January 23, 2022 / 08:00 AM / by Disrupt Africa / Header Image
Credit: Disrupt Africa
The Egyptian Startup Ecosystem Report 2021 is primarily based on data extracted from a list of 562 Egyptian tech startups collated by the Disrupt Africa team. This list was built over a number of years from Disrupt Africa's own reporting on the African tech space, as well as additional research and information provided by third parties.
A note on the definition of a startup. In deciding what "startups" to include and exclude from this study, Disrupt Africa has followed its usual editorial process, working on a caseby-case basis to decide whether a company qualifies as a startup. The definition of startup is more subjective than objective in any region; especially so in Africa where the scene is so nascent and there are no established qualifications in terms of revenues and employee numbers.
Startups are young businesses where success is not guaranteed, where people choosing to work for the company are forgoing stability in exchange for innovation and the promise of tremendous growth. This ability to grow is key, what differentiates startups from small businesses is the potential - and desire - to scale regardless of geography.
More specifically, the majority of companies featured in this report are still in the process of scaling up, their potential profitability is still growing - regardless of whether profitability has to date been achieved -, and they may still seek external funding. Companies that are a spin-off or built by a corporate or other large entity are not included.
The definition of "Egyptian startup" is also subjective. In the clearest scenario, an Egyptian startup would be headquartered in Egypt, founded by an Egyptian, and have Egypt as its primary market. This, however, is not always the case. Some Egypt-based, Egypt-focused startups are founded by non-Egyptians. Many Egypt-focused, Egyptian-founded startups are, for regulatory and financial reasons, headquartered elsewhere. Some Egyptian-founded, Egypt-based startups target customers elsewhere in the world.
Once again, Disrupt Africa tackles this issue on a case-by-case basis, and we may not always get it right in everybodyâ€™s eyes. While many startups included in this report fit the criteria clearly, some do not, and in those cases we have applied thinking around the economic impact of a company - and where that impact is most felt - to decide whether or not that company should be included.
We do not claim to have identified every single Egyptian tech startup in existence in 2021 - there will be some that have slipped through the net. The data contained in this report is, nonetheless, what we believe to be the most comprehensive information available currently on startup activity in the Egyptian tech space.
Launch dates of startups, gender of founders, number of employees and whether or not that business has taken part in an accelerator programme have been ascertained via our own research and surveys of the companies in question.
Data on funding and acquisition comes from our separate annual report on funding for African tech startups, The African Tech Startups Funding Report, with some extra data added by third parties. Only equity and debt funding rounds are included, not grants.
A complete record of funding rounds is kept over the year, as they were disclosed publicly or confidentially to the Disrupt Africa team. Using that initial dataset as a base, we then poll hundreds of startups, investors, hubs and other ecosystem players to identify rounds that we may have missed, or to clarify the amount raised where this was not initially disclosed.
Where amounts were publicly disclosed, or startups have informed us they can be disclosed, they are declared. Where the figure was given in confidence, the number has been included in the aggregate total but not identified in the report.
Where we were unable to definitively ascertain the amount raised by a particular company, we have estimated the lowest possible figure based on the details we have managed to obtain. For example, if a startup indicated their funding was a "seven-figure dollar amount", we have estimated that figure as US$1,000,000. We have in general not included funding rounds below US$50,000 in value, or rounds referred to as "Friends and Family" investments.
In a few cases, we have used a combination of the investment parameters of the funder in question, previous rounds raised by the startup, and the size of rounds raised by similar companies in similar sectors, to come up with a minimum possible figure.
We again do not claim to have identified every funding round going to an Egyptian tech startup since 2015, as there will be some that took place quietly. As such, the overall total funding raised is likely to be higher than our totals; especially given our very conservative estimates of undisclosed rounds.
This report seeks to ascertain a minimum figure for funding for Egyptian tech startups between January 2015 and September 2021 as we continue to track the growth of the ecosystem.