The financial technology sector in Egypt has grown rapidly, beginning with the start of trading in the field of financial technology in Egypt 2021, which is affiliated with the Central Bank of Egypt last week.
The report conducted surveys and interviews with 112 fintech start-ups, set-ups, incubators and accelerators, with a focus on startups, emerging from major payment service providers. Today, details of these numbers and what they mean for the fintech scene in Egypt.
2021 was a good year for fintech startups, as total investments in the sector more than quadrupled to $159 million last year, up from $37.1 million in 2020. This represents more than fourfold growth in 2021. compared to 2020.
There has been a growth in the number of startups receiving funding, as 32 fintech startups made investments of more than $157 million last year, compared to $25 million in 2020.
Only three deals were signed by Egyptian fintech companies with a total value of $900,000 in 2017 (when the CBE launched a comprehensive campaign to promote financial inclusion). That is, the number of transactions increased by more than 10 times, while the total value of investment deals in financial technology companies increased by more than 140 times.
What sub-sectors have received the most funding? Over the past five years, B2B platforms have had the most signed agreements, followed by payments, transfers, salaries, benefits, and periodic savings and credit agreements, or digital “association.”
Fintech landscape by sub-sector
Of the 112 FinTech start-ups or Fintech-enabled companies in Egypt, 34 (or 30%) are in payments and remittances. Alternative lending and financing comes in second with 15 startups (13%), followed by personal finance and financial education, accounting and expense management, and wealth and salary and benefits management (8% each).
But there are some sub-sectors that require more attention. The report indicates the emergence of “a number of promising sub-sectors that are on the rise globally and that need to activate Egyptian cadres towards them,” such as automated dialogue services, digital investment platforms, supply chain digitization platforms, big data, artificial intelligence, and digital banking services.
The sector is still relatively young: almost half of the fintech companies (43%) operating in Egypt are looking to raise seed funding, while 32% are still in the pre-seed or self-funded stage. Only 14% of fintech companies are looking to raise seed funding, while 11% are seeking secondary funding rounds.
Companies are still concentrated in the capital: about 20% of start-ups have direct operations outside Cairo, and these companies focus on Lower Egypt (Qalyubia, Menoufia, Sharqia, Giza and Ismailia), followed by Upper Egypt (Minya), and then Hatra (Alexandria).
And some companies are looking to expand abroad: About 20% of startups have expanded regionally and internationally in the Gulf Cooperation Council, the Middle East and North Africa and Europe.
Most startups received funding during 2021: 44% of start-ups had two or more rounds of funding, while 40% of startups made one. About 16% of start-ups have not taken any funding rounds so far.