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American University in Cairo (AUC) Top African University That Produces Startup Founders, New Research

According to recently published research compiled by Antler, a Singapore-based venture capital (VC) firm, out of all African universities the American University in Cairo produced the highest proportion of individuals who went on to found highly successfully startups.

More specifically, the report referred to growth-stage startups (ones that raised more than $10 million), soonicorns (raised more than $100 million and were founded in the last five years) and unicorns (startups valued at more than $1 billion).

15 percent of all Africa-based founders of these startups were AUC graduates, the highest ratio on the continent. It was followed by the University of Cape Town in South Africa, graduating 4 percent of the continent’s high performing tech entrepreneurs.

Cairo University made it two Egyptian universities in the top five in fifth place, producing 2 percent of African founders.

Unsurprisingly as a result of this, Cairo is the eighth most emerging tech and startup hotspot African city.
2021 has so far been a good year for capital investments worldwide, reaching $300 billion in the first half. Almost 800 startups became unicorns in this period.

Africa has been no stranger to this development, where so far four of the continent’s seven unicorns have emerged this year alone.

According to Ayman Ismail, an associate professor at AUC School of Business and Abdul Latif Jameel Endowed Chair of Entrepreneurship, this achievement has been years in the making.

“Growth has been going in a substantial way for the past five to six years at least” he said. “Part of it is that we’re getting entrepreneurs, funding, support systems and recognition that there is a substantial market that’s unserved and underserved.”

Egypt did particularly well because of the myriad of its unique challenges that have been tackled with simple tech solutions, according to Ismail. Thanks to the availability of innovative entrepreneurs and talent, it was only a matter of time before it was going to attract attention from the investment community.

Ismail is the founding director of AUC Venture Lab (V-Lab), the university’s own startup incubator where one of Antler’s referenced unicorns (Swvl) originated.

As to why AUC graduated Africa’s highest portion of successful startup founders, he believes it was a mix of picking the right entrepreneurs and being effective at providing them with the needed support to grow and succeed.
However, Antler also revealed a massive gender gap in the African tech sector. Out of all the startup founders surveyed, only 8 percent were women.

Regarding this, Ismail said “Genders gaps in entrepreneurship is a global phenomenon. It’s typically 40 to 60 percent as a global average across all sectors. In tech, you find that the gap is more pronounced, [especially] in Africa.”

He offered a more optimistic vision of the future, though. “A lot more women are majoring in computer science, engineering, data analytics and so on. What’s more important for me is having teams that are mixed and balanced because that provides for a much more productive team. If a startup’s team has three or four people, it is very important to make sure that it’s not 100 percent-male. That diversity adds a lot of value to the team and the startup.”

What kinds of startups can be expected to come out of Africa in the future? Ismail believes the area of financial technology (fintech) and healthcare (healthtech) are already very attractive and will only continue to grow. V-Lab alone graduated 48 fintech startups in the last five years.

COVID-19 unravelled unprecedented shortfalls in healthcare “but it also showed that many of them can be solved through technology in easy ways. Right now, many simple ICT solutions can improve the access, quality and affordability of health care across the country. I really see [the healthtech sector] evolving in the next few years.”

The example of Swvl also offers mobility solutions in large and congested cities like Cairo, providing safe and affordable mass transit for women and the middle class. Other Egypt-based startups such as Paymob, Maxab and Brimore offer many forms of assistance to small and medium-sized enterprises (SMEs), providing finance, commerce and supply chain solutions.

“In a country like Egypt and in Africa broadly, very simple tech solutions help in access and affordability to basic services that were [previously] not accessible by big segments of the population. Those are the types of companies that have huge potential, using these solutions but also using data analytics and connectivity to make basic services accessible. That’s the huge current opportunity,” Ismail concludes.