The Egyptian startup scene is thriving, and investors continue to pour in. Added to the growing list of startups which have secured funding in the North African country is the Cairo-based Agri-Fintech platform Mozare3 (smallholder farmer in Arabic) which has closed a seven-figure pre-seed funding round led by Algebra Ventures and Disruptech Ventures, with participation from EFG-EV and a group of reputable angel investors.
“Egyptian smallholder farmers have limited access to financing and no direct access to markets. We believe that an agri-fintech platform focused on those farmers, like Mozare3, would revolutionize the way farmers plan, farm and sell their crops,” said Hussein Abou Bakr, founder and CEO of Mozare3.
Mozare3 will use the funds to improve its technology, increase its staff, and expand its farmer network.
Why The Investors Invested
There are many reasons why the investors invested in Mozare3 in this round of financing.
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First, the startup is a fintech company targeting the country’s often less digitalized but important agric sector. The fintech space in Egypt is still largely unexplored, despite moves by startups to fill that void, with Soliman S. AlTayyar, an Egypt-based capital markets and investment expert telling Afrikan Heroes that, currently, digital payments to GDP is 3% and that the Egyptian government is aiming to increase this to 10% in 2–3 years.
On the other hand, agriculture currently constitutes more than 10% of Egypt’s GDP as well as 25% of its national employment.
“Farmland is very fragmented with more than 40% of the farms with an area of less than 1 acre,” said Tamer El-Raghy, co-founder of Mozare3. “This fragmentation represents an opportunity for an agri-fintech platform, like Mozare3, to bring efficiencies to the supply side, by providing those farmers with innovative financial products, agronomy support and access to markets, and hence turn those farmers into contract-farmers, in order to fulfil the growing demand of consumers, processors and exporters.”
The above reason was particularly pointed out by Tarek Assaad, Managing Partner at Algebra Ventures.
“The agriculture industry suffers from price opaqueness, supply fragmentation and high levels of fraud, to name a few of the challenges,” Assaad said. “We believe that it is one of the segments of the Egyptian economy that can benefit the most from tech efficiencies. We had been looking at making an agritech investment for some time and are delighted to support Hussein and Tamer as they address this massive opportunity. We were impressed by the vision, capabilities and passion of the Mozare3 team, and we are excited to be part of their journey.”
Again, Mozare3’s team was instrumental in assisting the startup to secure the funding. Co-founder Abou Bakr brings to Mozare3, 20 years of experience in small-scale and commercial farming, food manufacturing, and foreign trade as a third-generation agri serial entrepreneur. Bakr had formerly created Plantform, a leading agri-processor and exporter that sourced from smallholder farmers in over ten governorates across Egypt, prior to Mozare3. For his part, El-Raghy brings with him more than 10 years of experience in Mergers & Acquisitions, Private Equity, and Venture Capital investments in the agri and food space in Africa as the MD of Acumen Capital Partners, a leading impact Agri VC fund manager in Africa.
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But perhaps, the most cogent reason for why the investors invested in this round is the fact that the startup was started last year with the support of an important partner Mohamed Okasha. Okasha, who is currently the Managing Partner of Disruptech Ventures (an investor in this round), has over 12 years of experience in the fintech space as the co-founder and was also the ex-MD of Fawry, Africa’s second company to achieve unicorn status.
And so, the capacity of Mozare3’s team to deliver naturally stands out for Disruptech.
“Very excited to lead this round for Mozare3 — a large, underserved segment and very experienced management team. We have been working closely with Mozare3 founding team since a year to launch the first Agri-Fintech company in Egypt. We are very confident that Mozare3 will digitally transform this market and enable farmers access to finance and market information in a very innovative way. We are happy that Mozare3 is Disruptech’s first investment in 2021 and the fifth since launch,” Mohamed Okasha, Managing Partner at Disruptech said.
Then again, both Disruptech Ventures and Algebra Ventures are all venture capital firms based in Egypt. In 2019, Disruptech established an Egypt-focused $25 million fintech fund and subsequently made its first two investments in Khazna & Brimore. It subsequently followed it up with investment in ecommerce startup, Fatura. The fund invests in Egyptian fintech startups across different stages.
Algebra Ventures is a $50-million Cairo-based venture capital fund that invests in early-stage technology companies in Egypt and the MENA region. Its LPs include Cisco, the European Commission, EAEF, EBRD, IFC, and private family offices. Algebra has invested in transformative technology companies in MENA, including HolidayMe, Trella, Elmenus, Dsquares, Halan, among others.
A Look At What The Startup Does
Hussein Abou Bakr, Tamer El-Raghy, and Mohamed Okasha created Mozare3 in the year 2020. Mozare3 aims to provide access to creative financial products, markets, and agronomy funding to more than 20 million underserved, unbankable smallholder farmers and their families in Egypt.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer