Ibrahim Abdel Rahim — Co-Founder of the Moonbase Fund — said that he aims to implement the first closing of the fund with a value of €5m within weeks.
He added in exclusive statements to Daily News Egypt via Zoom that the fund was established this year and that its capital is collected through individual investors who enter as partners with a minimum of €500,000, and its target capital is €15m.
He added that the fund plays a role similar to direct investment companies, as it assists entrepreneurs in selecting a medium-sized company to be acquired, then the fund’s partner entrepreneur develops and accelerates its growth in order to then exit the company by offering it on the stock exchange or selling it to a strategic investor.
Abdel Rahim confirmed that the fund’s business model depends on acquiring small- and medium-sized companies, helping them to develop their business volume, and then exiting from them after a period of time ranging from 5 to 7 years and selling them to another investor or offering them on the stock exchange.
He pointed out that the average return on this type of investment is 30% compared to investing in start-ups, according to Stanford University.
He also said that the fund intends to conduct promotional tours among investors in Egypt to explain the mechanism during the next stage.
Abdel Rahim added that the fund is interested in investing in small- and medium-sized enterprises that are of a family nature, and its founders prefer to devote themselves to their management tasks.
The Moonbase Fund aims to invest in 25 entities during the next stage, and the fund is currently arranging to pump investments in small and medium companies in the European and Asian markets as a first stage.
He also revealed that there are a number of Egyptian entrepreneurs cooperating with the fund who are currently looking for investment opportunities in two small companies in the industrial sector.
Abdel Rahim said that the medium and small companies sector accounts for 80% of the size of the Egyptian economy, which represents a great investment opportunity, pointing out that the concept of developing small and medium businesses through the entry of strategic investors into the structure of its shareholders appeared in America during the eighties of the last century through Stanford University.
He believes that investing in the small- and medium-sized companies sector is less risky compared to venture capital that specialises in investing in start-up companies due to the availability of two factors, the first of which is investing in already existing entities that generate revenues and profit margins, and the other is the reliance of most of these companies on bank financing to support their plans, which is what ensures the strength of the financial solvency of these companies.