Egyptian venture capital firm Sawari Ventures closed its $ 71 million fund for the rapidly growing startup ecosystem in North Africa.
The company first announced its fund in 2018, when it closed an initial $ 35 million then increased to $ 41 million) in hopes of closing at $ 70 million, by Menabytes. Investors in the first tranche included CDC (which disbursed more than $ 12 million), the European Investment Bank, Proparco and the Dutch Good Growth Fund..
After closing a Additional $ 30 million, the total increase of Sawari Ventures is $ 1 million more than its original target. And it added a range of new lenders which includes Misr Bank, Cairo Bank, Ekuity, Misr Insurance Group, National Bank of Egypt and Suez Canal Bank.
Ahmed El Alfi, Hany Al-Sonbaty and Wael Amin launched Sawari Ventures in 2010. Prior to venturing into the world of venture capital, El Alfi and Al-Sonbaty were investment professionals in the Egyptian tech space for more than two decades.. Amin, meanwhile, was the founder of a tech company called ITWorx which made notable acquisitions in the Egyptian tech ecosystem..
Besides Egypt, Sawari Ventures focuses on Morocco and Tunisia. For the company, these three countries represent one of the best investment opportunities at the moment given the mismatch between the available capital (amounts and variation at each stage) and the market opportunity.. They also share common traits such as language, culture, business, governance standards and market dynamics, which facilitate cross-border cooperation..
Since launching the company over 10 years ago, Sawari claims to have invested in more than 30 companies, mostly in Egypt.. Some of these companies include service SWVL, software startup Instabug, and chat-based personal assistant AI Elves, but its the hardware, education, healthcare, cleantech and fintech sectors are the strong points.
“We are trying to cast a wide net given that this is essentially a time of transformation in emerging market technology with the rapid digitization of the underlying economy,” said a spokesperson for the company at TechCrunch.. “So, as expected, we are seeing a significant flow in the digitization of financial services, healthcare and education technology.. Additionally, given engineering talent, there are unique opportunities in SaaS, Semiconductor, and IoT products.. “
Sawari Ventures invests in particular in companies in the growth phase. But it is also operates Flat6Labs, an accelerator-like seed venture capital firm that has Already used to make its seed investments since the creation of the Cairo and Tunis offices in 2011 and 2016.
Sawari says 10% of investments now closed will be be affected for companies in the start-up phase as investments via Flat6Labs Cairo and Tunis. Flat6Labs Cairo will seed between 80 and 100 companies and offer follow-up investments to between 30 and 40. Flat6Labs Tunisia will seed 60 to 70 businesses and offer follow-up investments for 30 to 40. The remaining 90% to be used invest in 20 to 25 growth-stage companies in Egypt, Tunisia and Morocco, with a median investment range of $ 2 to $ 3 million.
The investment line is a continuation of how Sawari typically remove checks for portfolio startups since the closing of the first tranche three years ago. The company said it has invested between $ 1 million and $ 4 million in Elves, Brantu, and Develop, Almentor, SWVL and MoneyFellows, among others.
“The Egypt-based fund is a private fund regulated by the Financial Regulatory Authority of Egypt (FRA), which has enabled us to attract capital from leading local financial institutions to co-invest with foreign capital from international development financial institutions, doubling our allocation to invest in high-growth Egyptian companies to $ 68 million, ”El Alfi said in a statement.
“Our goal is to create exceptional returns by investing in knowledge-driven companies, which have the potential to bring transformational changes to the Egyptian economy.. The fund will support local businesses with dedicated capital, more the quality expertise of our experienced and specialized team, and the added value of our investors. “