Exclusive Interview With Dr. Hossam Osman, Vice President, ITIDA, Egypt

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Discover the Egyptian Startup Scene and Investment Opportunities.

A hotspot for luring venture capital and attention from investors and entrepreneurs, Egypt today holds a key place on the Middle East and Africa regional investment map. The most recent reports indicate that Egypt is third in terms of volume of funding and first in terms of the number of investment deals in the Middle East and North Africa. Dr. Hossam Osman, ITIDA’s vice president of managing Software Engineering Competence Center (SECC), Technology Innovation and Entrepreneurship Center (TIEC), and Information Technology Academic Collaboration (ITAC), provided more information on the factors and elements that have contributed to the development of the business ecosystem and startups in Egypt.

1. Let’s first learn about the responsibilities entrusted to the Information Technology Industry Development Agency (ITIDA) and the goals it aspires to.

The Information Technology Industry Development Agency (ITIDA) is the executive arm of the Ministry of Communications and Information Technology (MCIT), a government entity tasked with leading and catalysing efforts to develop the Egyptian IT sector and increase its international competitiveness by identifying and meeting the needs of the global and local industry through programmes and initiatives designed specifically for this purpose.

The strategic vision and direction of ITIDA are mainly intended to drive sector growth by opening new markets, developing human and institutional capabilities, and guiding and stimulating innovation and R&D.

The Technology Innovation and Entrepreneurship Sector is a critical component of TRA’s work and one of the pillars of MCIT’s strategy, playing a vital role in the country’s transformation into a digital economy. As a result, given Egypt’s advanced position in this field and its remarkable successes at the regional and international levels, both the Ministry and the Authority are eager to provide support and stimulate the growth of the entrepreneurship sector, sponsor entrepreneurial projects based on technological innovation, and create the appropriate climate for the growth of startups as one of the most important axes of building Digital Egypt.

Considering that (ITIDA) offers services that span the entire value-added chain, we are the first Egyptian organisation to have implemented a programme to support startups in Egypt since 2006. We have also been leaders in fostering the environment for entrepreneurship and supporting newly founded businesses.

We are a body concerned with working in all stages of the startup ecosystem, from awareness of the importance of entrepreneurship, technological innovation, and independent professions through training and skills development, holding competitions and encouraging incentives, to enhancing the presence of startups in the marketplace. This is where we differ from the investment sector.

ITIDA puts a lot of emphasis on the ideas of young people by organising competitions at the level of Egyptian universities and governorates, developing promising ideas into prototypes that are incubated and developed as the core of a successful company that has a product ready for launch (Minimal Viable Product), and helping these startups take part in state exhibitions and forge relationships with investors in addition to offering laboratories for these companies. One of the comprehensive integrated services that we refer to as (End to End).

The Authority has a role responsible for the development of industry generally and not just a commercial and profit role, and what sets us apart is that we carry out these works in various Egyptian governorates. We began in Cairo through the Technology Innovation and Entrepreneurship Center (TIEC). Then the centers spread throughout Egypt in collaboration with the Ministry of Communications and Information Technology and its supervision. The Creativia Centers run by (TIEC) are now located in Borg El Arab, Assiut, Menoufia, Minya, Ismailia, Mansoura, Qena, Aswan, and Sohag. Our equipped branches will open six months in Beni Suef, Alexandria, Benha, El Fyoum and Port Said. By the end of this year and 2024, we will open other branches in Tanta, Zagazig, Al Wadi Al Gadid, and Arish, which makes us present at the level of the whole country.

This puts us on the path of developing small startup ecosystems in various Egyptian governorates. These systems are established and managed in collaboration with the local private sector and the expertise of international investors to transfer global expertise in entrepreneurship. These centres are based on ITIDA’s ideology of creating a growing ecosystem for startups in each region, making these regions rich in the necessary elements to support the growth of entrepreneurship.

We currently have two global operators in the venture capital space, such as (500 Global) and (Plug and Play), which are situated close to Cairo and Ain Shams Universities, which have the highest student densities. Additionally, there are branches of local operators in the Egyptian governorates who have received training from global VC operators. With their assistance and expertise, we are already laying the groundwork for developing the startup ecosystem in Egypt.

Selecting Startups

2. What criteria does ITIDA employ to analyse startups before choosing which ones to incubate?

We are eager to incorporate private sector VC operators, investors, incubators, and accelerators into our programmes because ITIDA’s involvement in the Egyptian startup ecosystem aids in the growth and stimulation of the ecosystem as a whole, not in direct competition with the private sector.

We aim to incubate all Egyptian startups on an equal basis so that the various startups connected with investment incubators and accelerators, such as (Flat6Labs), (Falak Startups), or (AUC Venture Lab), benefit from ITIDA’s services and are involved in international exhibitions, where we provide all of our services to all businesses, whether they are affiliated with our incubator or another. 

As a body associated with the Ministry of Communications and Information Technology, some frequently mistakenly believe we only assist startups operating in the ICT sector. In reality, however, we support all digital businesses across various industries and sectors that rely on technology to deliver the services, solutions, and products the market demands. As evidence, look to our supported portfolio of businesses, which includes emerging communications technology entities and enterprises operating in other industries. 

Incubating Business

3. One of the key initiatives for fostering and nurturing startup concepts is the Technology Incubation Programme run by ITIDA’s Technology Innovation and Entrepreneurship Center (TIEC).

1. When did your incubation programme begin? What is the scope of his power?

The Ministry of Communications and Information Technology’s administrative structure managed the incubation programmes in 2006. In 2010, the Technology Innovation and Entrepreneurship Center (TIEC) was established as a centre affiliated with the Ministry and in charge of these programmes. In 2014, the affiliation of (TIEC) was changed to (ITIDA), and the centre’s incubation programmes have been expanded since then.

2. What kinds of enterprises are you searching for in the TIEC incubator programmes? How are these startups able to participate in your incubator?

We are interested in any ICT-based startup to help it develop a successful business model. We rely on a committee of experts to choose the companies nominated for the incubation programmes. This committee comprises one representative from the (TIEC) and more than 75% of members from the private sector, investors, and business and technology professionals. 

Every three months, we open the doors to new startup ideas and allow them to participate in the incubation programme. We receive about 100 applications each time we do this. Most applicants are young people under forty, with about 20% being women interested in entrepreneurship. We also have a programme for incubating women entrepreneurs under the title (She is a pioneer), focusing on projects and business ideas that suit ladies. There are more than 300 women who have been trained over the past period. 

ITIDA and the various TIEC centres and their incubation programmes do not focus on the economic profit aspect only but instead look at other indicators like the importance of the sector we invest in and support for the country, where we find a limitation for investors to invest in the electronics industry because it requires time, effort, and high risks due to its requirement of supply lines and chains. Still, we have supported this industry and were able to establish several businesses.

3. What advantages, services, or resources does the programme provide for startups?

In addition to gaining experience from the advice of experts and consultants, business incubator programmes give startups the chance to build a strong network of relationships and get to know organisations, governments, and people involved with the industry at the local, regional, and global levels. We have a wide, rich, and large network of relationships, and as I previously mentioned, our incubation of any startup has no bearing on the management decisions of the startup.

As a government body concerned with the Egyptian startup ecosystem, we have a service that we have been providing for years: the opportunity to incubate companies in their pre-seed. Because we are a government entity, we can support companies with more risk than other investors, as we receive applications from companies that have ideas or prototypes only and have not registered themselves as a company or legal entity yet, which gives teams and companies that have not exceeded a year since their establishment the opportunity to enter the technology incubator Programme (STARTIT) and obtain On a financial grant of EGP 180,000, including EGP 120,000 in services and EGP 60,000 in cash.

Not to mention the chance to get a head office and offer free development labs, training courses, and consultations in the fields of law, marketing, finance, e-marketing, and business development, on top of the services of participation in international exhibitions like (Web Summit) and (VIVATECH) and other events that give company founders various experiences and knowledge and aid in growing their business, and what distinguishes us is that we do not only provide these services to the companies we incubate but also to all startups incubated by incubators and other business accelerators.

4. Could you give an instance of a successful startup that has come out of your programme?

Approximately 270 startups have graduated from the incubator that we have contributed to establishing in various sectors and fields, especially the electronics company such as (Master Micro) which specialised in deep technology, and (GBarena) working in the field of gaming, which has become a well-known Esports platform at the regional level. There are companies in the field of artificial intelligence and robotics, such as (Widebot) and (Crowd Analyzer) that expanded in the UAE, in addition to (Garment IO) which specialised in enhancing factory productivity, and (Amjaad Technology) that working in the field of (Smart Metre), whose projects are distributed inside and outside Egypt.

Going back in time, we have various businesses like Bashar Soft’s WUZZUF, Freeziana, which mentors and supports female entrepreneurs in marketing their goods; CyberTalents; Dileny Technologies, a healthcare technology company that specialises in spotting and tracking breast cancer in women; Shezlong, a remote mental health platform, Mermaid for businesses and home cleaning professions, and Interact-Labs, which has a device capable of transforming any a screen or display surface into a smart display space that interacts with the user… and many more.

Programmes and funding for Egyptian startups

4. The TIEC-managed Pre Incubation programme aids in the creation of fresh project concepts. What distinguishes this programme from the one for business incubators? Does ITIDA provide an acceleration programme?

We have changed the name of the accelerator programme (Accelerator) to the Pre Incubation Programme because we do not include companies in the growth stages of our programmes. Instead, we focus on businesses needing support during the Pre-Seed and Seed incorporation stages. This programme allows idea owners to create preliminary business plans for their projects to create a product before going into full production.

5. Through the Collaborative Funded Projects programme (ITAC – CFPs), ITIDA assists in funding research for some businesses. Which segments of the industry are this programme’s target? How does it help those with creative minds? 

The three categories of collaboratively funded projects (CFPs) supported by the (ITAC) initiative for collaboration between businesses and research organisations are as follows: Product Development Projects (PDP), Advanced Research Projects (ARP), and Primary Research Projects (PRP), where the programme focuses on creating collaborative projects and connecting businesses generally and startups, particularly with academic institutions and scientific research organisations, to advance the technological presence and advance information and communication technology for business in Egypt, and the programme offers its participants funding ranging from EGP 350k up to EGP 3M. A business like Dileny Technologies has benefited from the initiative by using it to create its medical products and services.

Egypt’s Investment Climate

6. Egypt now holds a favourable position on the finance and startup investment map. What factors gave investment funds and venture capital the confidence to invest in the Egyptian market and promising startups?

As the startup ecosystem in Egypt is distinguished by the abundance of talent and cadres, people are the first and foremost draw for investment in the Egyptian market. A comprehensive understanding of the needs of the local, regional, and international markets as well as the numerous challenges that need to be solved by entrepreneurs, lead to opportunities that enable the emergence of startups that meet the needs of people. As a result, we observe numerous businesses that began locally before evolving and growing on a regional and international scale.

The most significant aspect of Egypt’s startup ecosystem is its human component. Egypt has many talents across various disciplines, and we are skilled at using our limited resources best. We also see the inventiveness of young people today across a wide range of industries, particularly in fintech, e-commerce, logistics, and transportation technologies.

Because of Egypt’s big population, which generates a lot of ideas, the startup ecosystem in Egypt is characterised by diversity, with different industries and sectors being diverse. The startup ecosystem in Egypt is also characterised by rich content and data density.

The presence in the Greater Cairo area, for instance, where 20 million people coexist, and the sizeable student body in the capital’s universities – which increases interaction and friction generated for the exchange and maturity of ideas – create challenges and needs that need to be met by various means and methods; this is where the role of a good entrepreneurial environment in serving the public and meeting their needs, as well as for fostering innovation comes into play, Which offers telemedicine services, simple access to medical care and medications, education services, retail and supply chain facilitation, and many other sectors that are good for developing the startup ecosystem in Egypt.

7. What are the most recent statistics and reports certified for the Egyptian startup environment and ecosystem? 

Different organisations publish many studies measuring the startup scene in any nation. There are further studies on the evolution of the startup environment through time. The indicators of these reports concentrate on the number of investment deals and the volume of funding superior to supporting startups, the types of growing industries within the system, and the significance of talent available. The most recent reports come to monitor the Egyptian scene and rank it in third place in terms of the volume of investment deals with a total of $517 million at the level of the Middle East and North Africa region after Saudi Arabia and the UAE, as well as we ranked third at the level of Africa after Nigeria and Kenya.

Regarding the number of deals, we are first in the Middle East and North Africa and second in Africa after Nigeria. We also achieved a slight growth in the last report. Still, it was relatively less than the previous two years of that report due to the global economic situation and increased competition to attract investment at the region’s level. With regard to the talent index, Egypt ranks among the top 15 countries in the world for the availability of skills at a competitive cost.

Market Trends and Challenges

8. How does ITIDA stay abreast of market developments and changes to maintain the competitiveness of its startup ecosystem?

Let’s consider trends from a technological perspective. For instance, the world is increasingly focused on transportation solutions, and clean energy and alternative fuels are also receiving much attention, In addition to the trend towards artificial intelligence, metaverse and electronics solutions. We also keep an eye on hotspots that cater to the global market’s needs. 

With this strategic vision that takes into account people’s needs, we commit to creating specialised programmes to support business trends that are in line with global trends and keep up with what is happening through tactical actions tailored to each area of the various industries, where we push the business in general and the startup ecosystem in particular, and encourage attracting investments in the various essential industries the world is currently witnessing. 

While working to facilitate policies, laws, and legislation that facilitate the establishment and growth of these businesses, we are also clearly monitoring the global interest in the financial technology sector. As a result, we have directed a package of strategic plans to support startups that find solutions to meet the growing market requirements in this direction. 

Regarding the direction of business models, we are presently concentrating on the platform’s strategy as a business model, which is tasked with developing platforms for data collection and analysis through artificial intelligence. We are also working on training startups to adopt this model to reach the broadest possible audience using a variety of technological tools. 

9. How many challenges do you believe the startup environment in Egypt is currently facing?

When discussing the challenges the startup ecosystem in Egypt faces, we discover that Egypt’s potential has yet to be fully realised. On top of these capabilities is the dynamism of young people studying in Egyptian universities. In this case, we must concentrate on effectively preparing students for entrepreneurship as a fundamental educational methodology, and the same for the academic component of faculty members, universities, and the entire educational system. 

The second issue is the business climate in Egypt. We think more needs to be done to improve it in terms of streamlining procedures, making it easier to make investments, and inspiring confidence in foreign investors and Egyptian businesspeople. The startup ecosystem must always be considered when making decisions, laws, or regulations from a procedural and legal standpoint. Decisions should never be made without considering how they affect the business environment.

10 Promising Startups Graduated from ITIDA Incubators

1. Shezlong

• Founder: Ahmed Abu Al-Haz and Mohamed Monji
• Founded: 2014
• Location: Cairo
• Industry: Health Tech
• Sector: Telemental Health Services
• Raised: $666K

The first platform for online psychotherapy in the MENA region is called Shezlong. It connects its users with licensed psychotherapists through a platform whose tagline is “You speak. We help.” The platform respects the patient’s right to privacy and offers the service without identifying him. The user can schedule a 30- to 1-hour session with a therapist or psychologist to meet with them privately and receive psychological consultations using chat rooms or Shezlong’s video technology. 

2. TAZCARA

• Founder: Ali Adham and Bassem Ayad
• Founded: 2017
• Location: Cairo
• Industry: Travel Tech
• Sector: Booking Travel tickets
• Raised: EGP 120K

TAZCARA was among the companies incubated by the TIEC Innovation and Entrepreneurship Center, and the platform offers a search engine for bus routes between major cities in Egypt. This ticket-based solution helps local users find suitable bus trips at the lowest price. TAZCARA team has been working hard since February 2018 to provide an exemplary service that meets the specific requirements of the Egypt local market. 

3. Imedical

• Founder: Ola Salah Ayoub
• Founded: N/A
• Location: Cairo
• Industry: E-Commerce
• Sector: Dental Supplies
• Raised: N/A

The e-commerce platform of iMedical provides its users with the most recent dental supplies, linking dentists with suppliers. It sends purchased materials straight to Upper Egypt, Alexandria, and Cairo clients. Through the e-commerce portal, students may acquire the medical supplies they require for their coursework from various vendors at affordable pricing.

4. PayMe

• Founder: Mourad Ashry
• Founded: 2015
• Location: Cairo
• Industry: FinTech
• Sector: Online Payment Gateway
• Raised: N/A

PayMe, a fintech firm, provides cutting-edge electronic payment solutions to support the local digital economy. Accepted by the Innovation Hub TIEC, PayMe is now assisting its clients in Egypt to set up an online payment gateway. The organisation offers various services, including cash collection, Fawry services, and payment via credit card in 3 minutes.

5. DilenyTech

• Founder: Ahmed M. Ehab Mahmoud
• Founded: 2016
• Location: Cairo
• Industry: Medical Engineering Tech
• Sector: Online Detection of Breast Tumours
• Raised: $255K

DilenyTech, a medical engineering technology firm, was founded to offer various options for identifying breast tumours online and offline. To improve and complete detection and diagnostic decisions and streamline the screening and diagnosis workflow, the startup created the BE-SMART solution for breast health specialists. They received a patent from the U.S. Patent Office for the new technology, which measures the elasticity of human body tissues by ultrasound imaging. Their technology is based on a combination of medical image processing algorithms and artificial intelligence. This method eliminates the need for expensive, complex, and sophisticated ultrasound machines, which lowers the cost and time required to diagnose various diseases, including malignant tumours.

6. GBarena

• Founder: Bishoy R. Mesdary, Hussein Raafat El-Gebealy, Mustafa Mahmoud Zaza, Samer Wagdy Halim
• Founded: 2015
• Location: Cairo
• Industry: E-Sports
• Sector: Video Games
• Raised: $508.3K

In the MENA region, GBarena is the first and top eSports platform. The platform provides services to stakeholders and e-sports system enthusiasts such as game publishing firms, sponsors, events, exhibitions, conference organisers, players, teams, and content producers. The platform makes their access to data analytics-based products and services possible. After completing its Series A financing round in 2022, GBarena now has the funds necessary to create new services, such as opening an online store on the platform and making its currency that gamers can use to buy in-game things from the store.

7. Widebot

• Founder: Mohamed Nabil, Saif Ahmed
• Founded: 2016
• Location: Cairo
• Industry: Artificial Intelligence
• Sector: Building Interactive Chatbot in Arabic
• Raised: $600K

WideBOT, the leading chatbot platform, provides interactive IVR in Arabic to its customers in the MENA region. The platform offers its users services that enable them to communicate with their customers in an automated manner through their preferred communication channels, which increases sales quickly and simply. WideBOT was one of the startups that graduated from ITIDA’s technology incubators. Its team won the local edition of the DMO Africa Conference Tour hosted by the Technology Innovation and Entrepreneurship Center after competing with 30 Egyptian startups in the local version of the round. The company was selected to represent Egypt in the regional semifinals for North Africa and then in the grand final competition.

8. Bey2ollak

• Founder: Ali Rafea, Mohamed Rafea, Gamal Sadek, Mustafa El-Beltagui, and Yahya Ismail
• Founded: 2010
• Location: Cairo
• Industry: Smartphone Applications
• Sector: Traffic Information and Data
• Raised: N/A

Users of the Bey2ollak smartphone application can exchange real-time traffic updates in Cairo and Alexandria. The App It may be downloaded without charge On both Android and iPhone. (Bey2ollak) was one of the initiatives that took part in the Next Generation IT Entrepreneurs Camp (NexGen), where five young people created the application: Ali Rafi, Mohamed Rafi, and Gamal Sadek, all computer science graduates who were in charge of development, Mustafa El-Beltagy, a business administration graduate who was in charge of marketing, and Yahya Ismail, an architect who was in charge of designing user engagement.

9. Crowd Analyzer

• Founder: Ahmed Saad, Bahaa Galal
• Founded: 2016
• Location: Cairo
• Industry: Artificial Intelligence
• Sector: Social Media Content Analysis
• Raised: $5.1M

Crowd Analyzer is a website portal for content analysis and social media channel monitoring services. The accessible tool looks at, keeps track of, analyses, and draws in-depth insights from which it aids its clients in achieving their company objectives and assessing the success of their marketing initiatives in reaching their target market.

The revolutionary natural language technologies used by Crowd Analyzer include speech processing, machine learning, and artificial intelligence (AI). The company received undisclosed funding from the Dubai Investment Fund in 2016. and in July 2018, it obtained US$1.1 million in initial investments from venture capital firms from the GCC region before the first round of its startup funding journey.

10. Amjaad Technology

• Founder: Hussein Darwish
• Founded: 2014
• Location: Cairo
• Industry: Sustainable Energy
• Sector: Reduce Energy Loads and Rationalise Consumption
• Raised: N/A

The (TIEC) business incubator incubated Amjaad within the 2015-2016 program. The company provides an intelligent electricity meter (IOmeter) to residential complexes in Egypt; this meter saves customers up to 25% of their electricity bills, sends alerts for any energy overload, issues hourly reports on energy consumption and significantly reduces carbon dioxide emissions. The IOmeter also enables end users to monitor their consumption and pay their bills online.

ITIDA Collaborates with International incubators and Accelerators

500 Global

The Ministry of Communications and Information Technology (MCIT), represented by the Information Technology Industry Development Agency (ITIDA), has signed a cooperation agreement with 500 Global, a global venture capital investor, to open the company’s headquarters in Egypt for the first time in the African continent. This branch will be the operator of the Creative Innovation Center in Giza. The center is equipped at the highest level to develop the capabilities of startups and support digital creativity and entrepreneurship among youth. The agreement is three years, including establishing a headquarters in Egypt by 500 Global, building the capacity of about 200 startups during the deal term, and establishing a fund to invest in Egyptian startups.

PLUG AND PLAY

As part of the efforts of the Ministry of Communications and Information Technology (MCIT) to promote the growth of the entrepreneurship and startup sector and strengthen Egypt’s position as a leading hub for innovation-driven entrepreneurship, the Information Technology Industry Development Agency (ITIDA) and Plug and Play, a global leader in empowering and accelerating startups, announced that the Economic Governance Project (EGA) funded by the United States Agency for International Development (USAID) has joined as a new founding partner to launch the “Open Innovation Platform in Smart Cities” in Cairo.

The Economic Governance Project (EGA), global PLUG AND PLAY, and ITIDA are working together to establish an open innovation platform for startups in Cairo that focuses on digital transformation and brings the most current professional knowledge in the information technology sector to Egypt from the heart of Silicon Valley, California. The program’s application window opens, and between 20 and 30 Egyptian startups are chosen to participate in one of two tracks—the “Business Accelerator” or the “Startup Incubation” track.

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