Some countries have oil, and others have gold. Egypt has people. Specifically, an army of young, ambitious and tech-savvy men and women concentrated in major cities. Testament to this is Cairo’s recent profile in Virgin Magazine as one of the “world’s best startup hubs.”
After months of rigorous research and interviews with the founders of Cairo’s most innovative tech companies, the Cairo Tech Map is finally here! Drawing its inspiration from the NYC Tech Map, the data collected demonstrates the “multiplier effect” on how each company has influenced others within the entrepreneurial ecosystem here in the capital.
To date, Endeavor Egypt has supported 9 influential tech companies based in Cairo, including Khaled Ismail’s SysDSoft and Amr Shady’s TA Telecom. Both these entrepreneur’s are now key fixtures in the Endeavor global network. These companies are some of the most important influencers in the tech ecosystem alongside ITWorx , the brainchild of Wael Amin and Youssri Helmy – both of whom serve as loyal Endeavor mentors.
Between them, Endeavor Egypt’s tech companies and their entrepreneurs have supported 48 new companies in Egypt. Over 40% of the support granted to these new ventures came in the form of mentorship – once again highlighting the importance of a strong and reliable network of fellow entrepreneurs willing to reinvest their knowledge and expertise.
One of the most exciting conclusions we’ve drawn is that Cairo’s young but burgeoning tech sector is growing at around 30% on average each year – roughly the same growth as New York’s much larger and older hub. Cairo-based entrepreneurs provide double the amount of mentorship that NYC companies do. When it comes to financing, investment activity accounts for 15% of the total number of connections between Endeavor companies and the other entrepreneurs and ventures they have influenced. In contrast, investment-driven connections grew by 42% in 2014 in NYC.
Although all the indicators showcase this city’s tremendous potential, there is still much work to be done. Here is what we’ve learnt from our research so far:
1. We need to start putting our money where our mouths are
To support Cairo’s tech sector, we need to start believing in its potential and increase investment. Around 10% of tech firms in the capital have received VC funding in comparison to over 50% of NYC-based companies. Tech start ups in Egypt are also far more unlikely than their NYC counterparts to invest in each other.
The good news is that more VC firms and incubator programs are slowly but surely beginning to emerge such as Sawari Ventures, the Social Fund for Development, Ideavelopers and Tamkeen Capital (including their new USD $10 million ‘Endure Capital’ fund). Once we can invest in ourselves and in our own talent, others will want to as well!
2. It’s time to start harnessing our talent
Half of the tech firms surveyed for the Tech Map cited the ‘lack of talent’ as a challenge for their businesses and the ecosystem at large. Talk to any entrepreneur and they will highlight the difficulties of putting together a high-caliber, competent team.
We also need to begin addressing “brain drain” – a phenomenon that has increased since 2011. According to the International Labor Organisation, Egypt is the 12th largest source of emigrants globally. More than half of these émigrés have a tertiary education and 33% were “professionals, managers or senior officials.” Businesses and universities need to begin synchronizing and networking on a much deeper and broader scale to ensure that we harness and support our local talent. Once people begin to understand that they can create their own opportunities here in Egypt, talented entrepreneurs can begin to flourish. Almost half of the Cairo-based entrepreneurs mapped were between 21 and 26 years old.
3. Corporate Jobs, Age and Entrepreneurship
Nearly 30% of the 236 tech entrepreneurs mapped were previously employed at one of Cairo’s established tech firms. Furthermore, Cairo’s three most influential tech companies (SysDSoft, ITWorx and LinkDotNet) have directly impacted almost half the companies mapped. This is proof of the value and skills that corporate training and development can instill in employees and prospective entrepreneurs. After all – practically every corporation around today started small while thinking big.
Try conjuring up an image of an entrepreneur in Silicon Valley and the thing most likely to appear is a hoodie-wearing, bleeding heart, twenty-something year old. Although the largest cohort of tech entrepreneurs in Cairo is aged 21 to 32, the beauty of entrepreneurship is that it can happen at any age and at any time. As George Deeb of Red Rocket Ventures notes, experience is a far better indicator of success than age. Young and successful entrepreneurs are almost always those whom have managed to offset their lack of experience by surrounding themselves with a network of seasoned mentors.
4. Tech companies create high-value jobs
The local tech ecosystem (excluding multinationals) employs approximately 5,000 people. This number is expected to grow by a third annually, meaning that by 2020, there will be more than 20,000 people employed in the tech startup sector alone. Factor in a few success stories and the expansion of tech entrepreneurship to other parts of the country and the possibilities are endless!
5. Getting personal matters
As the very talented serial entrepreneur Aurore Belfrage noted at the YME Cairo Startup Roadshow, “an angel investor is a mother, a father, a door opener, a shoulder to cry on and finally, a bank.” Investors and entrepreneurs should have a shared vision and a mutual desire to see the business succeed. Of Course financial returns are key, but successful entrepreneurs find investors who don’t just make sense on paper (and vice-versa), but who will be able to provide strategic support and act as a sounding board for the entrepreneur.Share this Post: