Sherif El-Rakabawy, CEO of Yaoota, the price comparison platform, said the idea of creating the company came to him in 2009 when he was at Berkley doing research for his PhD. He and his partner Mohamed Awais were able to secure $2.7m in financing for their idea.
He explained that Yaoota is “a sort of a search engine” that allows users to compare prices of different items. The company grew by 1,200% in 2015, after launching two applications and moving into both Saudi Arabia and the UAE.
He added that the ecosystem in Egypt is very limited, especially in regards to capital risks as only a few investors are willing to risk and invest in new and unconventional sectors. This is besides the foreign exchange problem, and the control the banks impose on payments through debit and credit cards, by setting a limit as low as $1,000 per month which greatly affects the ability of companies to operate freely.
Moreover, bureaucracy is another issue facing start-ups—it takes a very long time to obtain the necessary paperwork. Egypt is a country with great opportunities as a great deal of services aren’t yet available here, but what start-ups really need is more local investors who are willing to take risks. This is needed more than loans as many start-ups cannot generate the revenues required for repaying a loan in one year.
El-Rakabawy added that government initiatives to “cluster us” are a positive step as long as the cost for entrepreneurs remains at a minimum. The government needs to develop a competitive process for universities and research centres to obtain funds, he said, adding that many people don’t know that a company as huge as Google started as a project funded by the US federal government.