When economic difficulties arise alongside a devalued currency regime, it has an inevitable knock-on effect on a country’s startup ecosystem.
There are three areas where this impact is seen most visible: (a) limiting access to funding, (b) limiting access to talent, and (c) challenges around maintaining revenues.
As the Egyptian Pound experienced a significant depreciation in Q4 2022, the ramifications for Egypt's startup scene were immediately evident. The number of deals signed witnessed a notable decrease. Such currency devaluation effectively halved the valuation of these startups overnight.
For startups incurring international costs, whether for supplies or manpower, their purchasing power diminished by 50%, simultaneously eroding the real value of incoming revenues to half of what they were worth in 2021.
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