Egypt’s startup ecosystem is set to receive a significant capital injection of $135 million from the World Bank and the African Development Bank (AfDB). This new funding is part of the second phase of a comprehensive program designed to support the nation’s venture capital sector and emerging startups, managed by the Micro, Small, and Medium Enterprises Development Agency (MSMEDA).
According to a high-level government official, the financing will be allocated with $120 million from the World Bank Group and $15 million from the AfDB.
Phase II of Venture Capital Support
This initiative builds upon the success of the program’s first phase, which launched in 2021 with $50 million in funding from the World Bank Group. The primary objective of the program is to strengthen Egypt’s entrepreneurial landscape by investing directly into the capital of VC funds and providing crucial support to promising early-stage startups.
The second phase aims to expand the investment scope, increase funding opportunities for SMEs, and align Egypt’s innovation ecosystem with global best practices.
A Fund of Funds Model to Maximize Impact
The new capital will be deployed using a “Fund of Funds” (FoF) model, strategically investing in established and emerging venture capital funds operating in Egypt. This approach is designed to amplify the program’s impact by attracting an estimated $400 to $500 million in parallel co-investments from other financial institutions.
This structure not only multiplies the available capital for startups but also strengthens the overall investment environment by bringing in more private and institutional players.
Strategic Goals for a Growing Ecosystem
The program is expected to play a critical role in the continued development of Egypt’s tech scene. Key objectives include increasing the total volume of venture capital available to startups, stimulating the creation of new jobs, and fostering technological innovation.
Furthermore, the initiative aims to encourage greater participation from both the private sector and international investors, enhancing the capacity of Egyptian startups to scale their operations locally and expand into regional markets. This effort is a key component of the Egyptian government’s broader strategy to create a more favorable environment for SMEs and innovative enterprises that contribute to the national economy.
About The Micro, Small, and Medium Enterprises Development Agency (MSMEDA)
The Micro, Small, and Medium Enterprises Development Agency (MSMEDA) is the primary governmental body in Egypt responsible for formulating and implementing national programs, policies, and regulations for the promotion and development of MSMEs. It aims to foster a supportive ecosystem for entrepreneurs and small businesses to drive economic growth and job creation.
Source: eltaameer
