Proparco, a subsidiary of the AFD Group focusing on private sector development, has announced an investment in an early-stage venture capital fund managed by DisrupTech Ventures, to support development in Egypt’s fintech sector and help expand access to financial services in the country.
Proparco committed $5 million to DisrupTech, which aims to provide seed capital to up to 28 start-ups with a prime focus on financial technology services.
The fund raised $36 million from several investors, including Development Finance Institutions, Funds-of-funds, and Family offices.
It will be an important financing source for Egyptian tech companies, which often struggle to raise capital to bring their innovations to market.
Expanding access to financial services from making deposits to paying bills is urgent for Egypt’s digital transformation and financial inclusion.
Meanwhile, the amount of venture capital available in Egypt is just a quarter of the emerging market average, though it has grown substantially in the past few years.
Along with capital, DisrupTech will also provide advice and mentorship to the businesses it supports.
“Egypt is full of bright, talented founders, but too often, they cannot secure the capital they need to expand their businesses, We are always excited about supporting entrepreneurs, increasing access to financial services, and contributing to Egypt’s growth,” said Mohamed Okasha, Managing Partner at DisrupTech Ventures.
“We are pleased to partner with DisrupTech Ventures, which has already become one of the leading early-stage investors in Egypt. Thanks to its company-building track record and domain-specific expertise, DisrupTech is bringing much-needed support to young companies in the region,” said Françoise Lombard, Chief Executive Officer at Proparco.
He also added, “ This is in line with Proparco’s strategy to maximize impacts and to finance innovation, by fostering the emergence of a dynamic venture capital industry to back African entrepreneurs”
DisrupTech was established to support early-stage Fintech and Fintech-enabled digital services startups with a focus on Egypt.
The team adopts a hands-on approach from the very beginning, partnering with talented entrepreneurs to transform their vision into reality. One of its main aspirations is to be a catalyst in transforming the larger financial services ecosystem in Egypt.
Launched 24 months ago, DisrupTech has invested 40% of its fund size in technology start-ups to date.
DisrupTech was founded by a diverse team of financial technology veterans and entrepreneurial investment professionals with experience in Egypt and internationally.
In 2021, DisrupTech invested $1 million in a pre-seed funding round in Cassbana which is a platform that uses AI to run a behavior-based credit scoring system that launched its app on a trial basis last June. According to founder and CEO Haitham Nassar, it hopes to attract 1 mn users by the end of 2021.
Proparco’s investment in DisrupTech is part of its Venture Capital program, through which it has invested over €120m in African early-stage companies and venture capital funds since 2020.
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