These days in Egypt, it seems like everybody and their mama is an entrepreneur and starting a business is a trend. Over the last couple of years, the country has witnessed an explosion of new startups, from apps that aim to tackle literacy to services that aim to curb Cairo’s notorious traffic problem. And along with this boom of new businesses, vehicles of support have been developed, from startup accelerators and incubators to formal angel investment groups. A new, highly buzzed about tech park has also opened at the AUC Greek Campus that aims to be the Silicon Valley of the Middle East.
But in the last couple of years, we’ve also seen massive political instability, a severe economic downturn, the departure of multinational companies and lack of regulation and rule of law. Not to mention, Cairo is competing with the already developed entrepreneurship ecosystems and investment pull of other (more politically stable) cities in the region. So we wondered, is Egypt’s dynamic startup scene just a bubble that will inevitably pop, or is this just the beginning of a new tech-centered era of sustainable entrepreneurship?
We asked a few of the top investors in Egypt and the region for their opinion.
Hala Fadel, Chair of the MIT Enterprise Forum Pan-Arab Region, Fund Manager and Angel Investor
Definitely, it’s the beginning. I don’t think it’s a bubble at all, it’s the beginning, it’s gonna take time to produce results and for this energy that we see today to materialize into great companies, but it’s not a bubble, it’s a beginning of something that should have happened many years ago, empowering the youth to start businesses and create jobs in this region.
Why do you think it’s happening now?
That’s a very good question and there are a number of things that made it happen now. One, the environment in general for entrepreneurship around the world with technology and Internet readily available, has broken the barriers to entry into the entrepreneurship world. You can start a business form wherever you are, you can be innovative and creative from wherever you are.
Second, there has been a lot of work done on the ground by a number of NGOs and partners in the ecosystem to raise awareness about entrepreneurship in the region, so I think people are more aware of it.
Third, these young graduates that graduate from around the region have difficulties finding jobs and they’re technology savvy, so it’s like a natural path for them.
And I’d say finally, the culture of entrepreneurship is somehow accepted now by the mentalities of the Arab region, by the families… so people encourage you to be an entrepreneur. It has become a status, really.
And maybe last but not least, the funding is now available, so it’s an enabler for all this energy that is available in the region.
Hany Sonbaty, Co-Founder of Sawari Ventures and Flat6Labs and Venture Capitalist
No, not at all… You’ve seen that it’s an explosion in the last couple of years only because the media has taken an interest in the last couple of years and wanting to link some sort of narrative to the revolution. But I’ve been part of this movement that’s been steadily growing through ebbs and flows for more than 15 years now… It’s been something that’s been brewing quite nicely for more than a decade…
Jordan might have the higher profile entrepreneurs because of Maktoob… and because the King takes an active interest. UAE, obviously Dubai, has a certain appeal to attracting certain foreign entrepreneurs. But honestly, this is nothing.
This is a movement, as I said, that’s been a decade going and we’re building momentum and Egypt will be unstoppable. The whole thing, technology entrepreneurship, entrepreneurship in general, the whole thing will start and end with here. It will be an unstoppable movement.
This will be the center, everything else will be the periphery – just sheer numbers, sheer weight, sheer talent, sheer opportunity, everything. And we’re getting our act together and we’re doing it the organic way and that’s the beautiful thing. It’s not some top down approach, you know, not some dictate from government or policy… And our movement is gonna be overwhelming.
It’s inevitable. And anybody who comes here sees it. You couldn’t do this anywhere else in the Arab world. And this is the tip of the iceberg.
Con O’Donnell, Serial Entrepreneur and Angel Investor
We do need a little bit of a bubble, in a good way. People need to get hype around this in order for it to get traction. After that, whether it’s real or not real becomes apparent – if people can sell things, if they can make businesses out of it.
Being an entrepreneur doesn’t mean anything unless you can scale a business, unless you can innovate, disrupt. So the proof of that is not there yet. But in order for it to get there, people have to at least give these kids a chance, to say, ‘I’m gonna do business with a company’ or ‘I’m gonna talk to them’ or ‘I’m gonna help them’, whatever.
But I’ve seen some great potential companies coming out of this space in the last two years that would never have existed prior, because we have something called an ecosystem now.
And once that gains momentum and projects like this – this big real estate project around entrepreneurship takes off, you will have another momentum and who knows? Facebook can re-locate their headquarters from out of Israel and put them in Egypt if we have the talent and we have the ecosystem and we have all these positives.
If only we could have the least bit of stability on the political scene. We could sit in here and pretend it’s not happening outside as well, that’s the thing.
WE SAID THIS: Check out our coverage of the RiseUp Egypt Summit.