CEO of Sequence Ventures Mohamed Fahmy revealed that the first closure of the Deep-Tech fund is expected to amount to EGP 150m within a month and a half after obtaining the fund’s pledges.
He indicated that the company is in the process of completing the necessary procedures for the first closure, as it seeks to obtain the approval of the Financial Regulatory Authority (FRA), and it is expected to be issued within a month and a half.
Fahmy told Daily News Egypt that the pledges will be collected from Insurance Holding, Misr Life Insurance, Misr Insurance, Export Development Bank, and Attijariwafa Bank, as well as two family offices, and an international financing authority.
He added that three of the above-mentioned parties are interested in subscribing to the second closure of the fund, which is expected to have a volume of about EGP 500m by mid next year. Fahmy stressed that the company will utilise the proceeds in about 35 investment opportunities.
Fahmy added that the company is currently studying about 22 investment opportunities, and that an investment’s life is about five years. He also pointed out that the average size of investment in one opportunity is EGP 15m.
The CEO noted that the exit plan will be in favour of major investment funds at a certain stage of growth for the company, especially that the fund invests in the initial stages of companies’ lives.
He added that the company has already invested in four start-ups, including M Technology Research and “Naqdy” for digital lending.
Furthermore, Fahmy said that the company is looking for investment opportunities in deep-tech start-ups, highlighting the scarcity of such companies in Egypt.
He also expects a great deal of activity in the acquisition of successful start-ups due to the fact that the valuations are attractive, pointing out that the start-up market has recently witnessed exaggerated valuations, and that exaggeration was about to kill investment. Moreover, the sector witnessed a correction process over the past period.
Moreover, Fahy explained that exaggerated valuations were the result of the fact that the supply in the market exceeds the demand.
Sequence Ventures was established in late 2019, and its Board of Directors includes Karim Helal as the Chairperson, Maged Shawky as the Vice Chairperson, and Mohamed Fahmy — who serves as an Executive Director.