Egypt's Micro, Small, and Medium Enterprise Development Agency (MSMEDA) has recently announced a $7.5 million investment across three regional venture
Egypt’s Micro, Small, and Medium Enterprise Development Agency (MSMEDA) has recently announced a $7.5 million investment across three regional venture capital funds, underscoring its commitment to fostering entrepreneurship and supporting startups. This initiative aligns with Egypt’s Vision 2030 strategy, which emphasizes economic diversification and innovation.
In a recent move, MSMEDA invested $2 million in the P1 Ventures Fund to support high-potential startups across various sectors. While the fund primarily focuses on Egypt, it also targets startups capable of competing in African markets. Basil Rahmi, CEO of MSMEDA, highlighted the importance of tapping into Africa’s growth potential to create opportunities for Egypt’s youth, thereby enhancing market competitiveness and regional integration.
Earlier, MSMEDA committed $3 million to the Foundation Ventures Fund as part of a larger investment program launched in collaboration with the World Bank. This initiative represents Egypt’s first “Fund of Funds” (FoF) program, financing local, regional, and international venture capital funds to support early-stage Egyptian startups within a competitive and diverse ecosystem.
Vision 2030 framework
In November 2024, MSMEDA formalized a $2.5 million investment in the Capital Ventures Development Fund 2 (Tanmia Capital Ventures 2). This move reflects the agency’s strategy to attract foreign capital and offer varied financing solutions for startups, underscoring the government’s commitment to driving economic growth and diversification under the Vision 2030 framework.
Collectively, these investments signify significant strides in creating a robust and competitive startup ecosystem in Egypt, aimed at stimulating innovation, job creation, and regional economic integration. The “Fund of Funds” initiative seeks to secure up to $1 billion to transform Egypt’s venture capital ecosystem by attracting international investment. During the program’s pilot phase in 2022, $50 million was deployed, funded by the World Bank, and distributed across approximately 15 venture capital funds, with MSMEDA contributing 10% to 20% of their capital.
Amr Al-Abd, Advisor to the Prime Minister for Entrepreneurship, emphasized the program’s strategic role in strengthening Egypt’s startup ecosystem and extending its influence into African and Arab markets, stating, “The Fund of Funds is the main driver of this strategy.”
The FoF model reduces risk and diversifies investments by channeling funds into multiple venture capital firms rather than directly investing in startups. This approach has already yielded notable success. For instance, Endure Capital, a beneficiary of the program, closed its $50 million Africa-focused fund in 2022. Founded by Tarek Fahim, Endure Capital has backed prominent startups such as Careem, MaxAB, and Breadfast, highlighting the potential of the Fund of Funds initiative to accelerate startup growth and regional expansion.
Hani Emad, head of MSMEDA’s Central Sector for Venture Capital Investments, underscored the transformative impact of the Fund of Funds initiative, stating, “Our focus is to empower small projects operating in Egypt and enable their expansion into regional markets.” The program’s diversified portfolio, spanning sectors including logistics and fintech, reflects its ambitious vision to foster innovation and entrepreneurship.
With Egypt’s youthful demographic and growing startup ecosystem, the initiative seeks to position venture capital as a key pillar of the country’s economic diversification efforts. The Fund of Funds aims to bridge Egypt’s venture capital gap while attracting international investors. Moreover, Egypt’s strategic location as a gateway to African and Middle Eastern markets presents an attractive opportunity for global investment, reinforcing the country’s role as a regional hub for innovation and economic growth.