The Capital Quest | Egyptian venture capital Algebra Ventures exceeds target for new fund in first closing

The Egyptian technology-focused venture capital firm Algebra Ventures which had launched its second fund early last year in a bid to raise up to $90 million, two-thirds more than its first investment vehicle four years ago, exceeded the target.

The venture capital firm said on Tuesday it had reached the first close of $100 million for the new fund, surpassing its initial target for the entire fund. Since the fund is still open for subscription, it should reach $125-150 million as it draws the curtains down, if not more.

Algebra Ventures said it received commitments from existing LPs of the first fund, including IFC – International Finance Corporation, EBRD and Egyptian American Enterprise Fund, which signed larger checks, while FMO – Dutch Entrepreneurial Development Bank, British International Investment, MSMEDAEG, Dutch Good Growth Fund (DGGF) and regional family offices are new investors in the second fund.

The fund will mainly bet on Egyptian startups, but it will also look for investment opportunities in the broader Middle East and Africa region. The amount of his ticket will vary from $500,000 to $2 million.

The second fund, like its predecessor, will invest in companies in the fintech, ed-tech, logistics, healthcare and agri-tech segments. Algebra will also continue its co-investments with local, regional and international venture capitalists.

The fund will be led by four partners: Tarek Assaad, Karim Hussein, Omar Khashaba and Laila Hassan.

While Assaad and Hussein are among the three managing partners with Ziad Mokhtar, the firm had recently hired Hassan and raised Khashaba to the top team.

He brought in Hassan from 500 Startups, where she was a key member of the team executing a follow-on strategy for his fund focused on the Middle East and North Africa. She previously worked with Middle East Venture Partners, a MENA-focused fund based in Dubai.

In another move of people, Algebra Ventures has elevated Khashaba as a general partner. He joined Algebra Ventures in 2018. He has helped lead investments in some of its fastest growing portfolio companies and was promoted to director of the first fund in January 2020.

Algebra had raised $54 million for its first fund from LPs such as IFC, Cisco Investments, Egyptian-American Enterprise Fund and the European Bank for Reconstruction and Development. The first fund invested in 21 startups.

The venture capital firm’s portfolio includes shopping app GoodsMart, fashion e-commerce platform La Reina, ride-sharing company Halan and travel portal Holidayme.com.

It had hoped to make the first close of the new fund in the third quarter of 2021, but has done so now. The firm had almost crossed the halfway mark last December with a mix of returning and new LPs.

The venture capital firm announced a few deals, which are currently in storage. Private equity and venture capital firms only start rolling out money after they score their first close.

Algebra Ventures led the pre-seed funding round for an Egyptian agri-tech startup Mozarus3 and supported by a Jordanian cloud-based point-of-sale platform POSRocket. Other transactions he has been involved in include Sakneen, trelle and Yodawy.

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