Egyptian start-up ecosystem benefits from public and private funding

Text size +-

Egypt has an established and dynamic start-up ecosystem, with company founders working across verticals to create innovative digital solutions. The country is home to the fourth-largest ecosystem of start-ups in Africa, with 562 active tech start-ups, according to a 2021 report from Disrupt Africa. Nearly 94% of startups are based in Cairo, with Alexandria accounting for 3.6% and the remainder in cities such as Assuit, Qena and Mansoura. Even as the Covid-19 pandemic slowed start-up launches, it made consumers and businesses more willing to adopt digital solutions – a trend that has created more opportunities for businesses in the space.

Opportunities & Challenges

While the segment has been dominated by e-commerce in recent years, those operating outside that space are finding more opportunities for expansion. This is especially the case for financial technology (fintech) such as digital banking and lending, e-health, education technology and talent acquisition. “Every start-up is thinking about leveraging fintech to advance its offering and become more competitive by providing faster and more convenient payment and financing options,” Fatma El Shenawy, co-founder and chief strategy officer of fintech start-up Khazna, told OBG. “Egypt has a large underbanked population, and insurance penetration remains low. The increasing number of start-ups is a positive sign and a testament to regulatory efforts aimed at advancing financial inclusion. There is significant opportunities for start-ups in fintech and insurance technology to provide convenient, customer-centric products,” she added.

Even as challenges remain, such as limited access to human capital and low talent retention due to competition from higher-paying companies abroad, the market has become more attractive to top tech talent, who are increasingly choosing to remain in Egypt. “The rapid rise in mobile internet penetration and consumers’ willingness to adopt digital solutions has been a game-changer,” El Shenawy told OBG. “These factors have encouraged talent to shift away from more stable careers to start-ups that are aimed at disrupting industries or addressing unmet needs.”


Over 12,900 people are employed by Egyptian tech start-ups, the majority of which employ 50 or fewer individuals. The ecosystem has been active for over a decade, with the number of launches rising from 116 in 2018 to peak at 131 in 2019. As it did in other markets, the pandemic slowed start-up activity in Egypt, with 88 start-ups launched in 2020.

The largest segment of start-ups is e-commerce and retail tech, accounting for 20.8% of active tech start-ups, followed by fintech (11.6%) and e-health (9.4%). Business to business; clothes and accessories; and food, drinks and groceries are the largest e-commerce segments, comprising nearly 50% of the market. Fintech was dominated by payment and remittance platforms, which account for 40% of start-ups in operation, followed by lending and finance (23.1%), and business administration (9.2%). The largest segment for e-health was bookings (24.5%), followed by practice management and procurement (20.8%), and health information and virtual health care (15.1%).

Egypt’s supportive ecosystem has helped to nurture a series of successful start-ups. In addition to Khazna, Egypt is home to Swvl, a mobility start-up that went public in March 2022 and is listed on the Nasdaq exchange; e-payments platform Fawry, which manages nearly 3.1m financial transactions a day; Instabug, designed to help developers monitor and debug mobile apps; and business-to-business shipping platform Trella.

Social Programme

As in markets around the world, women are underrepresented in the Egyptian start-up scene. According to Disrupt Africa, as of 2021 approximately 12.5% of Egyptian start-ups had at least one female founder, a rate below other established ecosystems on the continent. The government is working to address the gap, including through a Ministry of Communications and Information Technology (MCIT) programme that provides female entrepreneurs with early-stage support. In 2021 around 300 women participated in the Women Entrepreneurship Programme, a 60% increase from the previous three rounds of the initiative. The programme provided support to approximately 500 women between 2018 and 2020. The government is also looking to attract youth to ICT and start-ups through the Future Work is Digital initiative, an upskilling scholarship. Launched in May 2020, the first round trained 80,000 youth at a cost of $13m.

Financial Support

Even as the pandemic slowed the launch of new ventures in Egypt, the segment continued to grow, with investment rising by 30% in 2020. This trend continued into 2021, supported by the launch of several new venture capital (VC) funds. In April 2021 local VC Algebra Ventures launched its second fund for start-ups in fintech, logistics, e-health and agri-tech. If the firm’s $90m target is met, it would bring its total raised to $144m, making it the largest local VC in North Africa. In mid-April 2022 the firm secured $15m from the International Finance Cooperation, which will support the development of 20 tech start-ups.

Also in April 2021, Egypt-based Sawari Ventures closed a $71m fund – first announced in 2018 – for start-ups in Egypt, Morocco and Tunisia. In November 2021 US-based VC Openner and ICT services provider Benya Group signed an agreement to launch a $50m VC to support investment in Egypt and other Middle Eastern and African markets.

Egypt is also home to one of Africa’s most active angel investor networks, Cairo Angels, second only to Lagos Angel Network on the continent. Start-ups typically receive between LE250,000 ($15,900) and LE2m ($127,000) in funding from Cairo Angels, with investors attaining a minority equity stake in the start-up. In a sign of the market’s growing maturity, in December 2021 Cairo Angels announced the first close of its microfinance Cairo Angel Syndicate Fund, which seeks to raise $5m for start-ups in the Middle East and Africa. Between its establishment in 2012 and February 2022 Cairo Angels had invested a total of $2.8m in 28 startups across six cities. Beneficiaries include crowdfunding platform Zoomaal, app manager Instabug, personal concierge app Elves and virtual event portal Eventtus.

In addition to VCs and angel investors, start-ups in Egypt have a network of 200 centres and co-working spaces, and 37 accelerators and incubators, according to the Disrupt Africa report. “Accelerators and incubators are playing a major role in the ecosystem, as they allow for the democratisation of knowledge and access to capital,” Nour Ahmadein, former head of business development and marketing at Uber Egypt, told OBG. “Local accelerators are vital to boosting confidence and know-how among founders, especially those who are less exposed and educated, and thus may be less likely to attract international financing. An accessibility gap remains, however. Much of the start-up system is centred around Cairo, with still too few accelerators having offices outside the capital and Alexandria,” he added.


The start-up segment also benefits from support from the government. In 2019 the Central Bank of Egypt (CBE) launched a fintech regulatory sandbox, giving start-ups a structured and controlled environment to develop innovative solutions. It will also help the CBE create regulations that target the needs of the segment; facilitate collaboration among the CBE, fintech operators and traditional financial institutions; and strengthen consumer protections.

In September 2021 the Information Technology Industry Development Agency signed an agreement with Plug and Play, a global firm that focuses on nurturing and upscaling start-ups, to launch acceleration and incubation programmes aimed at entities involved in fintech, insurtech, energy, the internet of things, mobility, health care and sustainability. The agreement is part of efforts to establish a wider strategic partnership with global players to further develop the ecosystem.

Also in 2021, the MCIT launched CREATIVA learning and innovation centres in Mansoura, Menoufia, Minya, Sohag, Qena and Aswan to provide youth with the technology skills needed in the future job market. As of mid-2022 there were eight innovation centres across the country, with 14 more in the pipeline.


There has been a marked increase in the funding start-ups have received in recent years. Egyptian tech start-ups raised over $791m between 2015 and 2021, with the number of funded enterprises increasing from 10 to 114 over the same period. The amount raised annually rose in kind, from $8.6m to $156.2m, and the trend is set to continue: in the first three quarters of 2021 start-ups secured $403.6m.

Egypt ranked among the top countries in Africa in terms of the amount of funding and the number of recipients in recent years, behind only Nigeria, Kenya and South Africa. The amount raised outpaced the number of funded entities, reflective of the larger rounds of funding. In 2015 the highest amount raised in a single funding round was $2.7m for shopping search engine Yaoota, while in 2020, $40m was raised for e-health platform Vezeeta and in August 2021 microfinance provider MNT-Halan secured $120m.

You have reached the limit of premium articles you can view for free. 

Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.

If you have already purchased this Report or have a website subscription, please login to continue.

Previous article from this chapter and report
Adel Hamid, CEO, Telecom Egypt: Interview
Next article from this chapter and report
How the Covid-19 pandemic accelerated digital transformation
Cover of The Report: Egypt 2022

The Report

This article is from the ICT & Innovation chapter of The Report: Egypt 2022. Explore other chapters from this report.

Covid-19 Economic Impact Assessments

Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.

Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.

Register Here×

Product successfully added to shopping cart