Algebra Ventures is Investing $50M in Early-stage Tech Startups in Egypt and MENA
The interview was conducted by Burak Buyukdemir, a VC, as well as the Founder and CEO of Etohum, a Turkish accelerator program. The article is written by Nardine B. M’barek, a Contributor Author at Startup Turkey.
Tarek Assaad is an engineer by training. He started the first part of his career in the San Francisco Bay area where he used to work with a technology startup around the mid-1990s. His role evolved following that from a technology-related role to a commercial one. He also studied business in San Francisco as well where he spent some time before returning back to Egypt, where he did some operating roles, added to being a Venture Capital for the last ten years.
Algebra Ventures is a $50-million Cairo-based venture capital fund that invests in early-stage technology companies in Egypt and the MENA region. Its LPs include Cisco, the European Commission, EAEF, EBRD, IFC, and private family offices. Algebra has invested in 15 transformative technology companies in MENA, including HolidayMe, Trella, Elmenus, Dsquares, and Halan.
Algebra Ventures was established around two years ago. They are basically a classic technology Venture Capital fund. They support early-stage technology companies with series A and B rounds of funding. Algebra Ventures are typically the first institutional money to come in into a startup. With the help of their partners, they support with subsequent rounds of funding from investors who are very reputable. As a Venture Capital fund, they focus more on Egypt but also operate within the Middle East region.
As the most known and strongest Venture Capital in Egypt, they represent the institutional money that comes into a startup. The reason why they focus on Egypt is that most of their experience is in Egypt. As stated before however, they do invest in some parts of the Middle East such as UAE and Jordan. So, mostly neighbouring countries of Egypt which represent the scope of their funding. In terms of sector, they invest basically in technology and its sub-sectors such as transport-tech, marketplaces, consumer internet, SaaS, etc.
The process for investment for Algebra Ventures is quite easy; they look into a high number of companies per year who are screened during the team’s periodic meetings in order to decide which companies are to be invested in. Typically, what happens is when one of the three partners, together with the associates gets excited for one of the opportunities. Following that, they do a deep dive that includes analyzing the numbers related to the company. They mostly look at numbers, and if things go well, then they will take that opportunity to their Investment Committee. The earlier part of the process usually involves data and numbers’ analysis. Once that goes to the Investment Committee, then they can issue a term sheet, followed by negotiations and legal matters. The needed time for a complete procession of the investment depends on how ready the company is. As Tarek stated, the fastest they have done was ten days., while there was a time when it took more than four months.
Algebra Ventures gets to see hundreds of deals annually. With all these companies asking for investment, they have certain red flags that allow them to make the best decisions. According to Tarek, one of the biggest red flags they take into consideration is the size of the market. They see quite a few companies that have an interesting product, and who were founded by a technical team. The product’s features are good, but it is not sure how big it can get.
Relying on his experience as a Venture Capital, Tarek stated a few pieces of advice for startups who want to get investment. According to him, each startup needs to have a clear view concerning where they want to go, and what is needed to get there. They also need to understand their market and their targeted consumers, as well as all the data that backs up their plans.