The world's best start-up hubs: Cairo, Egypt

With a bustling population of 90 million, 50% of which are below the age of 30 and tech savvy, Egypt is suddenly staking a claim as one of the fastest growing entrepreneurial hubs in the world...

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  • Population: 7.8 million
  • Pros: A young, tech-minded population - the region is currently experiencing strong growth in mobile and web-based industries.
  • Cons: Funding for start-ups can still be hard to come by, along with high-levels of government bureaucracy.
  • Cost: On average, it costs about $1,500 to register and establish a company in Cairo.
  • What to expect: ​Plenty of young, hungry and talented workers to recruit for your start-up, as well as a rapidly changing tech industry.

For many Egypt’s best asset is its youth. With 40% internet penetration (growing at an exponential rate), massive e-commerce potential (expected to hit the $446.4 million mark by 2016), as well as a strategic geographic location, the country continues to prove to be an attractive investment environment. To gain a greater understanding of it's real potential we sat down with Omar Badr and Nour Ahmadein of Flat6Labs, a regional start-up accelerator programme based in Cairo.

What are best aspects of doing business in Cairo?

The best aspect of doing business in Cairo is the readily available pool of talented developers, techies, and aspiring entrepreneurs who are hungry for work, with massive opportunity to penetrate already-existing markets and create new ones. With a staggering 90M+ population, Egypt’s internet economy looks very promising. With a current internet penetration rate of 40% (growing exponentially), an astonishing 103M mobile phone users/clients, and about 10% of the population holding bank accounts, the future for mobile and web commerce looks very bright with a positioned growth rate of 35% within the coming two years.  

What are the downsides to doing business in Cairo?

Although this is improving drastically, an initial downside to conducting business in Egypt resides in governmental bureaucracy (i.e - obtaining permits) and lack of access to funding for start-ups. Egypt, along with much of the MENA region lacks significant players that aim to provide funding that is halfway between seed-funding (100k-200k) and the Series A VC's (1M+).

How would you describe the business culture in Cairo?

The business culture in Cairo is extremely forward-moving with great opportunity for new companies/players to arise, due to lack of strong competition and the country's recent history of monopolized industries which is quickly changing due to new technologies and a new government. 

What are the costs of doing business in Cairo?

On average, it costs about $1,500 to register and establish a company in Egypt. You can read more about that here.

What tips would you give to an entrepreneur thinking of starting-up in Cairo?

That's easy, make sure you pay attention to these three: patience, perseverance, and marketing.

Can you tell us a little more about what start-ups new to the region can expect to find?

Of course. "A business that makes nothing but money is a poor business,” Henry Ford once said. For a region budding with hopeful young entrepreneurs, many in Egypt turn to innovative and most importantly socially and environmentally conscious ways to lead the way with their businesses.

Starting your own business can be a bumpy ride, an experience myriad with recurrent uncertainty, fear and maybe a little bit of luck as well. Although the entrepreneurship ecosystem might not be fully developed in Egypt, the level of innovation and the level of growth are unquestionably at an all-time high. With Egyptian born start-ups like Instabug – a bug reporting app - who fought their way through a sea of challenges to make it to Silicon Valley, raised a fund, and built a sound reputation in the developers market, it’s evident that more and more start-ups from Egypt aim to follow suit and penetrate the global and regional tech scene, but It’s not all about tech start-ups only.

A new wave of entrepreneurs are emerging that are geared towards tackling prominent social and environmental issues in Egypt, and are doing so with a self-appointed passion for entrepreneurship coupled with an affectionate sense of responsibility towards the region. Accelerated by Flat6Labs, a regional start-up accelerator based in Cairo, Reform Studio is an Egyptian based start-up that is taking used plastic bags and instead of recycling them, are ‘upcycling’ or converting this waste into everyday functional materials and products. 

By collecting a large amount of plastic bags to transform them into their specially designed and weaved materials, they were able to design award-winning furniture that received global recognition in several international exhibitions. “We’re increasing the usage lifespan of these plastic bags by transforming them into something you actually use everyday” said Mariam Hazem CEO of Reform Studio while pitching her idea to the guests at one of the infamous weekly dinners hosted at Flat6Labs.

Launched in 2012, Nafham (which means “we understand” in Arabic) is an educational platform that aims to make up for the shortfalls in regions current educational systems by offering free online classes via crowdsourced videos currently covering the Egyptian curricula, and already 40% of Saudi Arabia’s, and 30% of Syria’s curriculum. 

Their website now boasts more than 3.6 million total video views, 200 thousand unique visitors, two million page views per month and 70% growth rate, Nafham is undoubtedly positioning itself as a the leading educational video platform in the MENA region. It’s worth noting that all the content is free of charge, making the platform an invaluable tool for students.

The idea of socially responsible start-ups could be good for business given you have a solid revenue model, in the sense that consumers would feel more comfortable using their services or buying their products. For now, more and more socially and environmentally-focused start-ups continue to be on the rise in the entrepreneurial scene across the region, but what is truly needed to compliment this organic growth are the mechanisms and resources made readily available to these start-ups to thrive and realize their full potential. For active start-up accelerators in the Middle East like Flat6Labs, that’s exactly what they’re trying to achieve by creating a platform for individuals solving everyday problems, and turning these solutions into fully-fledged commercial businesses. 

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