Who gets funded in Egypt?

The Ideal Profile of an Egyptian Founder

Table Of Content

0. Introduction & TLDR

1. Company Information

   1. When Companies started

   2. Sectors of these companies

   3. Number of co-founders

2. Founder’s education

   1. What did they study?

   2. Where did they study?

   3. Post-graduate degrees & MBAs

3. Work Experience

   1. Years of Experience

   2. Field of Experience

   3. Job Titles & Positions

   4. Top Employers

4. The Most Outstanding Founder

5. What does this data say about Egypt’s entrepreneurship scene?

   1. Entrepreneurship is not an equalizer of wealth

   2. Our public education generates specialists not leaders

   3. We, Egyptians, are truly conformist people

   4. Final Question

#0 Introduction

I was wondering, who are the founders that get funded in Egypt? What's the ideal Egyptian founder profile for a VC firm?

Every VC firm says they invest in “exceptional” founders. What does exceptional mean?

Are they young brilliant engineers/hackers? Are they seasoned business executives with strong industry expertise?

So, I analyzed 80 Egyptian-founded venture-backed companies that had at least one million dollars in total funding. The list includes the most funded startups in Egypt such as MNT-Halan, Swvl, Vezeeta, MaxAB, Paymob. It also includes newly established companies such as Freshsource, Swypex, & Bokra. You can access the list of companies here

Here’s the ideal founder profile & the TLDR of this article

1. You're a 28-35 year old male

2. You either studied abroad or at the AUC. It wouldn’t hurt if you have an MBA or graduate degree from Europe or the US.

3. You studied engineering but decided to work in commercial careers (business development, business operations, etc.)

4. You have at least one brand name in your resume; Vodafone, Uber, Mckinsey, P&G, etc.

5. You climbed up the ladder quickly, becoming a senior manager, director or general manager at a fairly young age.

6. It would be great if you complimented this multinational corporate experience with a startup experience at a more senior position.

7. After 10 years of work experience, you finally decide to build your startup.

#1 Company Information

#1.1 When were these companies founded?

It’s not a surprise that 65% of the most funded startups in Egypt were founded between 2018 and 2021 at the peak of cheap money. Companies founded in 2018 were the ones who raised the highest money, close to 260 million dollars. These companies were started in relatively stable eras and had enough traction to raise higher amounts during the zero interest rate era.

Companies founded in 2020 and 2023 had it rough as the economic situation in Egypt worsened, US interest rates increased and the VC market dried up in 2022. It’s also very likely that these companies didn’t have enough time to raise bigger amounts.

*Note: I removed the funding amounts of MNT-Halan & SWVl to prevent skewness. As both companies raised over 900 million dollars in aggregate. Both companies were founded in 2017.

#1.2 What sectors are these companies?

The most funded sector is fintech, representing 31% of the sample data.

Fintech has got a lot of attraction in 2017-2021 for several reasons;

1. It was part of a global trend. Fintech was booming everywhere else (Revoult, Nubank, Klarna)

2. The government push for financial inclusion programs

3. The financial infrastructure needed to achieve financial inclusion

4. Many of the fintech companies are lenders and they need huge amounts of financing to finance their customers

#1.3 Number of co-founders

• Only 18% of startups have a solo founder. Close to 70% of startups have 2 to 3 co-founders. Only 3% of startups have 5 co-founders.

• 93~94% of founders (CEOs & other co-founders) are males.

So, before starting your venture, it’s better to call a friend or two :”)

#2 Founder’s Education

#2.1 What did they study

62% of Egyptian founders studied engineering. Electrical engineering, not computer science, was the most popular major among founders. Less than 5% of founders studied majors outside the realm of engineering & business.

#2.2 Where did they study?

46% of founder CEOs studied either abroad (Mainly UK, USA & Canada) or at the American University in Cairo. 30% of founders completed their undergraduate degrees at Cairo University or Ain Shams University. Only 10% of founders got their degrees from other public universities.

This might not be that surprising to many. However, if we look at the educational background of CTOs of the same companies. Cairo University is the most popular institution, followed by the German University of Cairo. GUC is widely known for its technical caliber in software. Alexandria University is also prominent.

Note: I can bet that at least two thirds of Egyptian FAANG engineers studied at Cairo university, Alexandria university or German university in Cairo.

#2.3 Graduate Degrees & MBAs

• 19% of founders have masters degrees primarily in engineering or economics.

• 16% have MBAs and 3% have PhDs.

• 60% of these graduate degrees were obtained from abroad; mainly USA & Europe.

#3 Work Experience

#3.1 Years Of Experience

• At the time of starting the company, founders had an average of 10 years of work experience (The median is 9 years and the mode is 8).
  

• Only 4% of founders had zero work experience at the time of starting their own company and only 5% of founders had over 20 years of experience.
  

• Of the most exceptional founders who had zero work experience before building their company are Omar Gabr & Moataz Soliman, founders of Instabug.
  

• One of the most experienced founders is Amr Sultan, founder of Blnk who has 23 years of experience in finance and investment banking!

So, don’t rush building a company, but also don’t wait for too long.

#3.2 Field of Experience

• 33% of founders had entrepreneurial experience and started one or multiple businesses before building their startup.
  

• 24% of founders had general management experience as country managers, business unit heads, or managing directors.
  

• 47% of founders had a commercial background; working in the fields of Business Development, Marketing or Sales.
  

• 25% of founders are ex investment bankers or management consultants.
  

• Only 13% of founders (CEOs) had software engineering background

Note: If you sum up these percentages, it’d be over 100%. Because founders have more than one experience. Founders with consulting & investment banking background also had operating experiences after. Founders with previous entrepreneurial endeavors had other experiences as employees.

#3.4 Job Titles & Positions

Excluding founders with zero work experience, almost all founders had management & leadership experiences before building their startup.

• As mentioned, 33% of founders have started businesses before. The most well known is Mostafa Amin, founder of Breadfast, who previously built several ventures such as Egyptian Streets. One of the most impressive founders is Ayman Essawy, founder of Connect Money, who is a co-founder of Lucky and DSquares.

• Around 30% of founders were leading teams or departments (team lead, manager, sr. manager, head) such as Omar Hagrass, who was an expansion manager at Uber before launching Trella.

• 18% were general managers/managing directors managing a whole organization/country. Ahmad Hammouda, founder of Thndr, was the general manager of Uber Egypt. Belal El Magharbel, founder of MaxAB, was the general manager for Careem Cairo.
  

• 13% were C-level executives, such as Mohamed El-Feky, founder & CEO of Sympl, who used to be the CEO of ValU. Omar El-Dafrawy, founder & CEO of Flextock was the Chief Finance Officer of elmenus.

#3.5 Top Employers

More than 80% of founders had at least one big brand name on their resume either:

1. A big tech company (Microsoft, Amazon, Uber)

2. A multinational FMCG (Pepsico, P&G, Unilever)

3. Top investment bank or consulting firm (Mckinsey, Bain, EFG)

• Vodafone is the most popular employer for CEOs. Momtaz Moussa (Lucky Financial), Mostafa Beltagy (Nawy), Ahmed Mahmoud (DXWand)

• IBM is the most popular employer for CTOs. Ahmed Mohsen (Halan), Ahmed Wageeh (Khazna), Ahmed Dweidar (Khazenly). I don’t know if IBM is really good at hiring and training engineers or if current CTOs didn’t have enough employment options 10-20 years ago.

• Not surprisingly, Uber & Careem saga produced a fairly large portion of founders (20%).

• 15% of founders had worked at other Egyptian startups. Elmenus & Speakol are the most popular employers. Elmenus produced Sylndr, Suplyd, Flextock & Raseedi. Speakol produced Breadfast, Chefaa & ConvertedIn.

#4 The Most Outstanding Founder - Beating the odds!

Doaa Aref - Founder & CEO of Chefaa is the most outstanding founder that caught my attention. Doaa didn’t fit the typical VC “ mold” for founders. However, Chefaa is one of the most successful health-tech companies in Egypt with around 9 million dollars in funding.

1. Only 6% of founders & CEOs are women. Doaa is one of them.

2. Only 10% of founders are graduates of public universities (excluding Cairo & Ain Shams). Doaa is one of them.

3. Only 20% of founders didn’t have a “big brand” stamp on their resume. Doaa is one of them.

4. In addition to that, Doaa was diagnosed with Thyroid Cancer. Not only did she survive it, but she built a company to make the life of every other chronic disease patient easier. What a champ!
   

Doaa is a legitimate proof that Mission-driven founders can truly beat all the odds and achieve the impossible.

#5 What does this data say about Egypt’s entrepreneurship scene?

#5.1 Entrepreneurship is not an equalizer of wealth

• Entrepreneurship was sold to us as the best way to achieve upward mobility. However, it seems that most successful founders come from fairly upper economic classes. They had the best education, which enabled them to work at the top institutions, which enabled them to get solid experiences and build stronger networks. Certain investment banks & multinationals in Egypt reject any public university graduate because they’re not “AUCians”.

  • Several top employers & investors (accelerators, VCs) would reject an applicant because of having a thick English accent, as an indication of socio-economic class.

• It’s also likely that founders who afford to take risk had financial backup whether in the form of inheritance, family support or years of savings from a high-income job. They didn’t worry that much about financial foundations; marriage, rent, food, etc.

• There are exceptions to the rule; many founders struggled financially for years before making it, such as Ameer Sherif (Wuzzuf), Mai Medhat (Eventtus) & Mostafa Amin (Breadfast).
  

#5.2 Our public education system generates specialists not leaders

There’s a reason why public universities produce more CTOs than CEOs in our sample data.

But even if you took a wider look than this sample, we would find that Egyptians are well-known for their technical skills not leadership.

It’s more likely you’d find an Egyptian engineer at Google than a marketing manager. Many successful Dubai & Riyadh startups are built with 100% Egyptian tech teams.

In our education system, the most hardworking people get rewarded by excelling in exams and nothing more.

This mindset carries on to university then work. You study hard, you work hard and that’s how you make it.

We don’t learn anything about communication, presentation, teamwork, leadership, or influence. Even giving & receiving direct professional feedback is a rare skill.

These are the skills you need to fundraise, hire and grow a company, not just programming!

#5.3 We, Egyptians, are truly conformist people

because Conformity is the path to success

Much like that our education system only generates specialists not leaders, our culture also encourages specialists. Because specialists make money pretty early or at least with higher certainty.

The smartest & most hardworking students are encouraged and pushed by their environment (parents, relatives, friends, teachers) to become doctors or engineers.

Think of any big city outside Cairo; Tanta, Mansoura, etc. and go to their nicest/most expensive areas.

Who lives there? Usually it’s one of three

1. Successful physicians who own private clinics

2. Retired men who worked for 20-30 years in the GCC.

3. Power & legacy money; judges, senior military officers, etc.

No marketing director lives there, no CFOs lives there and most importantly no startup founder lives there.

For middle class families, financial success for their children has only two paths

1. Becoming a doctor

2. Working in a GCC country for 20-30 years

So, which path do you think they are going to push for?

Final Question

• Do local investors invest in upper-economic class founders because they are elitist and discriminate against other people who don’t look like them?

• Or because there’s not enough supply of exceptional founders who come from middle-classes. We don’t have enough Ameer Sherifs & Doaa Arefs who are willing to take risks and build companies?

*Note: this article is about who are the most funded founders, not the most ‘successful’ founders. There are hundreds of successful founders who don’t fit this criteria and found their success outside the world of Venture capital by building traditional businesses or innovative businesses in other sectors.

*Thanks to my friend, Ahmed Abdelsalam for reviewing and editing the first drafts of this article. Many of the ideas presented were originally his :”)