The competition for international investors is on. Three years off IMF-backed reform. A 5.6% growth in GDP in the 2nd Quarter of 2019. A fast-declining pace of on-boarding new investors. Egypt is set to introduce a new legislation on tax that will bring the country back on track.
Here Is The Deal
The new legislation will focus on automating and simplifying customs and tax processes, Egypt’s Finance Minister Mohamed Maait said on Monday,
“Just yesterday, I contracted a company to automate all these unified tax procedures.” He said IBM (IBM.N) and SAP (SAPG.DE) secured the contract but did not disclose its value.
Now the government is working on a bill to unify tax procedures, Maait said.
“By the end of October, we will have the chance to issue the first draft to the business community, to civil society,” he added.
Maait however acknowledged that a lot still need to be done.
“I have to be very honest. There is a lot of work we have to do in order to make us more attractive to foreign direct investment,” Maait told Reuters in an interview on the sidelines of the Euromoney Egypt conference.
Egypt Has Launched A Series of Reforms So Far
Apart from devaluing its currency by half, Egypt has also been introduced a value-added tax and slashed fuel subsidies. One such significant innovation is Egyptians’ ability to now file their taxes electronically.
Changes to income tax would be procedural, and no changes would be made to overall tax policy or tax rates, Maait added.
Automated customs procedures are already in place at Cairo airport, Maait said, and are being developed at Port Said.
Apart from these tax procedural reforms, Egypt is also planning to sell off its long-delayed stakes in state-owned enterprises, with Maati saying plans to do so would definitely resume in the coming months.
“We strongly believe the private sector will be the main driver for this economy and for creating jobs,” Maait said. “We have to do a lot to give them the confidence, and to make the environment for them easy to do business.”
Euroclear Deal Will Now Allow Holders of Egypt’s Sovereign Debt to Clear Transactions Outside The Country.
Egypt recently signed, in April 2019, an agreement with Euroclear, Europe’s biggest settlement house for securities, to allow holders of its sovereign debt to clear transactions outside the country.
A clearing house manages the post-trade process of getting to a point where settlement can take place
“It is on track, but might not be next month,” Maait said on Monday, adding that a legal change was needed to govern the process and he hoped it would be ready at the beginning of 2020.
A clearing house is a financial institution that acts as an intermediary between buyers and sellers of financial instrument. They take the opposite position of each side of a trade, acting as the buyer to the seller and the seller to the buyer.
Egypt is now Euroclear’s 47th market by this agreement, said Sudip Chatterjee, head of global capital markets at Euroclear.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Egypt’s startup Doctoorum, a curated marketplace for medical tourism, has raised funding from the Dubai-based Numu Capital to help it grow locally and expand internationally.
Founded by Yemeni entrepreneur Begad Nasser, Doctoorum allows patients from around the world to get affordable and high quality medical treatment in Egypt, handling all other aspects such as transport and accommodation.
Begad Nasser, Founder Numu Capital
The startup graduated from the AUC Venture Lab accelerator earlier this year, at which time it secured an undisclosed investment from Numu Capital. The Dubai-based firm invests in startups to help them increase their traction and secure their next funding round, and prides itself on funding successful applicants within 30 days of the initial pitch.
“Doctoorum is a very promising venture, and Begad has a solid understanding of the industry and has built a top notch team that we believe in. We have been eyeing the medical tourism industry for a while, and we were thrilled when Begad pitched Doctoorum to us,” said Jamal Al-Mutarreb, managing director of Numu Capital.
Doctoorum is currently ramping up its growth, and plans to raise a Series A round in the next few months. With medical tourism on the rise globally, and the market expected to be worth US$180 billion by 2026, the startup is planning to expand its operations beyond Egypt and the MENA to destinations such as Turkey, India, Germany, and Thailand.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Egypt’s MoneyFellows has just joined the list of startup fundraisers in Africa. Currently, it appears Egypt’s startup ecosystem is having a field day. The Cairo-based fintech has raised over $1 million in a bridge round (Pre-Series A).
Here Is All You Need To Know
The investment came from 500 Startups and Dubai Angel Investors, both of which had previously invested in company’s seed round as well, last year, Beirut-based Phoenician Fund, and some individual investors including some of its previous angels.
MoneyFellows plans to use the latest investment for scaling the userbase mainly. The also plans to raise a $3 million Series A by the end of this year.
“With steady growth in our user base, we have been working hard over the past year in order to optimize and perfect our product and are now ready to begin our scaling journey. We will dedicate the money from this bridge round to raise greater awareness for MoneyFellows, in order to allow a much greater number of users to access our application and meet their saving and financial needs,” noted Ahmed.
The startup also has secured corporate deals with different companies in Egypt in order to facilitate the participation of their employees in money circles.
MoneyFellows has also partnered with different financial institutions including Fawry to make it easy for its users to pay their monthly installments and receive the payouts. Its partnership with Fawry allows users of MoneyFellows to pay installments at over 80,000 Fawry Point-of-Sale devices located all across Egypt and receive their payouts at over 200 Fawry Plus stores.
Founded in late 2016 by Ahmed Wadi, MoneyFellows is digitizing concept of money circles (ROSCAs), commonly known as gam’eya in Egypt and other Arab countries.
The years-old practice that is common across many countries in the world, known as chit funds in India, committee in Pakistan and Tandas in Mexico, allows a group of people (normally friends or coworkers) contributes a fixed installment every month to a pool with one of the members taking whole pool as payout every month. The circle ends when everyone receives their payout and is usually repeated if the participants are interested.
MoneyFellows with its group pooling platform for credit and savings is digitizing the entire process of money circles with a scoring model that compliments current offline model, making it more scalable, safe and efficient.
How The Startup Works
The users set up their profile on MoneyFellows and upload documents to verify their income and personal details. The more information and verification documents they share, the better their score and limit. Depending on MoneyFellows’ credit assessment, a user is then shown different matching circles. The user then selects one of these circles, a preferred (available) slot, and mode of payment and payout.
MoneyFellows makes money by charging a small service fee on monthly installments paid by the members.
“Our business model is currently comprised of collecting service fees from our users depending on their payout position in the money circle — starting with 5% fees for users with early payouts at the beginning of the circle, incrementally decreasing to zero fees for users paid out at the end of the circle. With millions of dollars moving through our accounts MoneyFellows are able to earn a percentage of float interest on our money in circulation. We are also planning to introduce several new options to generate revenue, including allowing our users to utilize MoneyFellows for bill payments, as well as using MoneyFellows in a variety of merchant locations,” explained Ahmed in a conversation with MENAbytes.
Speaking of their expansion plans, Ahmed said that they’re aiming to expand in MENA to different neighboring countries in the region in 2020 after closing their Series A. The startup also plan to expand into some Africa countries in 2021 as there are high prevalence and participation in offline ROSCA schemes, allowing MoneyFellows to access hundreds of millions of potential users in these markets. The startup is currently in advanced discussions with many key financial and telecommunication players in MENA to work on its potential expansion there.
Originally started in the United Kingdom, MoneyFellows moved its headquarters to Egypt later and currently employs a team of over 40 employees, all of whom are based in Cairo.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Every day, Egypt’s entrepreneurs wake up to pursue their next rounds of investments, expanding across borders, entering into strategic partnerships, without looking back. From Swvl to Colnn to Fawri, the Egyptian startup ecosystem is always in the news. But behind all these struggles and hustles, there are stories, the reasons that have made the country’s startup ecosystem one of the most successful in Africa.
In fact, Egypt has over the past few years scaled up its entrepreneurial activity, becoming the fastest-growing startup ecosystem in the Middle East and North Africa (Mena) region according to a report by Magnitt. Below are some of the reasons why Egypt’s startup owners’ struggles are continually on the rise.
Inspired by the falling inflation rate and an economy that is on its way to recovery, more people are gaining the confidence to launch their own business.
“We have seen a lot of change in the startup ecosystem in Egypt in the last couple of years. We see it in the number of our applications; it is doubling. Also, in the quality of the entrepreneurs who are applying to join the programme,” says Marie Therese, managing partner at accelerator Flat6Labs Egypt.
With a population of more than 100 million, Egypt’s market has the potential to be one of the most lucrative and it is attracting the attention of not just startups from the wider region, but also investors.
“Over the past three years we have been seeing more access to finance and more interest from global investors to invest in the ecosystem, adding to that the governmental initiatives supporting starts and SMEs,” says Mohamed Hamza, associate director at AUC Venture Lab. “We have been seeing an increased awareness about entrepreneurship through the work of various stakeholders, appearing on TV and having dedicated programmes directing attention towards the topic as well as the introduction of entrepreneurship education as a requirement in a number of public universities.”
Presence of Venture Capital Firms, Accelerators and Incubators in Egypt
There is also the presence of an appreciable number of venture capital (VC) firms, accelerators, and incubators in Egypt. These startup funders have been on the increase, and they are continually showing interest in entrepreneurship in Egypt.
As a matter of fact, a report by the Global Entrepreneurship Monitor (GEM), launched by The American University in Cairo School of Business in 2018, noted that 82 percent of Egyptians perceive successful entrepreneurs as having high social status and almost 76 percent of Egyptians, mostly youth, perceive entrepreneurship as a good career choice, compared to a global average of 61.6 percent. This is even brightened by 55.5 percent other Egyptian non-entrepreneurs surveyed who expressed their interest in starting their own business, a percentage that is double the global average.
“There is a shift in the mindset. Young people are more eager now to start their own projects. Also, there are so many entities that provide help and support to startups. The more young people know about these entities and the fact that there is so much support, the more they are encouraged to start their own projects,” says Therese.
Lack of Interesting Jobs For Young People
Again, Egypt’s younger population may be showing increasing interest in entrepreneurship because young people are just getting fed with uninteresting jobs.
One of the biggest drivers for the rise in entrepreneurship in Egypt is the lack of “interesting jobs for young people”, notes Therese.
This is seen in the statistics. Egypt’s overall unemployment rate currently stands at around 8 percent according to CAMPAS, Egypt’s statistics agency, however, its youth unemployment rate as of 2018 was more than 32 percent according to the World Bank.
According to the GEM report cited above, opportunity-driven entrepreneurship has been decreasing at the expense of necessity- driven entrepreneurship that is driven by the lack of other work alternatives, increasing from 31.1 percent in 2016 to 42.7 percent in 2017, compared to a global average of 22.2 percent.
You would have no choice here but to cite Swvl as an example of an Egyptian startup trying to confront a global problem from a local perspective. Take for instance the historic city of Cairo, Egypt’s capital, a city noted with a dense population of 30 million, its crumbling infrastructure and other social and infrastructural problems it is facing. Startups within the city have taken note of these problems and have hopped in and have accepted Cairo as fertile ground for solving problems that many cities in emerging markets around the world are experiencing.
Take a look at Egypt’s transport sector. Cairo has excelled here by solving the transportation problem for overcrowded cities with poor public transportation systems. The city has seen startups that have provided the solutions. Swvl is one such example. Swvl is an application for booking buses. The startup recently closed a $42 million investment round, marking the biggest VC investment deal in the country and the highest in Mena in the second quarter of this year.
“Startups can offer many innovative solutions for the big issues. We cannot say they are solving the whole thing at one time, but at least they are offering a know-how and a new way of dealing with things just like what happened with the transportation market starting with Uber then the rise of Careem then Swvl which is much more Egyptian and much more related to our situation and streets,” says Ahmed Adel, business mentor at Fekretak Sherketak.
Swvl understood the Egyptian market and this enabled it to become Egypt’s transport market leader. By setting the pace, the startup highlighted the opportunities in Egypt’s buses sector with both Uber and Careem launching their own service.
“We can even see that the public transportation sector started to use mobile applications such as Mwasalat Misr which I think will be a good experiment that will be generalised soon,” says Adel.
However, notwithstanding the innovation and enthusiasm in Egypt’s startup ecosystem, there remains plenty of challenges that hinder the growth of startups in the country, many of which end up failing. Egypt has the highest rate of business discontinuation among the 49 countries studied in the GEM report with a rate of 10.2 percent in 2017, a significant increase from 2.7 percent in 2010.
The report states that this high discontinuation rate is as a result of the challenging business environment reflected mainly in the lack of profitability for businesses and the difficulties in accessing capital.
“Investors need to understand that the nature of investing in startups is different,” says Mohamed Khedr, managing partner at Endure Capital and founder of Fatakat, an online network aimed at Arab women. “Investors are used to dividends and thus find it difficult to supply startups with money for seven or 10 years and wait for its exit until they can have their money.”
Khedr says many investors “do not understand that they can have a maximum of 30 percent stake because the founders still have upcoming investment rounds and stake to share and do not want to end up with 3 or 4 percent share”.
Other investors in Egypt’s startup ecosystem also tend to be overbearing and, most times seem to get too involved in the day to day running of the startups. This perhaps leads to the ultimate disintegration of the startups before they even begin to gain traction.
The Regulatory Environment Is Also A Hindrance
Egypt’s regulatory environment is also bad for most startups. This is worse when it comes to investing in startups.
“There needs to be new laws that are introduced specifically for startups such as shareholders’ agreement as well as regulations that ease taxation and financial restrictions and facilitate procedures of registering startups,” says Khedr.
Lack of Experience
Egypt’s startup owners may not be getting their acts together after all, and this may be a crucial reason why most startups in the country fail. However, this is not an Egypt factor alone. Generally, Egyptian entrepreneurs have a low fear of failure compared to the global average in GEM.
Nevertheless, despite these positive attitudes, most entrepreneurs in Egypt insist that running personal businesses or startups are still a tough and stressful job, especially with extended working hours, high risk and high level of uncertainty. About nine out of 10 startups in MENA fail. Few are however aware of the failure rate. This is because much of the media focus on the success stories, investment rounds, and acquisitions.
“One of the biggest reasons why startups fail is experience. You can learn how to be an entrepreneur but not open your own business,” says Adel who founded a startup when he was still a university student and had to shut it down a year later. “You can be an intraprenuer. You can join a startup to learn more. I am not encouraging students to open their startups without experience. If you have a good idea that you think will change the market, just get some experience in your team.”
Lessons In Failure
Yet, there are lessons to be learned in failure. Many entrepreneurs in Egypt who have failed to learn from their mistakes. Most of them strive to start new businesses. Wasla Browser is a notable example. The Wasla Browser is the third venture for Wasla Browser’s team members after their initial startups failed. While university graduates continue to found their own businesses in the hope of becoming their own boss and creating employment opportunities for themselves, it is the ones who are on their second or third ventures that are likely to see success and it is these founders who are contributing to the most value to Egypt’s startup ecosystem.
“The youngest people think that they will be their own decision makers, and no one will tell them what to do and so on which is actually not true. An entrepreneur is bossed by the market itself, the customers and investors,” says Adel.
Contributions from Yasmeen Nabil, a researcher with Wamda, a platform of integrated programs that aims to accelerate entrepreneurship ecosystems throughout the MENA region.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
The Basketball Africa League (BAL) today announced Cairo (Egypt), Dakar (Senegal), Lagos (Nigeria), Luanda (Angola), Rabat (Morocco) and either Monastir or Tunis (Tunisia) as the host cities where the inaugural BAL regular season will take place and Kigali (Rwanda) as the host city for the first-ever BAL Final Four and BAL Final.
Additionally, the BAL announced NIKE and Jordan Brand will be the exclusive outfitter of the new professional league featuring 12 club teams from across Africa and scheduled to begin to play in March 2020.
The announcements were made by BAL President Amadou Gallo Fall during a reception at the Musée des Civilisations Noires in Dakar in the presence of FIBA Secretary General Andreas Zagklis, FIBA Africa Executive Director Alphonse Bilé, NBA Commissioner Adam Silver and NBA Deputy Commissioner Mark Tatum, along with current and former NBA and WNBA players.
“Today’s announcements mark another important milestone as we head into what will be a historic first season for the Basketball Africa League,” said Fall. “We now have seven great host cities where we will play and our first partnership with a world-class outfitter. We thank our first partners NIKE and Jordan Brand for supporting us on this journey and ensuring our teams have the best uniforms and on-court products.”
Beginning in March 2020, the six cities will host a regular-season that will feature 12 teams divided into two conferences, with each conference playing in three cities. The regular season will see the 12 teams play five games each for a total of 30 games, with the top three teams in each conference qualifying for the playoffs. The six playoff teams – the “Super 6” – will play in a round-robin format to determine the four teams that will advance to the BAL Final Four and BAL Final in Kigali, Rwanda in late spring 2020. The BAL Final Four and BAL Final will be single-elimination games.
NIKE and Jordan Brand will outfit the league’s 12 teams with official game uniforms, warmup apparel, socks and practice gear, with six teams featured in NIKE and the other six teams in Jordan Brand. The collaboration with NIKE and Jordan Brand marks the BAL’s first partnership.
The announcement about the NBA and FIBA’s launch of the BAL, which would mark the NBA’s first collaboration to operate a league outside of North America, was made at the NBA All-Star 2019 Africa Luncheon in Charlotte, North Carolina on Saturday, Feb. 16.
The NBA and FIBA also plan to dedicate financial support and resources toward the continued development of Africa’s basketball ecosystem, including training for players, coaches and referees, and infrastructure investment.
Additional details about the BAL will be announced at a later date.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
Expect much of startup funding to still come from Egypt before this year ends. This goes to say that the startup ecosystem in the country is very much alive and that a lot of young startup owners are now more determined than ever. New to the list are two startups, XPay, and Colnn which have just raised an aggregate of $350, 000.
XPay
Egypt’s fintech startup XPay secured $250,000 in pre-seed funding from two angel investors. XPay is part of the cohort currently participating in Startupbootcamp Fintech Cairo.
XPay was founded in 2018 by Dr. Mohamed AbdelMottaleb, to empower communities to go cashless. The startup enables universities, schools, gyms, social and sports clubs, residential compounds and different other communities to set up their offerings and collect payment online. XPay’s mobile app allows members in these communities to pay in less than a minute using debit/credit cards, mobile wallet, and a cash collection service.
“XPay was established to become the platform of choice for all members of the family — eliminating the stress of juggling numerous transactions, subscription and bill payments, payment methods and due dates. One platform to ease the unavoidable inconvenience of modern living,” Dr. Mohamed AbdelMottaleb, founder and CEO of XPay said in an interview.
The startup plans to use the use of this funding to grow the company and also expand its team.
The Cairo-based ed-tech startup Colnn has also raised $100,000 from EdVentures, the VC arm of Egypt’s leading publisher Nahder Misr, the startup announced earlier this week. EdVentures also runs an accelerator program for education startups in Egypt.
Founded in 2015 by Tamer Samir, Colnn, per the statement, is a cloud-based school management system that comes with a mobile app, enabling schools to manage their operations, processes, activities, and communication between parents, teachers, and students. The mobile app by Colnn connects teachers and parents allowing parents to keep an eye on their children’s performance and daily activities.
According to Colnn’s website, the students also get an online account that enables them to access announcements, attendance, homework, online quizzes, and their time table.
It’s not clear if Colnn has a per-student subscription model for schools (which is what’s used by a large number of similar SaaS startups) or it charges the school a monthly subscription fee regardless of the number of students they have.
The startup, according to the statement, works with each school to customize its solutions and software according to their requirements (as long customization requirements meet their strategy).
”We’re not sure about the extent of customization but it would be safe to assume that it includes minor tweaks as anything major normally requires a lot of resources and the cost of those changes and upgrades normally outweigh the benefits unless its a very big client,” the startup noted.
Tamer Samir, founder, and CEO of Colnn commenting on the investment said, “Becoming a part of EdVentures will definitely support our expansion plans. Nahdet Misr’s over 80 years of experience in the education sector and its local and international network will help us enter new markets.”
Dalia Ibrahim, the Founder of EdVentures and the CEO of Nahdet Misr Publishing House, added,
“We were keen to add Colnn to our portfolio of companies as it perfectly aligns with our objective of developing and offering new and innovative educational solutions that further strengthen the educational sector in our country.”
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
This is a major breakthrough for digital platforms across Africa. Less than 9 months after another technologically focused finance solution startup, Sarwa Capital, opened its shares for public subscription, Fawry, the Egyptian digital payment solution has announced it is ready to open itself to the public too by going on its First Public Offering (IPO )
Here Is What The IPO Is Going To Look Like
Although the IPO would come late August 2019 or early 2020, Fawry is only ready to list 36% or more of its stake in the company on the Egyptian Stock Exchange.
The company is eyeing proceeds between EGP 2 and 2.5 bn, which would make the offering the largest Egypt has seen since Emaar Misr raised EGP 2.28 bn in 2015.
It would also value Fawry at EGP 4.5–5.5 bn. The offering will consist of a substantial international component, with the roadshow is set to cover the GCC, European, US, and South African markets.
The offering will include a private placement for institutional investors and an initial public offering (IPO) for retail investors in Egypt at the same price, said investment bank EFG Hermes, which is managing the sale.
The offer price is not yet known as the bank did not give any indication on the expected offer price.
Fawry’s managing director this month told Reuters the company had begun preparing for the IPO on the Egyptian Exchange and that the process would be carried out in 2019 or early 2020.
Financial advisor FinCorp, which Fawry hired to conduct a fair value study, is due to submit its report to the Financial Regulatory Authority within two weeks, after which the book-building process will begin, the sources hinted.
Fawry’s expansion plans include increasing its points of sale, buying new payment machines, and developing Fawry Pay. Fawry also signed an agreement with Dubai Islamic Bank last month to launch a trial run of its services in the UAE this summer.
Here Is Why This IPO is Significant For African Technology Focused Startups
Fawry is owned by local and foreign investment banks and was founded in 2009. About 8% of its shares are in the hands of management and employees.
Fawry’s network processed 600.1 million transactions last year with a total value of 34.2 billion Egyptian pounds ($2.1 billion), EFG Hermes said in its statement.
Fawry made core profit of 152 million pounds in 2018, up 41.2% on the previous year, indicating the increasing viability of FinTech business model across Africa.
The last IPO by a private company on the Egyptian Exchange was financing solutions business Sarwa Capital last October.
Indeed, this IPO shows that Fintech in Africa has increasingly become more profitable as banks. The ability to pay dividends from profits is a major factor every business owner should have in mind before deciding to embark on IPO, and with Fawry which basically runs online with little or no physical presence doing so, this is a major announcement that digitally-focused businesses have finally come to stay.
This notwithstanding, so much credit has to go to the acquisition that happened as far back as 2015. In 2015, a consortium of international financial investors acquired a majority stake in Fawry, a deal that valued the company at EGP773 million (US$100 million) and saw the company adopting an expansion strategy outside of Egypt. The investors are the Egyptian-American Enterprise Fund (EAEF), pan-African private investment firm Helios Investment Partners, and the International Finance Corporation.
* $1 = 16.5600 Egyptian pounds
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Egypt’s Swvl is coasting home big time. The startup is never looking back. Its next bus stop is Lahore, Pakistan ’s capital. Watch out for how the two-year startup is invading Uber, Careem and Airlift’s territories and raising huge funds to scale its operations. Mustafa Kandil is indeed never looking back. Swvl’s wind is gradually sweeping strong. The two-year-old startup is now in Egypt, Kenya, Pakistan, and counting.
An In-depth Look At The Momentum
This move by Swvl, the Cairo-headquartered app-based bus booking startup to Pakistan makes Pakistan Swvl’s third market after Egypt and Kenya.
Swvl had announced plans to expand to Pakistan earlier this month.
The Egyptian startup seems to have developed a habit of being secretive about their expansion plans (which makes sense).
In early 2018, when Swvl raised tens of millions of dollars in its Series B-1, the startup had said that it will use the money to expand to Southeast Asia, starting with Manila in 2019 Q1 but they actually expanded to Kenya which was never revealed previously.
Last month, Swvl said that it is planning to expand to Nigeria (by mid-July) but now we’re learning about their Pakistan expansion.
Founded in 2017, Swvl dubs itself as a private premium alternative to public transportation enabling riders to book seats on its network of “high-quality” buses (owned and operated by third-parties). The startup operates bus lines on fixed routes with customers boarding the buses from specific pick-up spots to be dropped at pre-defined (virtual) stations.
The Startup Is Fully On Ground In Lahore and Ride Sharers Are Invited To Place Bookings
Although Swvl has not shared the details about the number of lines and buses its operating in Lahore, Lahore city is, however, Pakistan’s second-largest home to over 10 million people and is similar to Swvl’s home market Cairo in many ways.
Both the cities have a poor public transportation system (things in Lahore have improved lately with the government-run bus rapid transit service but it only covers a specific part of the city), long commute times, and traffic congestion is some of the similarities the two cities share.
And that is why both the cities offer a great opportunity to startups like Swvl to solve some of these issues.
Expect A Stiff Competition But An Easy Triumph
Swvl is not the first player in this category in Pakistan. Airlift, a local startup that was launched earlier this year and is in the process of closing their first investment round has already gained decent traction in Lahore (and is apparently available in Pakistan’s largest city Karachi as well).
But Swvl obviously has the resources to take all these players on. Backed by some of top regional VCs including BECO Capital, Raed Ventures, Oman Technology Fund, and global names like Endeavor Catalyst, Swvl has raised over $80 million in VC money to date which makes it one of the best-funded startups in MENA and the best-funded startup in this category.
Pakistan might be a new market for Swvl but having worked there earlier, their team has enough know-how about the dynamics of local transportation ecosystem. Mostafa Kandil, in his previous role as Market Launcher for Careem, has launched different cities in Pakistan. Swvl’s Head of Global Expansion Shahzeb Memon, a Pakistani national, was previously with Careem (Pakistan) serving them as Supply Manager before joining Swvl in 2018.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Organizers of the Second Intra-African Trade Fair (IATF2020) have promised that it will surpass the achievements of the inaugural trade fair held in Cairo in 2018 by attracting 10,000 participants and generating intra-African trade and investment deals worth more than $40 billion. This was made known by Prof. Benedict Oramah, President of the African Export-Import Bank (Afreximbank).
Prof. Oramah was speaking at the formal launch of IATF2020 during the African Continental Free Trade Area (AfCFTA) Business Forum 2019 held on the sidelines of the 12th Extraordinary Summit of African Union (AU) Heads of State in Niamey, Niger.
He told guests that the trade fair, scheduled for Kigali from 1 to 7 September 2020, would attract more than 1,100 exhibitors from over 55 countries.
“Working with our esteemed partners, we will exceed the achievements of 2018,” he said, describing IATF2018 as a resounding success, not in the colourful displays exhibited, but in the showcasing of diversity of tradable goods by about 1,100 exhibitors from 45 countries and in the execution of deals worth about $32 billion.
That trade fair resulted in a Nigerian technology company winning a $100-million contract to provide technology-based solutions to the South Sudanese government; an Egyptian company winning contracts in many African countries to supply and install energy generation and distribution equipment worth close to $1 billion; Egyptian and Tunisian companies signing a $50-million partnership deal to create a joint venture for assembling home appliances; and the signing of a $3-billion energy generation project between an Egyptian company and an African government, the largest-ever intra-African project executed exclusively by African entities, including financial institutions, he noted.
“The momentum created by the maiden IATF and the historic launch of the African Continental Free Trade Area (AfCFTA) will sustain the growth of cross-border trade and investments,” he affirmed.
Also speaking, Amb. Albert Muchanga, the AU Commissioner for Trade and Industry, said that the IATF was one of a set of activities planned by the African Union Commission to support the implementation of the AfCFTA. The others included the African Trade Observatory, a portal for real-time information on business opportunities.
Soraya Hakuziyaremye, Minister of Trade and Industry of Rwanda, said that it was important for the African private sector to take advantage of IATF2020 to present and exchange their products and for entrepreneurs to use it to boost their visibility.
The Second Intra-Africa Trade Fair (IATF2020), which will take place in Kigali from 1-7 September 2020, is expected to attract more than 1,100 exhibitors from 55 countries and to provide a platform for sharing trade, investment and market information. It will enable buyers and sellers, investors and countries to meet, discuss and conclude business deals as well as provide an opportunity for exhibitors to showcase their goods and services and to engage in business-to-business exchanges.
The key features include an IATF2020 Conference, a Creative Africa initiative, which will showcase Africa’s creative economy, Country Days dedicated to specific African countries, and an interactive online Virtual Trade Fair.
IATF2020 is being organized by Afreximbank, in collaboration with the African Union, and is hosted by the Government of Rwanda. The event partners are the African Development Bank, United Nations Economic Commission for Africa represented by the Africa Trade Policy Centre; Afrochampions Initiative; Pan African Chamber of Commerce and Industry; World Trade Centre Miami; Export Development Authority of Egypt; and International Islamic Trade Finance Corporation.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
Egypt’s Swvl, a mass-transit system that enables riders heading in the same direction to share a ride in a van or bus, has raised US$42 million as it looks to expand into other parts of Africa, including Nigeria.
Its latest round of investment is the largest ever secured by an Egyptian tech startup, beating its own record, and is co-led by Vostok Ventures and BECO Capital. Also participating are Arzan VC, Autotech, Blustone, Endeavor Catalyst, MSA, OTF Jasoor Ventures, Sawari Ventures, and Property Finder chief executive officer (CEO) Michael Lahyani.
The funding will see Swvl continue to solidify its position as a leader in building tech-enabled public transportation. It already facilitates hundreds of thousands of rides each month, serving tens of thousands of customers on its network of more than 200 routes in Cairo and Alexandria in Egypt, and Nairobi in Kenya. Other African launches are planned, while Swvl is also launching an R&D facility in Berlin, Germany.
“The plan is to be in at least two or three more African cities by the end of the year,’’ Mostafa Kandil, the founder and chief executive officer, said. “Lagos, Nigeria, is most likely the next market.’’
Not Afraid Of Competition
Although Swvl is the first riding app to offer bus services in Egypt, giant transportation startups Careem and Uber have recently offered their own bus services.
Mostafa Kandil, Egyptian CEO and founder of Swvl, has however noted that the joining of Uber and Careem to the industry has not influenced Swvl’s growth asserting that they have witnessed remarkable development since the two competitive players have launched. In 2018, the startup was valued at nearly US$100 million, becoming the second Egyptian company after Fawryto reaches these figures.
The startup has recently signed an agreement with Ford motor company to deploy more cars on the road. Ford Transit, which the startup intends to use is already the third best selling van of all times. SWVL is already in possession of about 100 Ford Transits. Hazem Taher, SWVL’s Head Marketing Manager, said the vans were ready to go and they’re excited to push them on SWVL’s route.
The startup launched its bus sharing services in Nairobi early this year after raising more than US$30 million in 2018 at a valuation of approximately US$100 million.
Founded in 2018 by Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh, Swvl is presently available in 200 routes between Cairo, Alexandria, and Nairobi.
To date, the app which is available for both Android and iOS users has registered over a million customers who frequently use their services.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
