startup

A perfect dinner party always has many plates on the table. You’ve got the main course and perhaps, salads and appetizers too. There’s always room for smaller bites like sambusa though, right? Like a dinner party, the Egyptian economy is composed of big and known business industries. However, rising is the startups sector. Smaller, but albeit for economies, very filling. Ever had enough sambusa? Probably not. Similarly, the Egyptian economy couldn’t have had enough of startups this year!

According to the World Bank, Egypt’s real GDP grew by 5.3% in 2018, up from 4.2% in 2017.  A noticeable portion of investment is believed to be due to startups, especially in Transportation, Food & Ordering, Shopping (or E-commerce) and Business Services. This investment is also forming four trends in the next few years.

1-Buses: Investments in Alternative Transportation

This year, Careem and Uber introduced a “new” method of transportation: buses. Uber has launched Uber Bus in Egypt, the first market worldwide, and Careem is also testing buses in Cairo and 13 other cities across Egypt. Uber and Careem were not pivotal in creating such a trend. Much smaller local startups were the pioneers in bringing this idea to Egypt.

In April, Swvl raised $8 million in Series A funding, one of the largest tickets Egyptian startups have received.  Buseet, launched in 2016, has grabbed an undisclosed amount and vows to solve the commuting problem. Additions to Cairo’s internal bus systems, connecting cities and booking online are: Tawseela, Eazy, Tazcara and others.

Booking a seat in someone else’s car through carpooling startups has also been on the rise. Traffic is clearly becoming unbearable, and that instigated a couple of millenials to invest their time to innovate in transportation. The sizable investment coming in to Egyptian startups in transportation and specifically buses shows that we’ve got a new trend coming: alternative commuting through private bus companies utilizing technology.

2-Food & Ordering: Investments to Avoid Call Centers

If you’re moving around, then you’re probably eating too, right? In Egypt, there are sub-trends in Food & Beverage. First, there’s an increase in numbers and investment in food ordering apps. Otlob’s foreign competitors have arrived: Glovo and UberEats. (Uber again, yes, they’re just loving Egypt this year). Elmenus is a local Egyptian startup that received a $1.5 million investment end of 2017 from Algebra Ventures; they launched their online food ordering option in 2018.

The second sub-trend is grocery apps, where you can order your daily vegetables, milk and other necessities through apps like Knockmart, Goodsmart, Weelo, Gomla Online, El5odary, Fakahany and more. Finally, the third sub-trend in ordering food online in Egypt is home cooks and gourmet chefs. Most notable startups are the duo GetMumm and Yumamia, where you can order homemade meals.

3-E-Commerce: Online Shopping Malls and Offers

 

Egypt has a large population, and despite internet penetration still hanging at a low 37.8%, that percentage converts into one of the largest markets in the region. Many of the known shopping websites such as Souq and Jumia enjoy a hefty chunk from this.  The government is getting involved with a National E-Commerce Strategy for Egypt as well as rumours of a new VAT tax on online transactions (not yet implemented at the time of writing this article).

Worth mentioning in investment this year is La Reina, the online marketplace for renting designer dresses. The website raised $1 million in 2018 and consumers could offer their dress up for rent, while others can browse dresses available.

Within e-commerce, other startups have emerged to service online shoppers. This year, startup elprices.com raised a total of $1.2 million, a tool for shoppers to compare the same product across different websites. In this category are also Yaoota and the mobile focused comparison startup, Btefrek.

4-Doing Online Businesses: Just Got Easier!

 

In order for the e-commerce sector to grow, and the push for retail to go online in Egypt, there were two major trends in business-to-business (B2B), less experienced by end consumers. The first one is the rise of logistics companies: Voo, Bosta and the newest addition, Halan. These startups also handle cash payments, which is still quite the biggest portion with a minority operating with credit card usage in the country. The second one is payment platforms and DCB (direct carrier billing).

The biggest news in 2018 was TPAY, when A15 sold a 76% stake to Helius Investment Partners. In startup lingo, a dragon exit. Sahar Salama, the Founder of TPay Mobile expanded operations to most countries in the Middle East, as well as Turkey and Pakistan.

 

An Exciting Year Ahead

 

The biggest investment of the year 2018 was in September with Vezeeta, raising $12 million led by STV. Vezeeta has given patients the ability to check doctor recommendations and book faster.

 

Egypt’s startup world is full of good news, but the reality is the death rate of startups in Egypt remains quite high. One of the startups mentioned in this article could already be dead by the time of publishing! Inflation has decreased the purchasing power of many, with private consumption, as part of the real GDP, actually decreasing from 4.2% to 3.9% in 2018 (World Bank Report).  Egyptian entrepreneurs face multiple barriers too, according to the latest Global Entrepreneurship Monitor for Egypt (2017).  The Egyptian government is expected to amend more policies to encourage the changes happening above.

 

If you are interested in the startup world and ready to discover what’s happening, head to https://startupsgalaxy.com/, a free online directory of startups in Egypt and a blog for startup millennials. With over 200+ startups across 14 categories, you can download interesting apps, checkout marketplaces and most of all, give them a try. Until then, always check out and try smaller plates at dinner parties; you might just find your new favourite food, sambusa.