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Tuesday, 22 September 2020

Alex Angels postpones launch of EGP 100 mn fund to November 2020

STARTUP WATCH- Alex Angels is setting up an offshore vehicle to manage its EGP 100 mn startup fund. Alex Angels is in the process of setting up an offshore company to manage the portfolio of its planned EGP 100 mn fund, Chairman Tarek El Kady told Enterprise. The group has postponed the launch of the fund, which will invest in local startups, to November from September, El Kady tells Al Mal. The delay is a result of the procedures to set off the offshore vehicle, which appeared to be the “most economical” option for the fund, he told us. El Kady did not elaborate further on the group’s decision to opt for an offshore fund. Regulatory and tax constraints have previously been identified (pdf) as factors pushing post PE and VC players doing business in Egypt to transact via offshore vehicles. The poor enforceability of shareholder agreements that don’t hew closely to local law has also been cited by some pundits as a factor.

What will Alex Angels invest in? The fund is looking to provide early stage tech and communications startups with 30-50% of their capital requirements and expects to make its first round of investment worth some EGP 30 mn in late November, with plans to invest the full EGP 100 mn in early 2021. Alex Angels made its first investment in 2017 in the online delivery app VOO, and has since supported tech-powered startups such as Mumm, Mayday, El Gameya, and Ordera, among others.

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