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HomeAfricaEgyptian startups get major boost as Sawari Ventures launches $150 million fund

Egyptian startups get major boost as Sawari Ventures launches $150 million fund

Sawari Ventures, a prominent investment firm, is set to launch a new fund with a $150 million investment goal dedicated to supporting Egyptian startups. Hani Al Sanbati, the CEO and co-founder, outlined the company’s focus on diverse sectors such as fintech, education, healthcare, green technology, and deep tech projects, anticipating robust growth in these domains within Egypt.

In an official statement, Al Sanbati expressed confidence in the current economic climate, asserting that prevailing conditions are conducive to continued investments in technology companies. He emphasized that initial challenges faced by startups are not expected to hamper their overall growth trajectory.

Projections indicate that Egyptian startups backed by Sawari Ventures could attract substantial investments ranging between $350 million and $500 million over the next five years. Al Sanbati underlined the company’s broader vision for Egypt to become a pivotal investment hub in both Africa and the wider region, citing Sawari’s track record of investing in around 500 startups since its establishment in the Arab world.

He elucidated Sawari Ventures’ operational framework, designed to catalyze investments and position companies for future funding opportunities, underscoring the company’s commitment to fostering innovation and entrepreneurship in the region.

Egyptian startups get major boost as Sawari Ventures launches $150 million fund

Al Sanbati indicated, “Exiting forms an integral part of our company’s strategy to inject investments into other ventures,” noting ongoing discussions regarding the potential exit from certain companies within a year and a half, provided these firms sustain growth with new investors.

Sawari Ventures’ influential role in reshaping Egyptian startups

Around 35 per cent of Sawari Ventures’ investment portfolio is dedicated to the fintech sector, aiming to modernize the Egyptian economy and transform trends in financial inclusivity.

Founded in Egypt in 2010, Sawari Ventures has become a prominent venture capital firm in the country, supporting more than 30 companies, including Swvl, MoneyFellows, Instabug, Si-Ware, and Elves.

Read More: Egyptian customer loyalty fintech Zeal raises $4m funding to expand its technology

Egypt shows signs of promise as African startups face funding chill in 2024

In January 2024, African startups experienced a substantial decline in funding compared to the same period last year, registering an 84.8 per cent year-on-year drop from $545.1 million to $83 million, according to data from Africa: The Big Deal. However, when excluding a single large acquisition in 2023, the decrease is less severe at 16.2 per cent, indicating a relatively stable underlying growth in the African tech ecosystem amid the global funding slowdown.

Key sectors attracting the most investment in January 2024 included agritech ($26.3 million), cleantech ($18.1 million), and health tech ($13.5 million). Notably, fintech and other sectors experienced a funding decline, aligning with the global trend of investors favouring established startups with proven track records during uncertain economic times.

Intriguingly, three out of the four logistics startups securing funds in January—Bosta, FriendlyM, and Roboost—originated from North Africa, particularly Egypt. This trend coincides with the success of Egyptian mobility startup Swvl, which achieved profitability in 2023 after years of losses, indicating potential increased investor interest in Egypt’s logistics sector in the coming year.

Egyptian startups get major boost as Sawari Ventures launches $150 million fund

Despite the funding slowdown, January 2024 witnessed both new and established investors reaffirming their commitment to the African tech ecosystem. The European Investment Bank (EIB) invested $30 million in Seedstars, focusing on francophone Africa, while the African Development Bank (AfDB) contributed an additional $10.5 million.

Noteworthy figures like Iyin Aboyeji and Mia von Koschitzky-Kimani launched Accelerate Africa, a Nigerian accelerator supporting early-stage startups. Egypt also welcomed the establishment of T-vencubator, a hybrid VC firm and incubator aiming to invest in promising Egyptian startups, presenting a unique model that could provide valuable support for early-stage startups in the country.

Read More: Egyptian AI startup DXwand secures $4 million in series A funding to drive expansion