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Number of Venture Deals by Quarter in Egypt, UAE and KSA as Egyptian Currency Tumbles
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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Investing in Egypt’s Startup Ecosystem
Micro, Small and Medium Enterprises contribute over 40% to Egypt’s economy, and account for over 75% of the country’s total employment. Entrepreneurship is critical to Egypt’s future. Today, Egypt consistently ranks as a top 3 tech startup ecosystem in both the MENA and Africa regions, based on funds raised by local startups. In this special report, we speak to the most active investors in Egypt and cover some of the country’s most successful startups to give you an inside scoop on how they are navigating the current VC winter, inflationary pressures and currency devaluation woes.
