The Cairo-based VC firm Sawari Ventures has grand plans over the next four years, planning to invest close to US$70 million in fast-growing tech and tech-enabled companies in Egypt, Tunisia and Morocco.
That is according to Sawari Ventures partner Wael Amin, who said the company hopes to play a key role in advancing the knowledge economy and digital transformation of North Africa.
Disrupt Africa reported in December the firm announced the US$35 million first closing of its latest fund, but Sawari has been around the block and time or two already. Co-founded by Ahmed El Alfi and Hany ElSonbaty in 2010, it was one of the earliest private venture capital firms in the region, making a number of key investments and establishing Flat6Labs – the region’s largest early-stage accelerator and seed fund.
Amin, who joined the partnership in January 2015, founded ITWorx in 1994 and established it as one of the region’s largest technology companies, and is now lending his expertise to Sawari, which raised financing for its latest fund from a combination of major DFIs such as the European Investment Bank, CDC, Proparco and DGGF, as well as local financial institutions such as the National Bank of Egypt, Banque Misr and Banque du Caire.
Sawari targets companies operating in Egypt, Tunisia and Morocco, three countries where Amin said there is an abundance of talented entrepreneurs and a shortage of early-stage venture type equity financing.
“In this part of the world there are opportunities for digital transformation everywhere you look, but we are focusing on the use of technology in finance, education, healthcare, energy and logistics, which are the areas where we have existing expertise within our team and feel we can have the most impact,” he said.
“In the countries where we operate, startups primarily lack the capital required to take the risks needed to innovate, grow and become a worldwide market leader. We are hoping to help fill a portion of that gap.”
He said the region is becoming more attractive as an investment destination, both as it puts the turbulence of the Arab Spring behind it but also as governments see the value of strong local startup ecosystems.
“Policymakers in North Africa are starting to recognise that startups are going to be the main drivers of economic transformation in the 21st century, and that they will be responsible for the majority of net new job creation,” said Amin.
“Countries are still experimenting trying to find the best modalities of support for these types of companies, which have very different characteristics from the industry bellwethers that drove the economies of the 20th century.”