- Papama Nyati
Algebra Ventures secures its second fund of $90 million to finance Egyptian startups
Algebra Ventures is the leading technology VC firm in Egypt. Their recent fund raise of $90 million will allow it to double down on investments in their home market, whilst expanding into the rest of the MEA region.
In 2020, VC deals in Egypt amounted to $269M across 86 deals - that's the highest deal count for an African market in 2020, according to Partech findings. It is a testament to the growing investment appetite among local VCs in Egypt that Algebra’s $90M fundraise comes just a day after another Egyptian VC firm, Sawari Ventures secured $63.8M investment funding.
Algebra’s cumulative fund is set to reach a total of $144M, after it first closed a $54M fund in 2016. The VC firm has now positioned itself to manage one of the largest indigenous funds in the Middle East and North Africa (MENA) region. In their first fund, Tarek Assaad, Managing Partner at Algebra Ventures, admits that LPs such as EAEF, EBRD and IFC took a bet on Algebra back when there was no venture capital to speak of in Egypt. The evolution of the tech space in Egypt has even astounded the partners at Algebra. Tarek Assad states the Egyptian VC is more bullish than ever in the potential of the growth of the tech ecosystem, "Growth rates, capital deployed, sophistication of investors, track record of entrepreneurs are all pointing to unparalleled growth moving forward," he says.
Four years into its first $54M fund, Algebra has invested in 21 startups, including Trella, elmenus, GoodsMart, and Halan. Algebra Ventures’ portfolio of Series A investments, the largest in Egypt, is achieving remarkable traction. Collectively creating over 20,000 direct and indirect jobs, Algebra’s six most established companies are valued at over $350M and collectively generate more than $150M in annual revenue.
Though Algebra is primarily focused on Series A and Series B rounds in Egypt, they do not exclude investments in earlier-stage startups. Speaking on the the firm’s latest fundraise, Managing Partner at Algebra Ventures, Karim Hussein said: “One of the lessons learned in our first fund is that we see that there are more interesting opportunities and great entrepreneurs in the seed stage. And given that we’re more on the ground in Egypt, sometimes we wait for them to mature to Series A. But going forward, we might need to build relationships with those we find exceptional at the seed level and also expand our participation on the Series B level.”
Grounded in its continued belief in Egyptian tech entrepreneurs, Algebra Ventures is doubling down on its home market, while still opportunistically investing in the rest of the MEA region. The VC will continue to support founders who are transforming industries and addressing long-standing problems that only technology can provide solutions for. Algebra Ventures’ new fund will pursue opportunities in fintech, agritech, edtech, logistics and healthcare by partnering with high-potential founders to address specific market gaps in these sectors. Furthermore, Algebra will continue to pursue co-investments with some of the strongest local, regional and international venture investors who have been instrumental to its success.
Venture capital activity in Africa has been largely dominated by foreign entities, however VSs such as Algebra show that local investors are capable of raising nine-figure funds - an important distinction as locals investors better understand local ground situations, which in itself works in the benefit of tech entrepreneurs looking provide innovative solutions.