Cairo Angels, one of the leading and oldest angel networks of the region that has been actively investing in Egyptian startups, has launched a micro VC fund, it said in a statement to MENAbytes. The fund will invest in early-stage startups in the Middle East and Africa.
Zeina Mandour, the general manager of Cairo Angels, told MENAbytes that they already have a few commitments and expect to close the fund in the first quarter of 2021. She said that they’re aiming to raise USD 1.2–3 million for the fund and will deploy the capital immediately after closing.
Angel networks normally source deals and share them with members as investment opportunities. Unlike VCs, they do not have funds to invest in startups directly (with approval from their investment committee), so they raise money for every opportunity that arises.
Cairo Angels will continue to operate its angel network as is, investing in pre-seed and seed-stage opportunities in Egypt. In addition to that, the new fund will invest in seed and pre-Series A opportunities across the Middle East and Africa, with a focus on Egypt and Saudi Arabia. Given the size of the fund, it will not be the largest check in these deals, but will help startups close their rounds.
VC funds normally make money by charging a management fee, which is 1–2.5% per year in the region, and by earning a carry on exits, which is normally 20%. Cairo Angels told MENAbytes that it will not be charging a management fee and will only be incentivized by a carry on successful exits.
Aly El Shalakany, a member of the newly launched fund’s investment committee, said, “We are always looking at ways to bring new ideas and innovation to our region, and launching the fund is the next step in our evolution. We have enjoyed great success investing in this space, and we now want to democratize access to this exciting asset class to active and passive investors alike.”
“Our new model will bring something different to the market and provide much-needed capital to a clear gap in the funding life cycle of startups in our region,” he added.
Nader Aboushadi, a member of the fund’s board, said, “This is an exciting time for Cairo Angels as we embark on this new venture to create our first fund. Since we’ve been pioneers in the industry, we are confident that this fund will bring a lot of value to investors, startups, and the community. This fund will create a unique opportunity for people to have access to innovative ideas at an affordable initial investment that is available for everyone.”
Alex Angels, another Egyptian angel network, has launched a USD 6 million angel fund to invest in early-stage Egyptian startups.