Outliers #016

The modern Egyptian Empire

Servicing a population larger than the USA with a quickly increasing level of wealth, Egypt has emerged as the Middle East and North Africa's startup leader. One of few parts of the world to see venture funding increase in 2022, we dive into the companies being built on the banks of the Nile.

Plus, the 20 fastest growing cities on Earth and the reliance of Silicon Valley on foreign tech talent.

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The most interesting global Seed to Series A deals from outside the US this week:

  1. Keka HR - US$57m - Hyderabad, India - HR
    Raising one of the biggest Series A’s in Indian history, Keka helps automate HR management for over 5,500 SMEs and runs the payroll for 1.5m+ employees monthly.
  2. Vow - US$49.2m - Sydney, Australia - Cultured Meat
    Growing realistic meat in a Petri-dish, Vow is now set to unrol their first product, Morsel, a quail tasting meat.
  3. Blnk -US$12.5m - Giza, Egypt - Fintech
    Blnk provides Egypt’s largely credit-less population with access to loans within 3 minutes at the POS.
  4. Veriti - US$12m - Tel Aviv, Israel - Cybersecurity
    Veriti’s solution provides always-on monitoring of security gaps in tech stacks.
  5. Vexev - US$8.5m - Sydney, Australia - Medtech
    Vexev has built a 3D modelling technology to map the vascular system, like an MRI and CT have done for other parts of the body.

A VC's Insight

The modern Egyptian empire

Alex Barrat writing to you today.

While Sub Saharan Africa tends to draw the spotlight, sitting between Africa and the Middle East is an emerging startup hub. Egypt is growing at historic rates, despite a cooler period in the funding market. With a unicorn and a dozens of centaurs ($100m+) on their books to date, Egyptian innovation is making a come back.

Here’s an overview on what’s going on in the country.

Discourse on African startups and innovation often focusses on the 1 billion people below the Sahara. Nigeria, South Africa and Kenya account for ~63% of all funding in the region.

But the fourth major African startup ecosystem sits in an almost entirely different sphere of the world. Primarily Arabic speaking, Egypt alone accounts for ~17% of venture funding on the continent in 2022. In fact, Egypt’s funding has increased by 70% in the first 10 months of 2022 compared to the same period in 2021, bucking a global trend in markets.

Source: CityGlobe Tour

We often refer to data, like the above, collated by Max Cuvellier at The Big Deal. Check out his blog on Substack

Already having minted their first unicorn (Fawry) and with 21 startups with over US$10m in funding, Egypt has moved past the emerging stages of a startup ecosystem and is starting to mature.

So, why Egypt? Sure, we can go through the usual macro indicators like a large population (100m), a leading education system (4 of top 10 African Universities) and a relatively large economy (2nd largest in Africa)…but there’s more to it.

What makes Egypt interesting is that it uniquely sits between two rapidly progressing innovation ecosystems. Yes it’s part of Africa but it’s just as much a part of the Middle East; the MENA region. Egyptian innovation can service the whole of MENA (Middle East, North Africa) and its 400m+ large population. A common language, set of regulations and culture uniquely position Egypt to serve a larger addressable market.

23% of MENA’s population lives in Egypt, and while it can’t compete with the wealth of countries like Saudi Arabia and the UAE, its size has allowed them to emerge as the region’s tech leader. Saudi Arabia and UAE tend to have some mega deals; a small number of highly valued companies but Egypt leads the region in deals funded, even if the average cheque size is lower than their Eastern neighbours.

The most recent data below from September’s MENA startup funding is largely consistent with the long term trend.

Now we have a little background into the why, let’s dive into what exactly is being built on the shores of the Nile; after-all, 93% of the country’s startups are based in Cairo.

As mentioned, Fawry is Egypt’s crown jewel; the lone Unicorn minted to date. A payments business established in 2008 that services over 35 million users, Fawry is now publicly listed on the Egyptian Exchange.

In more recent times, despite fintech leading the way in much of the world, e-commerce/retail tech is at the heart of Egypt’s startup ecosystem.

21% of all startups in Egypt operate in the e-commerce/retail tech space, according to Disrupt Africa. 3 of the top 4 most well funded Egyptian startups work in the space.

MaxAB leads the pack with US$101m raised to date. The company connects food suppliers with retailers. Just last month MaxAB announced their US$40m Series B; the 2nd largest deal in Africa in the last 6 months. Looking down the list, Capiter digitises inventory/store management for SMEs and Brimore is a social commerce platform.

We also continue to the fintech businesses that emerge in every developing economy receiving funding. Paymob facilitates B2B transactions, MoneyFellows is a lending/savings app. In almost every region I have looked, very local solutions emerge in the credit, savings, payments and banking space to bring largely unbanked populations online. Just this week Blnk raised US$12.5m to work in the lending space.

So, today’s piece was largely an information dump on an exciting, albeit under-covered part of the world - Egypt/MENA not only has a population larger than the USA but it's considerably wealthy too when compared to many developing regions. With 20+ centaurs ($100m+ vals) and a 70% year on year increase in funding, it’s a region that is already capitalising on its potential rather than an investment opportunity for tomorrow.


Splitting this tweet and the graphic into two for ease of viewing, Visual Capitalist has compiled the fastest growing cities in the world. It’s astounding that they can all fit within Sub Saharan Africa and Asia. 9 African countries and 3 Asian countries are represented in the top 20 list. As a side note, the world’s population ticked over 8 billion in the last 72 hours!

Macro lens

While Outliers has a clear emerging markets focus, the graph above pinpoints the increasing share of US tech talent coming from abroad. Most impressively, foreign workers provide a greater share of talent in a rapidly increasing pool of workers. In the last decade, a million new tech workers from places like India and Mexico have joined the US tech workforce.

In the past, we have considered the ‘Great Repatriation’. Lachlan Duffy penned his thoughts on the increasing trend of emerging markets founders honing their craft at US tech companies before returning home to found local companies; NuBank, Grab and Chipper Cash are examples of this.

Your authors this week

Alex Barrat - New to the VC world, joining the TEN13 deal team, Alex spent his early career at VC-funded scale up Stake. Fascinated by development economics. All pitches welcome. Submit your deck here.