It’s a good time to be raising money for venture capital investment in Egypt, especially if it is a first-time fund.
GIZ Egypt has launched a €100 million ($120 million) funding programme called “VC University”.
The initiative is a collaboration between GIZ, Germany’s international development agency, and the Egyptian Micro, Small and Medium Enterprises Development Agency (MSMEDA), Endure Capital and Changelabs.
GIZ has been working in Egypt since 1956. Through their Cairo office, GIZ works on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) to implement projects on behalf of other German ministries, the European Union and international organisations.
VC University will be a year-long programme. Giving cash away to first-time fund managers isn’t all there will be to it. Selected fund managers will receive mentorship and access to investors from across the world, Wamda reports.
The managers will receive technical assistance from MSMEDA.
Ali Saleh, who leads young enterprise finance at GIZ Egypt, says VC University will “educate early-stage fund managers on how they can raise capital or deal with challenges that might surface down the road.”
A direct benefit of increasing the number of active early-stage venture capitalists will be more investment into early-stage startups.
Egypt is gaining ground in terms of providing working capital to startups with two recent funds from Sawari and Algebra growing the financing train. But there is still room for more and $120million will go a long way to provide more liquidity in the North African ecosystem.
VC University will provide between €25-30 million to up to four fund managers. The funds can be based in Egypt or elsewhere in the MENA region, provided they invest in Egypt-based startups.
“There’s a lot of programmes out there that are aimed at startups, yet the VC funds are left behind. We have seen that there’s a gap there that needs to be filled,” said Saleh.