Africa’s Silicon Valley? Egypt is vying for first place in Africa’s startup ecosystem

It’s a Silicon Cape to Cairo, as Egypt’s rapidly growing startup population and ability to attract growth capital sees the north African country take its place in a north-south, east-west startup “axis.” Egypt’s arrival also introduces new competition to the more well-known startup ecosystems of Nigeria, South Africa, and Kenya.

Egypt has appeared out of nowhere as a key African startup funding destination, highlighting the prospects for continental growth of the nascent sector.

According to a new report on the North African startup scene, Egypt now rivals – and even surpasses – more established startup ecosystems such as South Africa, Nigeria, and Kenya in terms of entrepreneurial innovation and investment.

According to Disrupt Africa’s Egyptian Startup Ecosystem Report 2021, Egypt has not only rapidly increased the number of start-ups over the last five years, but it has also attracted investments large enough to produce unicorns.

“And with one “unicorn” in the shape of Fawry, soon to be two once Swvl lists publicly, Egypt is building up an impressive track record in the tech startup space,” says Disrupt Africa Co-Founders in the report.

More than 791 million dollars has been raised by 318 tech startups across 447 individual rounds since January 2015. Egypt has added 114 tech startups to its ecosystem each year, up from a meager 10 in 2015. As a result, the companies’ annual funding has increased significantly, from 8.6 million dollars in 2010 to 156 million dollars in 2020.

“Only Nigerian startups have received more investment so far in this bumper year,” the report quips.

In its Q3 2021 Africa Funding Report: Record Funding Trend Explodes, Digest Africa ranks Egypt (29), second only to Nigeria (46) among the top countries that benefited from the year’s ten largest funding rounds, in which startups raised 1.2 billion dollars.

While fintech dominates in Nigeria, South Africa, and Kenya, e-commerce and retail tech are driving Egypt’s race to the continent’s ecosystem summit, accounting for 20.8 percent of the market’s 562 active startups.

“By relegating fintech to a distant second in terms of startup activity, Egypt contrasts with its fellow continental startup leaders South Africa, Nigeria, and Kenya, where fintech is the most popular sector for entrepreneurial activity,” according to the Digest Africa report.

The African Tech Ecosystems of the Future 2021/22 report shows that the competition has only just begun as Egypt competes with better-known African startup ecosystems for more investment funds to target Africa’s growing economy and connected populace.

Morocco, Senegal, Ghana, and Uganda, according to the report, have also begun to attract more early-stage growth funding – as they compete for strategic positions in the expanding start-up market. The game is well and truly on, with more and more funding flowing into African startups.