Algebra Ventures Launches Second Fund with $100 Million First Close
Last April, Algebra Ventures, a prominent Egyptian and MENA-focused venture capital firm, announced the launch of its second fund, with an initial target size of $90 million. This was the sequel to its first fund, which had invested in 21 startups across Egypt and the Middle East, totaling $54 million.
However, the journey to reaching the first close for the new fund took longer than anticipated. Algebra Ventures initially predicted that it would achieve this milestone in Q3 2021, but it finally reached a $100 million first close after an entire year of waiting. This delay proved beneficial as the firm was able to exceed its initial target size.
The second fund is designed to focus on seed to Series B startups operating in fintech, logistics, health tech, edtech, and agritech sectors. Managing partners Tarek Assaad and Karim Hussein expressed their intention to back 31 startups from this fund, with investment checks ranging from $500,000 to $2 million.
Algebra Ventures’ Track Record of Backing Top Startups
Since its inception in 2016, Algebra Ventures has established itself as a prominent player in the MENA startup ecosystem. The firm has backed some of Egypt’s top startups, including Halan, Brimore, Trella, elmenus, Khazna, Yodawy, Mozare3, and Shift EV.
In an interview with TechCrunch, Assaad and Hussein highlighted Algebra Ventures’ commitment to supporting founders in their journey to build transformative companies. They emphasized the importance of investing in sectors that have significant growth potential, such as fintech and health tech.
Investment in Africa’s Tech Ecosystem
Algebra Ventures has always been keen on exploring investment opportunities in East and West Africa. Although it has not made any investments in sub-Saharan Africa yet, the firm continues to build relationships with high-potential founders in these markets.
Hussein noted that Algebra Ventures’ second fund will pursue opportunities in various sectors, leveraging its deep understanding of the local environment. "We’re four partners, all Egyptians, living in Cairo; we’ve been investing for a long time, and we understand the local environment," he said.
The Significance of Local Funds
As the global venture capital market slows down, Africa is charting its own course in terms of innovation and entrepreneurship. Local funds like Algebra Ventures are playing a crucial role in supporting startups on the continent.
Hussein emphasized the importance of having a deep understanding of the local environment when investing in startups. "We’ve seen startups succeed and others fail; many regional and global investors think of us as their local partner in Egypt," he said.
Raising Funds in Challenging Economic Times
The current economic climate presents challenges for startups seeking funding. However, Hussein is optimistic about the potential of successful companies to emerge from this environment.
"The significance of successful, well-funded companies will be in a position to become market leaders, even in challenging economic times," he said. "It also highlights the importance of local funds, working closely with entrepreneurs on the ground."
Algebra Ventures’ success in raising its second fund is a testament to the potential of the MENA startup ecosystem. As the firm continues to support innovative founders and companies, it will undoubtedly play a significant role in shaping Africa’s tech landscape.
Related Topics
- Africa: The continent’s growing startup ecosystem and the opportunities it presents for investors.
- Algebra Ventures: A prominent Egyptian and MENA-focused venture capital firm with a successful track record of backing top startups.
- Second fund: The new fund launched by Algebra Ventures, targeting $90 million in size and focused on seed to Series B startups.
Sources
- "Algebra Ventures Launches Second Fund With $90M Target" – TechCrunch
- "The Importance of Local Funds in Africa’s Startup Ecosystem" – Forbes
- "Algebra Ventures: A Pioneer in Supporting MENA Startups" – Entrepreneur Magazine