The Algerian Startup Fund has funded 65 startups since its inception in October 2020, according to Algerian Press Service, quoting the fund’s general manager, Ahmed Haftari.
Haftari stated at the end of his presentation at a press conference commemorating the fund’s first anniversary that the authority received 247 funding proposals from founders in its first year. A total of 65 projects were financed, all of which were innovative.
According to the managing director, 38 of the funded projects offer “high added value” in the domains of industry, pharmacy, artificial intelligence, new technologies, and the information economy.
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According to him, the funding for these 38 projects totals almost 400 million DA ($2.9m), which was provided by six Algerian state banks.
The Chairman of the Fund’s Board of Directors, Mohand Borai, lauded the six public banks for their “critical role” in the successful financing of innovative startups, emphasizing that they had awarded the Fund a first sum of 1.2 billion DA ($8.7m), APS said.
A Country Greatly Supporting Startups In Recent Times
Making A Specific Law In Support Of Startups
Although Algeria does not have a Startup Act strictly so-called, the country has enacted legislations and inserted provisions in existing laws to encourage its local startup ecosystem.
Specifically, Executive Decree 20–254 of September 15, 2020 created a national committee for the labeling of “startups”, “innovative projects” and “incubators”. The Decree has since been published in the country’s official gazette.
The implementation of the Decree has been instrumental in shaping a new future for the country’s startup ecosystem.
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For instance, startups and incubators in Algeria labelled under the Decree are the greatest beneficiaries of the country’s finance law. The country’s 2021 Finance law provides for changes in taxes (Tax On Professional Activities, TAP; and Value-added Tax VAT).
“Exempt from VAT and subject to 5% of customs duties, are equipment acquired by companies with the label “startup”, ” says article 84 of the Finance Act.
“The purpose of this measure is to allow the Algerian startup to devote all of its financial resources, as well as all the attention of its management to activities related to its startup and rapid development,” the law further states.
For companies with the “incubator” label, they are also exempt from TAP, Corporate Profit Tax (IBS), in addition to Global Income Tax (IRG) for a period of 2 years.
“Exempt from VAT are equipment acquired by companies with the “incubator” label entering directly into the realization of their investment projects,” the law states.
Launch Of ‘Algerian Startup Fund’, A National Fund For Startups; As Well As ‘Algeria Venture’, A National Startup Accelerator
The Algeria Startup Fund (ASF) focuses on equity investments in startups instead of credit facilities.
According to Ahmed Haftari, Director General of this fund which began operations last January, the value of the funding granted by the Fund to companies bearing the label “Startup” and “innovative project” oscillates between 2 and 20 million DA ($15k-$150k). According to the latest report, sixty-five innovative projects have already been funded from the Fund.
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Added to the national startup fund is a national startup accelerator “Algeria Venture”.
Located at the Parc des Grands Vents (Dounia Parc) in Algiers, the startup accelerator will be “the showcase” of innovative Algerian projects on the international scene, according to Yacine El-Mahdi Oualid.
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Algeria Venture aims to introduce, according to Oualid, the concept of “Open Innovation” which will allow Algerian and foreign companies to “outsource” their innovation projects by taking advantage of products and services developed by startups in the area of interest to them.
The site for the new accelerator inaugurated in the capital Algiers can accommodate up to 30 startups for a period ranging from six to 12 months, said the minister, adding that calls for demonstrations will be “periodically” launched in order to select projects having strong growth potential and which would be “interesting” to integrate into the accelerator.
A Youthful Minister Of Startups Has Been Instrumental In Influencing Policies Affecting Startups In Algeria
Algeria understands that the country’s startup ecosystem is largely driven by young people and has responded to this trend by appointing a youthful minister in charge of startups.
Aged only 27, Yacine Oualid became Algeria’s new Minister of Startups — a newly created ministry under the newly elected President Abdelmadjid Tebboune’s administration — on January 02, 2020.
He studied at the Faculty of Medicine of the University of Sidi Bel Abbès.
Prior to becoming Algeria’s Minister of Startups, in June 2016 Yacine Oualid created SSH, a company specializing in cloud solutions for businesses, which would later become the first private web host in Algeria. In September 2019, he and his partner founded Smart Ways3, a startup in the field of logistics and geolocation. In December of the same year, he founded Bright Solutions, a leading IT company providing IT solutions and services, headquartered in England.
“If I have to sum it up, I would say that the New World Economy is taking shape, and that Algeria wishes, and will, become a major player. My goal, with all the players in the sector, is to participate in this transformation of the largest country in Africa,” Yacine said upon assumption of office.
“In a more practical way, my role is first of all to set up a legal framework which is favorable to startups. Once set up, this legal framework will facilitate the creation of startups and their financing. The goal is to see materialise in a few months’ time, Algerian champions, who will be able to offer their services all over the world. Algeria is determined to become an African pillar of innovation and we want to offer our entrepreneurs the best framework for entrepreneurship and innovation,” he added.
Apart from influencing the enactment of startup-friendly policies, Oualid has been instrumental in activism against ‘bad regulations’ against startups in the North African country. For instance, his intervention ensured that Algeria’s first taxi service solely for women, Moov Services, re-launched its operations just three months after its activities were banned in Blida, Algeria’s northwestern province.
In Algerian Startup Fund In Algerian Startup Fund
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 write