Moustafa Allam
World financial institutions are supporting startups as they contribute directly to the global economy. Recently, Egyptian startups have emerged as a major driver of growth beyond traditional sectors. They respond to real market needs and scale fast.
The North African country will get a new international financing package aimed at strengthening its startup sector, as global development lenders move to support venture capital activity during a period of tighter private funding.
This program is underway under Egypt’s Micro, Small, and Medium Enterprise Development Agency (MSMEDA), which oversees policies and financing tools to expand non-bank funding channels for early-stage companies.
The state is awaiting $135 million in new financing under the second phase of a national venture capital support programme. The funding will be $120 million from the World Bank(WB) and $15 million from the African Development Bank (AfDB).
The funding is considered a mechanism to sustain momentum in the startup sector and shield it from fluctuations in private capital flows. By introducing long-term institutional capital into venture funds, the state aims to stabilize funding cycles and prevent sharp drops in startup activity.
In 2021, Egypt received the first phase of the programme with$50 million from the WB, which was invested indirectly in venture capital funds rather than individual startups. It helped strengthen the market without exposing the state to direct company-level risk.
Beyond the announced$135 million, the program seeks to attract between $400 and $500 million in parallel investments from other development institutions and private investors, increasing the overall impact on the market.
A report by data analytics platform, MAGNiTT, shows that Egyptian startups raised about $614 million in funding, accounting for nearly 20 percent of all startup investment in Africa, positioning Egypt among the continent’s leading markets.
At the regional level, the MAGNiTT report pointed out that Egypt ranked third in the Middle East and North Africa in 2025, with total startup funding reaching $304 million.
This programme also allows the government to direct capital toward priority sectors, including financial technology, digital services, logistics, and export-focused platforms.Yet, it avoids heavy state involvement in individual companies while still shaping market outcomes.
For investors, receiving such backing from development finance institutions lowers risk and strengthens confidence. For startups, it expands access to long-term capital through growth phases.
