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Context for the country’s current state and startup potential
The past few months have been full of exploration for Matt and I as we’ve traveled around Africa to meet founders and to better understand startup ecosystems on the continent. Today, you find me in Cairo, Egypt. Last week, we were in Casablanca, Morocco and next week, we will be in Lagos, Nigeria. Side note: For those who are interested (and not familiar with the ecosystem), we are hosting a Zoom webinar on “Nigeria’s Startup Scene: How Does it Stack Up?” June 19th, 12:30 PM Eastern. Register here.
Renew Capital has been exploring Egypt for about a year now, and we are currently sourcing startups for investments as part of Renew Venture Lab (apply here). We have so much to learn, but these are some of our key takeaways on Cairo this week and our earlier trip in March.
Here are a few things we have learned:
- A startup leader in MENA - Cairo's startup ecosystem is a leading hub in the MENA region, driven by strong sectors such as fintech, e-commerce and logistics. The e-commerce sector seems to be growing rapidly due to a young population and increasing internet penetration. Cairo’s ecosystem benefits from a supportive environment with various active investors and other stakeholders. Cairo's strategic location and robust talent pool further enhance its appeal as a startup hub.
- Cairo is a city of contrast - I’ve worked in frontier and emerging markets for 20 years. But in Cairo the contrast was unique. First, you have ancient and new - You’ll find the Pyramids of Giza 15 minutes from the center of town, and then 30 minutes in the other direction you have New Cairo and the New Administrative Capital with giant IT parks, IKEA, beautiful malls, modern restaurants and the tallest building in Africa. The contrasts are almost overwhelming. Next, you have outside versus inside and day versus night - Cairo is dusty and dense and on the outside of buildings and during the day, the old city can look a bit run down. But, when you go inside it’s like a new world. You find beautiful old buildings with great architectural designs and finishing work. It’s clean and beautiful. In Cairo, you have to know where to look. Also, once the sun sets, the buildings are lit up and it’s absolutely breathtaking!
- Cairo is surprisingly affordable - Granted, the currency devalued in March by almost 40%, but even before that, internationals who live here describe Cairo as a very affordable city. A Starbucks run in March for 4 people - lattes, cappuccinos, juice drinks and snacks ran us about $6.
- Cairo is large! - Cairo is the largest city in the Arab world with a population at almost 10 million and the whole urban area being above 22 million. Egypt has two of the continent’s largest cities, with the second being Alexandria. As many cities and populations in the developed world age and shrink, Egypt and Cairo are forecasted to grow with nearly 43% of Egyptians living in urban centers.
- Egypt is wealthy, relative to other SSA countries - Cairo had Starbucks, McDonalds, Hardees (Carl’s Juniors), delivery services, Uber, IKEA, Carrefour, everything you could want. We all know this development in South Africa. But, prior to my first visit in March, I didn’t know I would also find it in Cairo. Its GDP per capita is more than $4,000, which is one of the wealthier countries in Africa. 10th among the 54 countries on the continent, and many believe the structural reforms President Abdel Fattah el-Sisi is putting in place will help the country see higher GDP growth in the coming years.
- Egypt (and Africa) may become the focal point of a shift in geopolitical power - From an Economist article titled “Gulf countries are becoming major players in Africa”, “As African leaders seek alternatives to dwindling Chinese loans and Western aid, the Gulf’s rise is reshaping geopolitics on the continent, with effects good and bad.” Cairo - as the epicenter of Africa’s Arab cultural and economic influence - will be one to watch as this geopolitical reshuffle happens. For example, in Nov 2023 Saudi pledged to invest $25B in Africa by 2030.
Go Deeper on Egypt?
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
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