PM — Tiffany x Nike falls flat?

Good afternoon, wonderful people, and a very happy hump day to you all. We have another brisk news day here in Omm El Donia to mark the mid-point of the week — and the last day of January.

THE BIG STORY TODAY

IDH scraps IDC acquisition bid: LSE- and EGX-listed consumer healthcare firm IDH has pulled the plug on negotiations to acquire a majority stake in the Islamabad Diagnostic Center (IDC), IDH said in a disclosure to the EGX (pdf). The negotiations between IDH and IDC ultimately fell through due to “extensive delays in the regulatory review process, the challenging global economic environment and the condition precedent related to repatriating funds,” IDH said in a disclosure to the LSE. IDH had signed a share purchase agreement in December 2021 that would have seen it acquire 50% of the Pakistani diagnostic provider for USD 72.35 mn.

THE BIG STORY ABROAD

The eurozone recorded higher-than-expected growth in 2022, buoyed by positive growth in 4Q 2022, despite analyst forecasts that the bloc would record negative GDP figures during the final three months of last year. Across the full year, the eurozone’s GDP grew at a 3.5% clip, outpacing the US and China. The story is broadly leading the conversation in the international business press this afternoon: CNBC | Financial Times | Reuters | Wall Street Journal

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

• A unit of Qatar’s sovereign wealth fund is eyeing majority stakes in two state-owned terminal operators as investment bankers angle for IPO mandates in what could be the first sign so far this year of significant new activity in the Madbouly government’s privatization program.
• Blinken talks Egypt-US partnership, Israel-Palestine conflict with El Sisi, Shoukry: US Secretary of State Antony Blinken held talks with President Abdel Fattah El Sisi and Foreign Minister Sameh Shoukry yesterday before heading to Israel for the final leg of a three-day Middle East tour.
• Transport Minister defends spending record at the House: Transport Minister Kamel El Wazir defended his ministry’s spending on trains and rail infrastructure at the House yesterday, responding to wide-ranging questions from MPs.

** TAKE OUR JANUARY ENTERPRISE READER SURVEY and get a chance to have lunch with us: Give us your thoughts on how 2022 panned out for your business and industry, and what you’re expecting in the year ahead in our Enterprise Reader Survey.

We’re asking you to share your expectations on the EGP / USD rate in 2023, how you’re managing expenses amid the rising cost of living, where you see your industry as a whole heading, and whether you expect to make fresh investments — among a few other questions we ask our community on a regular basis. As is our custom, we’ll be sharing the results with all of you in a few weeks’ time to help you shape your view of the year.

You can take the Reader Survey here — it won’t take more than a few minutes to complete.

Want to have lunch with us? Leave your name, email, mobile number, and where you work in the box for “Is there anything else you want to tell us.” We’ll be inviting eight participating readers to breakfast at one of our favorite restaurants.

COME TO OUR NEXT ENTERPRISE FORUM-

We’re excited to unveil our next C-level event: The Enterprise FDI + Exports Forum, where we will take a deep dive into two of the most critical topics affecting our community.

Exports and foreign direct investment (FDI) have never been more important to our economy — or our businesses — than in the wake of the float of the EGP. We think we have a once-in-a-lifetime chance to build an export-led economy that makes us a magnet for FDI and all the benefits that will come with it for our nation.

Want to join the conversation? Drop us a line on events@enterprisemea.com.

???? CIRCLE YOUR CALENDAR-

It’s interest rate week here at home… The Central Bank of Egypt (CBE) is likely to hike interest rates when it meets on Thursday as inflation continues to run high, according to our interest rate poll.

We’re still waiting to hear what’s happening with fuel prices this quarter: The government’s fuel pricing committee was due to meet earlier this month to set fuel prices for 1Q 2023. The government has increased prices at the pump by 23-28% since April 2021, and decided on a rare fuel oil price hike last July.

Expect prices to rise: The government has committed to changing local fuel prices in line with movements in the global markets under the USD 3 bn loan agreement with the IMF.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

????️ TOMORROW’S WEATHER- Expect a mainly sunny day tomorrow with temperatures in Cairo expected to hit 18°C during the day before falling to 9°C at night, our favorite weather app tells us.

Tiffany and Nike collaborated on a new shoe release — but sneakerheads aren’t loving it: The internet lost its collective mind over the weekend when luxury jewelry brand Tiffany & Co and athletic wear giant Nike announced they’re joining forces to create a collaboration sneaker, dubbed the Nike Air Force 1 Low Tiffany & Co “1837.” But unofficial leaked images on social media have not been well received by sneaker collectors, who argue that it isn’t as impressive as they had hoped for from such a high-profile collaboration. The disappointment is compounded by the shoes’ price tag: The limited release will come with an eye-popping price tag of USD 400 (or a rather painful EGP 12k) — at least double what you’d expect to pay for a regular Air Force 1, according to Insider.

This partnership comes as Tiffany strives to modernize its image and appeal to a younger clientele. Since LVMH’s 2021 purchase of Tiffany, the company has participated in a number of partnerships, including one with Beyoncé and Jay-Z. LVMH owner Bernard Arnault has recently overtaken tech tycoon Elon Musk as the richest man in the world.

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African startups are bucking the trend and continuing to raise funds: African startups continued to grow and secure VC funding despite global pessimism and caution from investors, raising more funding by volume and value in 2022 than in 2021, according to TechCrunch. African startups raised some USD 4.8-5.4 bn from 975 transactions in 2022, data estimates suggest, compared to USD 5.2 bn from 790 transactions in 2021. “Despite the challenges that emerged in the second half of the year, 2022 was another year of growth for Africa … This is particularly noteworthy, as every other region experienced a double-digit drop in funding activity during the same period,” African data tracker The Big Deal co-founder Max Cuvellier told TechCrunch.

Where did the money go? Companies in Africa’s big four — Nigeria, Kenya, Egypt and South Africa — brought in 75% of the funding secured. Fintech companies continued to account for the largest chunk of funding, with around 38% of the funding secured by African startups last year. That number is a significant drop from the 62% recorded in 2021. Other notable sectors drawing in funds include cleantech, logistics, and mobility. The Enterprise Startup Tracker counted 94 investments in Egyptian startups worth USD 507 mn in 2022.

Dubai’s Orfali Bros. Bistro crowned MENA’s best restaurant in 2023 from the World’s Best 50: The homegrown eatery was founded by three Syrian brothers, and represents “the new Dubai cuisine,” according to co-founder Mohammed Orfali, Bloomberg reports. Dubai bagged 15 spots on the list, including top six of the top 10, giving it the highest number of eateries on the list for the second consecutive year. Tel Aviv follows with six restaurants on the list, and Amman with five. There are a substantial number of Asian and other non-Middle Eastern eateries featured on the list, which is something many chefs expressed that they would like to see change. There is little overlap between the restaurants that are awarded Michelin stars and those that make the 50 Best lists, which tend to be more progressive.

Four Egyptian restaurants made the cut: A round of applause for our friends at Zooba who came in ninth place, consolidating its success as a homegrown brand that began in Zamalek a decade ago and now has multiple branches in Egypt and abroad. Restaurateur Ayman Baki’s Japanese restaurant and bar Kazoku came in 12th place, while his flagship restaurant Sachi came in 30th. Japanese restaurant Reif Kushiyaki, the first franchise of the Dubai-born Japanese street food eatery, came in 45th place only a year after it opened in Egypt in December 2021.

The top 10: Orfali Bros Bistro (Dubai), Trèsind Studio (Dubai), Fusions by Tala (Manama), Ossiano (Dubai) , 3 Fils (Dubai), George & John (Tel Aviv), Kinoya (Dubai), Fakhreldin, (Amman), Zooba in Zamalek (Cairo) and Moonrise (Dubai).

???? ON THE TUBE TONIGHT-
(all times CLT)

You People strikes a cord with culture-clash comedy: The recently released Netflix American rom-com — starring Jonah Hill, Eddie Murphy, Lauren London, Julia Louis-Dreyfus, and Nia Long — follows modern love through a newly introduced couple who come together bearing different cultural backgrounds and religious beliefs. Ezra, a Jewish-American, and Amira Mohammed, who is of Muslim-African descent, are trying to navigate the clash of cultures as their families meet up, bombarding each other with inappropriate questions that shed light on the existing bias and misperceptions of society.

⚽ The most important matches in the Carabao Cup and Serie A: Newcastle faces Southampton in the semi-final second leg tonight at 10pm, while Inter Milan plays Atalanta in the quarter finals at the same time.

???? OUT AND ABOUT-
(all times CLT)

The Elite comedians are once again taking over the stage at Cairo Jazz Club 610 tonight at 9pm.

Walad & Mahib are mixing some of the best electronic music, with Egyptian beats twist tonight at Room Art Space New Cairo at 9pm.

Another Mazaher ensemble (Zar) is taking place tomorrow at the Egyptian Center for Culture and Arts at 8pm.

Sweden-based Tarabband is playing “Tarab” beats at Cairo Jazz Club in Agouza on Thursday at 9pm.

Wala Fel Ahlam, a rom-com 60’s musical performance is running this Thursday, 2 February, through next Sunday, 5 February, at Kasr El Nile in downtown.

Cairo Show Theater at Movenpick Hotel is hosting Sidaty ElGamila, a one-day play, starring Ahmed El Sakka this Thursday, 2 February, at 9:30pm.

The Pyramids Sound and Light Show is opening its gates from tomorrow and until Sunday, 4 February, opening up a portal to ancient times. The show will run three times a day, in Arabic, English, and Spanish.

Head to Rawabet Art Space this Saturday, hosting Comedy Sett, at 8pm.

???? UNDER THE LAMPLIGHT-

The Power of Agency: The 7 Principles to Conquer Obstacles, Make Effective Decisions, and Create a Life on Your Own Terms. Written by renowned psychology experts Paul Napper and Anthony Rao, the book tackles science-backed concepts that set a roadmap for how to live your life “on your own terms.” Napper and Rao provide constructive, actionable instructions on how to effectively reflect and benefit from social learning, as well as manage conflicting emotions such as anxiety, and exhausting everyday demands.

MARKET WATCH-

Sidi Kerir Petrochemicals’ net income after tax rose to EGP 1.24 bn in 2022, up 131% y-o-y, according to its earnings release (pdf). The company’s revenues jumped 69% y-o-y to EGP 8.66 bn.

Obour Land is paying out EGP 380 mn of dividends at EGP 0.95 per share, the company said in an EGX disclosure (pdf). The company’s board of directors has approved the dividend distribution, which still requires sign-off from its ordinary general assembly. The cheesemaker’s net earnings stood at EGP 462.7 mn in 2022, rising 32% y-o-y.

MARKET ROUNDUP-

The EGX30 fell 3.4% at today’s close on turnover of EGP 1.97 bn (11.5% above the 90-day average). Local investors were net buyers. The index is up 12.7% YTD.

In the green: Telecom Egypt (+5.4%), AMOC (+1.0%) and Eastern Company (+0.9%).

In the red: Alexandria Containers and Cargo Handling (-7.9%), Credit Agricole Egypt (-7.3%) and Housing and Development Bank (-6.2%).

OUR FOUNDER OF THE WEEK– Every Tuesday, Founder of the Week looks at how a successful member of Egypt’s startup community got their big break, asks about their experiences running a business, and gets their advice for budding entrepreneurs. Speaking to us this week is Omar ElDessouky (LinkedIn), co-founder and CEO of property co-ownership startup Seqoon.

My name is Omar ElDessouky, and I’m the co-founder of Seqoon. I graduated from AUC last summer with a bachelor’s degree in civil engineering. I started working on Seqoon with my co-founder Mohamed El Khatib. He was finishing up his master’s degree in Cambridge at the time, and I was still in my last year of university.

We first had the idea for Seqoon while we were at the North Coast, looking at housing prices. We discovered that there is a gap in the market for Gen Z, millennials, and others who want to buy a second home for investment or use, but there is a financial barrier. So we began researching our concept, which is co-owning a property for use and investment, and whether similar models existed. We found Pacaso in the US, which sparked a global prop-tech revolution, and were eager to see if the same model would solve the problem in Egypt.

We created a quick website on Wix to test out the market. We were overwhelmed by the number of people who accessed the site, and this helped us to collect data about the nature of our customers, their average budget, and we further built on the concept from there. Now, we handle the scheduling, the usage, and we also help out if an owner wants to sell their shares.

I grew up working with and learning from my father, who owns a construction company. I didn’t have the fear of starting a business because I had already experienced its inner workings. Therefore, my partner and I were looking for a challenge. We wanted to address the most pressing issue in Egypt’s largest market, which is real estate and affordability. We knew that starting a company at this age would be difficult, in terms of attracting high-caliber and convincing investors — but this challenge motivated us even more.

The best part of my job is coming into the office every day and working with the great team that we’ve built. We have a lot of interesting people on the team, so it’s always a pleasure to interact with them. The most difficult aspect of my job is dealing with the day-to-day logistics of running a business, such as accounting and paperwork. It isn’t enjoyable for anyone, but it’s something that has to be done.

The three most important KPIs that we look at on a regular basis include the burn rate. It’s the most important metric right now, and I believe that many startups are looking at it as well since the economic situation is unstable. Moreover, we look at the number of house shares we sell per month, the number of houses we have, how quickly we can finish up an entire house, and the number of shares multiplied by the number of houses, as well as the lead conversion rate.

Seqoon has raised USD 500k in a pre-seed funding round. We also have some angel investors, including Scott Bond (LinkedIn), who is the vice president and country manager of Property Finder in the UAE.

Right now, we’re keeping our heads down and concentrating on gaining as much traction as possible before approaching investors for another round. However, we are looking for opportunities across MENA. We now have a presence in Gouna, Soma Bay, and Sokhna, and we’re looking to expand to the North Coast, after which we’ll raise again and enter the Gulf.

If I could give someone starting their own business just one piece of advice, it would be to find a great mentor — someone who already has a skill in the game and can help you learn a lot. I usually consult my father whenever I need to fix a difficult problem. He founded his construction company at the age of 23 and now it is one of Egypt’s largest contractors. I’m very proud of his accomplishments, and he is unquestionably the person to confide in.

Being founder of a startup could be a lonely journey, but it helps to have co-founders. When you start a business, you are constantly under pressure, and even if you have a great team, they will not be dealing with the same issues, so the co-founders are the only people who can balance this pressure together.

I turn to books for inspiration. I like to read a lot. It’s extremely helpful and I see it as a spiritual and mindful time off. A lot of what I read is about startups, as well as self-help books. The last great thing I read is The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone. I also recently watched The Godfather again which is my all-time favorite movie, and I listen to all of Y Combinator’s podcasts.

I don’t have a lot of spare time, but when I do, I spend it playing chess. I have a chess obsession. I was actually just playing right before the interview [laughs].

If I had to exit my business tomorrow, I would do it through an IPO, and I would definitely stay on as an employee.

My family was initially skeptical of my career choice. They couldn’t understand why I would want to branch out on my own when we have a stable family business. But as we grew Seqoon into a company and demonstrated that we knew what we were doing, that quickly changed and they now show a lot of support.

I believe that Flexstock and Khazna are two startups that are killing it. Anything in the logistics industry at the moment is very helpful for the country.

I’d like to see a lot more younger founders in the local start up scene. It is very consolidated right now — people with similar experiences and age, who make sense to be the pioneers. Therefore, I’d like to see more young entrepreneurs enter the scene.