- Algebra Ventures, a venture capital firm focused on the Middle East and North Africa, has announced the first close of its second fund.
- The fund, which was initially set at $90 million, has raised $100 million in the first close, attracting investors such as the IFC, FMO, and BII.
- Although its investments are focused on Egyptian and Middle Eastern markets, the firm intends to continue building relationships across Africa.
Algebra Ventures, a MENA-focused venture capital firm, has announced the first close of its second fund. Last year when the firm announced it was raising $90 million for its second fund, it predicted it would reach its first close by Q3 2021.
While its plans were delayed, it has now exceeded the amount it had earmarked, with $100 million raised in its first close. The firm expects to reach its final close by Q1 2023. Like its first fund, the firm will continue to focus its investments on Egyptian startups, although it will explore opportunities in East and West Africa.
“Our second fund will pursue opportunities in various sectors by partnering with high-potential founders to address specific market gaps in these sectors. We haven’t made any investments in sub-Saharan Africa yet, but continue to build relationships in these markets,” Karim Hussein, one of the firm’s Managing Partners, said in an email to TechCrunch.
Its check size remains unchanged from what it invested in the first fund, and the firm will continue to write checks from $500,000 and going as high as $2 million in portfolio companies. While announcing its plans last year, the firm indicated that it could adopt a startup studio model that will see it encourage individuals in its network to start companies.
One of the largest local funds on the continent, Algebra Ventures has the Dutch entrepreneurial development bank, FMO, International Finance Corporation (IFC), British International Investment (BII), the European Bank for Reconstruction and Development, Employee Assistance European Forum, the Egyptian Micro, Small and Medium Enterprises Development Agency, the Dutch Good Growth Fund, and some family offices as limited partners.
For Hussein, exceeding its initial $90 million target validates Egypt’s startup ecosystem.
“This is a testament to the potential of tech entrepreneurship in Egypt. Even in these uncertain times, there will be funding to back founders who are building transformative companies. The upside is still very significant, and successful, well-funded companies will be in a position to become market leaders, even in challenging economic times.”