Investment Growth in Egypt's Startup Ecosystem

Investment activity within Egypt is experiencing considerable growth, extending beyond startups to encompass the investment funds that support them. Seed accelerator Flat6Labs recently announced the successful second closing of its Egypt fund, designed to bolster early-stage ventures and offer subsequent investment opportunities.

Fund Details and Expansion

Initially targeting EGP50 million (~$3.2 million), the fund ultimately secured EGP207 million ($13.2 million) in commitments. Launched in 2011, Flat6Labs operates as a regional seed accelerator with a presence in both Egypt and Tunisia.

The Cairo program, initiated in 2017, aimed to invest in over 100 Egyptian startups within a five-year timeframe. Participating startups benefit from resources such as office space, legal and marketing assistance, and access to mentorship networks.

Previously, investments ranged from EGP500,000 to EGP750,000. However, following this funding round, Flat6Labs has increased its investment amounts to EGP1.5 million (~$95,000), with potential for up to EGP3 million (~$191,000) in follow-on funding post-program for select companies.

Key Investors

The International Finance Corporation (IFC), the MSME Development Agency, Egypt Ventures, and the Egyptian American Enterprise Fund serve as anchor investors in Flat6Labs’ seed fund. Sawari Ventures, which recently finalized a $71 million fund, also contributed to this second close.

This participation from Sawari Ventures aligns with their previously stated intention to allocate 10% of their fund to seed-stage companies associated with Flat6Labs, as reported in April.

Sawari Ventures' Perspective

Wael Amin, managing partner at Sawari Ventures, explained their strategy: “Our fund strategy consistently includes allocating a portion to the seed stage, recognizing its distinct requirements in terms of process, culture, and support.”

He further stated, “Investing in Flat6Labs Accelerator Company allows us to profitably engage with Egyptian companies at a very early stage, gain insights into emerging ecosystem trends, and enhance our visibility within the ecosystem.”

Broader Investment Trends in Egypt

This second close represents one of four venture capital funds recently established to support Egyptian startups. Following Sawari Ventures’ fund closure, Algebra Ventures announced the launch of a $90 million second fund.

Additionally, GIZ Egypt introduced a €100 million funding program, intending to allocate between €25-30 million to four MENA-based fund managers, with a specific focus on Egypt-based startups.

Flat6Labs' Impact and Portfolio

Flat6Labs is a prominent and active seed-stage accelerator across the African continent. Within Egypt alone, the accelerator has completed seven cycles and invested in 62 startups.

The firm functions as a valuable resource for early-stage investors seeking promising companies to support. A significant number of startups within Flat6Labs’ portfolio have attracted investor interest, and half have secured follow-on funding from Flat6Labs, totaling EGP145,000,000 (~$9.25 million).

Notable companies within the Flat6Labs portfolio include Welnes, Glued, CreditGo, and Docspert Health.