Egyptian accelerator Falak Startups has announced its plan to invest EGP 30 million in technology startups over the next 18 months. This initiative follows a highly active period for the firm, which successfully funded 70 startups between the last quarter of 2021 and the first quarter of 2022 across sectors including EdTech, HealthTech, FinTech, and fashion.
A Strategic Shift To Larger Investments
Ahmed Hazem, CEO of Falak Startups, revealed that the new capital will be allocated to both new ventures and follow-on investments in existing portfolio companies. A key part of this strategy is a significant increase in the individual ticket size, which has been raised from a range of EGP 500,000 to EGP 1 million to a new standard of EGP 2 million per startup. Hazem noted that this change reflects the growing capital needs of early-stage companies in the current market.
The accelerator will also utilize the Convertible Note model, an approach also used by government bodies like Egypt’s Information Technology Industry Development Agency (ITIDA). This model allows Falak to invest in promising startups that are not yet ready for a formal valuation, providing capital as a short-term debt that later converts into equity.
Cultivating A Robust Investor Network
A central pillar of Falak’s strategy is to attract a greater number of investors to the startup ecosystem. The accelerator is developing qualification programs designed to help new investors understand the dynamics of venture capital. Hazem emphasized that while investing in startups is a high-risk endeavor, the potential for significant returns from a few successful companies can offset losses from others in a diversified portfolio.
To facilitate this, Falak Startups actively co-invests and organizes funding rounds with other prominent VCs and angel networks, including 500 Global, Alex Angels, and Cairo Angels. The firm focuses on startups with strong founding teams, innovative solutions that address market gaps, and profitable business models.
Expanding Regional Footprint
Falak Startups is actively looking beyond the Egyptian market. Hazem confirmed that the firm has already funded two UAE-based companies: a hospitality startup that received EGP 1 million and Hayi, a community management platform, which secured EGP 2 million.
Additionally, the accelerator is in advanced negotiations to fund a Saudi startup, with a deal expected to close in the second half of this year. Falak also supports its Egyptian portfolio companies in their expansion efforts into the Saudi market, citing similarities in consumer culture and behavior.
Portfolio Highlights and Sector Focus
The accelerator has backed a diverse range of innovative companies. Key portfolio startups include EdTech platforms Educatly and E-youth, FinTech and InsurTech solutions like Raseedi and Amanleek, and logistics provider Rabbit Scooters. The firm remains bullish on sectors that have seen accelerated growth due to recent global events, noting how the COVID-19 pandemic spurred innovation in remote services and digital payments.
About Falak Startups
Founded in 2018, Falak Startups is an Egyptian accelerator dedicated to empowering new generations of local entrepreneurs and contributing to the development of the country’s vibrant startup ecosystem. It provides funding, mentorship, and strategic support to help early-stage companies scale and succeed.
Source: Al Mal News
