The $90 million second fund was announced in April of last year. It was the sequel to a fund that invested in 21 startup in Egypt and the Middle East.
It took the firm an entire year to reach its first close. The lag gave the fund enough time to surpass what it was originally earmarked for. The firm said in a statement that it has finalized a $100 million first close and expects to reach its final close by the end of the first quarter of next year.
Egypt's top startups have been backed by the company since it was founded. They include names such as Halan, Brimore and Trella.
The firm hopes to back 31 startup from the second fund, which focuses on seed to Series B, according to a previous interview. The firm, whose general partners include Laila Hassan, will be cutting checks from this second fund.
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The partners say that by the end of the year, they will have invested fifteen million dollars in the business. Sylndr, the online used-car retailer which raised the largest pre-seed investment in Africa this May, is one of the companies it has supported. The primary focus of the second fund will remain Egypt.
The second fund will partner with high-potential founders to address market gaps in certain sectors. Hussein said in an email that the company hasn't made any investments in sub-Saharan Africa yet.
There are a few firms that have recently reached the first or final close of large funds targeting the Middle East. It is one of the largest indigenous funds in Africa, as well as being one of the well-established funds investing in African growth stage companies. The funds were key to the increase in venture capital that flowed into Africa, totaling more than $5 billion. Due to macroeconomic trends affecting global venture capital, their funding activities have changed slightly this year. Portfolio companies in Africa-focused funds are showing signs of struggle. Brimore, the social commerce startup that announced a $25 million Series A, laid off hundreds of employees and is currently undergoing restructuring, is an example.
Hussein commented, "We have seen ups and downs before and have been working closely with our portfolio companies to make sure they have a solid financial position in this new environment." As the need arises, we continue to provide strategic advice, funding, operational issues and other matters.
It is a feat to reach the first close of a larger fund. The vote of confidence from the firm's first fund investors, who have invested larger tickets in the second fund and commitments from new investors who share its vision for the potential of VC in Egypt and the region is highlighted.
The DFIs made commitments of $10 million and $15 million to the second fund. Existing participants and new investors are some of the limited partners.
This shows the potential of technology in Egypt. Funding will be available to back founders who are building companies. Hussein said that well-funded companies will be in a position to become market leaders even in challenging economic times. Local funds are important and work closely with entrepreneurs on the ground. We are four partners, all Egyptians, and we have been investing for a long time. Many regional and global investors think of us as their local partner in Egypt.
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