Last April, the venture capital firm in Egypt and the Middle East and North Africa region Algebra projects about its launch $90 million second fund. It was a sequel for the first time: investing $54 million in 21 startups across Egypt and the Middle East.
While Algebra Ventures expected it would reach its first close in the third quarter of 2021, the company had to wait a full year to make it happen. However, the delay allowed Algebra Ventures enough time to override what it had initially set aside for the fund. The company revealed in a statement that it has completed a first close of $100 million and expects to reach final closing by the end of the first quarter of 2023.
Since its inception in 2016, Algebra Ventures has supported the largest startups in Egypt in various industries. Include nouns like off, PrimorAnd the Trellaelmenus safeand Yodawy, Mozare3, and Shift EV.
In a previous interview, managing partners Tariq Asaad And the Karim Hussein He told TechCrunch that the company hopes to support 31 startups from the second fund, which is focused on setting up category B startups in the fintech, logistics, health technology, education technology and agricultural technology sectors. The company whose general partners include Laila Hassan And the Omar KhashabahIt will also cut checks ranging from $500,000 to $2 million from this second fund.
Partners say Algebra plans to invest $15 million by the end of this year; That is, during the first year of its operation. So far, it has supported four startups, including cylinder, the online used car retailer that raised the largest initial investment in Africa in May of $12.6 million. Also, wWhile Algebra Fund II will explore investment opportunities in East and West Africa, its primary focus remains on Egypt.
Our second fund will look for opportunities in various sectors by partnering with founders with high potential to address specific market gaps in these sectors. We haven’t made any investments in sub-Saharan Africa yet, but we continue to build relationships in these markets,” Hussain added via email about the company’s potential investments in neighboring markets.
Algebra Ventures is one of the few companies that has recently reached the first or final closing of large funds targeting the Middle East, including Other projects supported by ADQ And the Indoor Capital. It is also arguably Africa’s largest domestic fund and is listed alongside Partech Africa, TLcom Capital, Norrsken22 and Novastar Ventures as well-established funds investing in growth stage African companies. These funds were pivotal in increasing the investment capital that flowed into Africa’s technology ecosystem, Totaling more than $5 billion He minted a unicorn and a rhinoceros in the process. However, their financing activities have taken a little different shape This year due to macroeconomic trends affecting global investment capital. Like other companies globally, portfolio companies in Africa-focused funds have shown signs of struggle this year. In the case of Algebra, one example is Brimore, a social commerce start-up that announced a $25 million Series A, laid off hundreds of employees, saw its valuation drop dramatically (up to 40%, according to some sources) and is currently subject to restructuring.
Hussain commented, on how Algebra Ventures is helping portfolio companies weather this cash and valuation crisis. “We continue to support our companies with strategic advice, financing, operational matters and other matters as needed.”
Reaching Algebra Ventures to the first close at a size larger than its second intended fund is a massive achievement. Highlights a crucial vote of confidence from the company’s first fund investors, who have invested larger tickets in the second fund and commitments from new investors who share its vision on the potential of venture capital in Egypt and the region.
Large institutional investors, including financial development institutions such as FMO, BII and IFC, are backing Algebra Fund II – IFC and FMO made 15 million dollars And the 10 million dollars Obligations to the fund, respectively. Other limited partners include existing EBRD, EAEF, new investors MSMEDA, DGGF, and a few regional family offices.
“This is a testament to the potential of tech entrepreneurship in Egypt. Even in these turbulent times, there will be funding to support founders who are building transformational businesses. The upside is still very important and successful, companies with funding will be,” Hussein said of the company’s efforts to raise its second fund. The good is in a position to become a market leader, even in tough economic times.” It also highlights the importance of local funds, working closely with entrepreneurs on the ground. We are four partners, all Egyptian, all living in Cairo. We We have been investing for a long time, and we understand the local environment. We have seen startups succeed and some fail, and many regional and global investors believe we are their local partner in Egypt.”