendid sandy beaches, rich coral seas, mind-blowing historical monuments, and a most vibrant social life. All these additional aspects offer a superb quality of life for foreign expats.
Last but not least, Egyptians are genuinely one of the warmest and most friendly people on earth, bonding easily and appreciating long-lasting relationships.
So, what are you waiting for? Come to Egypt and we will help you explore investment opportunities!
Author: Nadim Samna, Managing Partner at Stratexis
Platform Capital invests in USA-based innovative peer-to-peer financing platform SoLo Funds
Platform Capital Chairman, Dr. Akintoye Akindele and Rodney Williams, Co-Founder of SoLo Funds Inc. (Image & Press Release: Platform Capital)
Platform Capital (“Platform”), a leading growth markets investor, is pleased to announce its investment in and partnership with SoLo Funds Inc. (“SoLo”), an innovative and proprietary peer-to-peer financing platform based in USA that has revolutionised the access to and supply of short-term funds for individuals, entrepreneurs, and businesses.
Twenty-five percent of Americans are unbanked or underbanked, whilst 80% of American workers live paycheck to paycheck, and don’t have adequate savings to cover unforeseen expenses. In addition, implicit and explicit biases mean that women and people of colour are three times more likely to see their credit applications rejected. As a result, they are left with no other options, and fall prey to payday lenders, where a small loan can accrue over 400% APR, trapping them in a cycle of debt.
SoLo replaces payday lenders with a community-based, market-driven model for access to short-term funds for individuals. Through its community, individuals are able to access funds ranging from $50 to $1,000 for up to 2 weeks, that are delivered within hours through a simple and non-approval sign-up process powered by artificial intelligence and machine learning. The platform connects users directly and determines a SoLo score based on ability to repay, spending habits, payment frequency, behavioural data, and location-based data. There are no fees or compounding interest paid to SoLo or the member of the community providing the funds, avoiding the debt trap that is common in traditional short-term lending.
Since launch in 2018, the SoLo community has grown to over 300,000 users. The company has seen significant adoption of its model in states with large populations and high cost of living. Over the past 12 months, SoLo’s community has experienced more than 2,000% growth, introduced a new product feature “lender protection service” that safeguards the financed amount in case of a default, and has partnered with Kiva to enable access to funds for entrepreneurs and business owners ranging from $1,000 to $15,000.
SoLo Funds mission is to replace payday lenders with a community-based, market-driven model for individuals, entrepreneurs, and businesses to access financing. The company has raised $10 million lead by international investors including ACME Capital, Impact America Fund, Techstars, Endeavor Catalyst, and CEAS Investments to further develop its technology, scale its team, and expand across the USA.
Dr. Akintoye Akindele, Chairman of Platform Capital, joins the Board as an observer & adviser.
Rodney Williams, Co-Founder of SoLo Funds Inc., said “We’re excited about our partnership with Platform Capital, we look forward to expanding our services into Africa. This partnership enables us to achieve our vision of being the number one access to funds provider for people and businesses in need. We believe that our platform will certainly impact and change conversation in Africa around how businesses and individuals can access funds.”
Dr. Akintoye Akindele, Chairman of Platform Capital, said: “We are proud to partner with SoLo Funds. Access to funds is a problem that affects millions of people globally. We believe that SoLo’s alternative approach to laccessing funds will impact millions of lives and position them as an innovative disruptor in the funding space. We look forward to working with SoLo Funds to scale their innovative solutions to positively impact people’s lives.”
Paymob completes Series A funding of $18.5 million to fuel regional expansion
Paymob Press Release/Founders Photo (Source: Paymob)
Paymob, Egypt’s market-leading digital payments provider, announces the largest ever Series A fund raise by an Egyptian company and one of the largest fintech equity rounds in North Africa. The Company has raised US$15 million of new capital from existing investors in a second tranche of its Series A fundraising activity. It follows a first tranche of US$3.5 million, raised in July 2020.
The capital raise was led by Global Ventures, the UAE-based venture capital firm. It also included A15, a leading tech investment fund and FMO, the Dutch entrepreneurial development bank. Paymob will use proceeds to: Continue expanding its merchant network, Meet the increasing demand, Enhance its suite of products further and Fuel its regional expansion efforts.
Paymob empowers underserved SMEs with improved and more accessible digital payments offerings as part of the Central Bank of Egypt’s efforts and initiatives towards nationwide digital financial inclusion. The Company will accelerate its expansion in Saudi Arabia and other markets across the region, in 2021.
Paymob’s mobile wallets infrastructure processes over 85% market share of transactions throughput in the Egyptian market and serves merchants across five different markets including Kenya, Pakistan, and Palestine. Paymob is the largest payment facilitator in Egypt and is the only Egyptian FinTech to expand beyond its local market.
In payment acceptance, Paymob’s monthly revenue grew over 5x in 2020 and its technology is used across economic sectors by over 35,000 local Egyptian and global merchants, such as Swvl, ElGouna, Tradeline, LG, Samsonite, Aeropostale, Befit, Breadfast, Gourmet, and the American University of Cairo. Paymob’s annual Total Payment Volume processed is now over $5 billion.
“We couldn’t be more excited for Paymob’s next phase of growth; the market opportunity in the region is unprecedented. The large digital payments gap still exists and we are delighted to be working with progressive-thinking regulators to address this. This latest capital raise will accelerate our progress to reducing the digital payments bottleneck. All our existing investors have increased their holdings, and we thank them both for their support and the confidence they have in our business model and track record of execution.” – said Paymob’s CEO and co-founder, Islam Shawky.
“We are delighted to lead this momentous FinTech fund raise in the region. Paymob has a perfect combination of a high-quality technology, a product customers increasingly cannot do without and an outstanding management team. Their market opportunity is also huge; Egypt’s transformation to a cashless society is being enabled by the unique products Paymob has built. We look forward to continue supporting their expansion.” – said Basil Moftah, Global Ventures’ General Partner.
“As one of Paymob’s earliest backers, we are always proud to support a young and passionate team revolutionizing the development and advancement of financial systems in Egypt, our region and beyond. Paymob’s team has shown great returns with very limited resources. Witnessing the impact of facilitating financial services to millions of end-consumers and tens of thousands of merchants coupled with hypergrowth has been a very fulfilling experience for A15.” – said Karim Beshara, A15’s Chairman.
“Paymob is an excellent fit with FMO’s Ventures Program based on its exceptional team, innovative payment solutions and proven capability to include thousands of underserved Egyptian merchants into financial services offered by the company and its partners. We are proud to be part of the journey of Paymob in Egypt and excited to support the team throughout their next phase. The FMO Ventures Program is a EUR 200mln investment program funded by FMO, the Ministry of Foreign Affairs and the European Commission targeting early-stage technology-enabled innovative business models in emerging markets.” – said: Jaap Reinking, Director Private Equity at FMO.
Sawari Ventures closes $71 million fund to invest in Egyptian-led startups
Press Release/Image Source: Sawari Ventures
Sawari Ventures announced the closing of the Egypt-based fund with total commitments of USD 30 Million from Misr Insurance Group, Ekuity, National Bank of Egypt, Banque Misr, Banque du Caire, and Suez Canal Bank. The fund previously closed USD 41 million of raised investments from European Investment Bank, CDC , Proparco, DGGF which is managed by the South African fund Sango Capital, increasing the total fund size to over USD 71 Million to invest in Egyptian technology and knowledge driven companies.
Founder and Chairman of Sawari Ventures, Ahmed El Alfi said in a statement, “The Egypt based fund is a privately-held fund regulated by the Financial Regulatory Authority of Egypt (FRA), which allowed us to attract capital from top tier local financial institutions to co-invest with foreign capital from international development financial institutions, doubling our allocation to invest in Egyptian high growth companies to sixty-eight million U.S. Dollars. Our aim is to create exceptional returns through investing in knowledge driven companies, which have the potential of bringing transformational changes to the Egyptian economy. The fund will support local companies with dedicated capital, in addition to quality expertise from our seasoned and specialized team, and the value add of our investors.”
Sawari Ventures is the leading venture capital firm based in Egypt that is driven by passion for fostering innovation and entrepreneurship. Led by Ahmed Al-Alfi, Hany Al-Sonbay and Wael Amin, Sawari Ventures has invested in more than 30 companies, backing multiple successful technology companies such as SWVL , Instabug, and Si-Ware.
During the announcement, Basil Heni, Chairman and Managing Director of Misr Insurance Holding Company said, “Misr Insurance Holding Group, as the largest non-bank financial group in Egypt, was keen on this strategic partnership with Sawari Ventures, the leading company in managing capital funds. The partnership is directed towards emerging small and medium-sized enterprises, which is in accordance with the group’s role in supporting this vital sector in the economy. This is evident in the fact that we own the largest share in the fund.”
“Banque Misr was the first to commit to Sawari Ventures and this move is part of our strategy to support financial inclusion and digitize our banking operations, and is in keeping with our roots as an entrepreneurial bank,” said Akef El Maghraby, Vice Chairman of Banque Misr.
“The National Bank of Egypt has always believed that Egyptian Small and Medium Enterprises are the growth engine of the Egyptian economy. We are very aligned with Sawari Ventures in our vision which is why we are the largest banking investor in the fund” said Ahmed ElSaeed, CEO of Investments at the National Bank of Egypt.
“Our alliance with Sawari Ventures further strengthens the resurgence of the Kuwaiti investments in Egypt, partnering with a selective group of Egyptian institutions and investment funds, with the aim of contributing to the creation of scalable businesses as well as achieving the targeted investment returns,” said Adnan Al Sager, the CEO at Ekuity Holding, the Investment arm in Egypt of the Kuwait Investment Authority (“The Kuwait sovereign wealth fund”).
“Our partnership with Sawari Ventures is aligned with our strategy to expand our investment portfolio especially in the digital economy and SME segments.”, said Mohamed Regai, Chief Innovation Officer at Banque du Caire, “We are committed to further increase our exposure given the attractiveness and impact of these sectors.”
El-Haythem ElKobrosly, Head of Commercial, at Suez Canal Bank closed with “We obtained our approval in record time based upon the track record and experience of the Sawari Ventures team. We believe it is the beginning of a partnership that will allow our bank to further engage in the digital economy through additional co-investments and lending.”