2020 was a good year for Egypt’s fintech scene
Fintech flourished in Egypt in 2020 despite covid-19’s negative impact on funding, writes Citibank’s Vice President of Europe, the Middle East and Africa strategy Michel Assaad for Wamda. Though health and transport startups managed to raise the biggest total sum of funds last year, 2020 saw the launch of a number of exclusively focused fintech funds including the USD 25 mn Disruptech, and the Central Bank of Egypt’s EGP 1 bn fintech fund.
Our Enterprise tracker counts 49 investments in Egyptian startups last year, with fintech just edging out e-commerce as the most popular sector with investors. VCs made commitments to 12 fintech outfits and 11 e-commerce plays in 2020. Tap or click here for the full rundown here.
Legislation and milestones: The passing of the Banking and Central Bank Act provided a regulatory framework for the operation of digital payments, banks, and currencies, providing more certainty as the industry grows, Assaad writes. 2020 also saw the launch of Egypt’s first independent e-wallet provider, Raseedy, as the number of mobile wallets jumped 17% between March and October last year thanks to increased reliance on digital payments because of covid-19. Fawry became Egypt’s first unicorn after achieving a market capitalization of USD 1 bn, while a number of partnerships (Paynas and Banque Misr, Visa and Fawry) helped propel the industry ahead as big banks and companies help up-and-coming fintech players “expand their footprint,” Asaad says.
What should we expect moving forward?: A number of fintech IPOs are in the pipeline, having been postponed during a turbulent 2020, including non-banking financial services platform Ebtikar, which is planning an IPO of a 25-30% stake in the company some time in 1Q2021, while state-owned e-payments platform e-finance could debut as soon as 2Q2021. Raya subsidiary Aman Holding is reportedly also planning an EGX debut in the coming two years. 2021 could also see the growth of digital banks, as well as a growth in the mining and use of bitcoin and regulation governing cryptocurrencies.