Top of Mind. Happy Sunday!
I am eagerly counting down the days to Christmas and publishing one more newsletter before the holidays. Yes, you heard it right, I’m publishing one more newsletter to close out the year next week, and we’ll connect again in the new year!
But this week, Egypt’s got me excited!
3 big things:
- Egypt is coming for your favourite African startup city
- The CEO of Better could do better
- Instagram makes a significant change
Egypt is the uncrowned king of Africa’s tech startup ecosystem
The short: Egypt is coming!
What this means: The startup ecosystem in Egypt is fast transcending Africa and the MENA region to becoming a big deal in the global tech scene.
Innovative tech companies are springing up to create tech-powered solutions to payments, logistics, education, and just about anything with young and fledgling talents.
Come through, government! The country’s government seems to show steady support and has been a keen player in the industry – all of these have swayed regional and international investors.
Behind the scenes: Egypt’s startup success relies upon several factors, including the country’s youthful tech-savvy demographic, deep government and industry support, plus one of the most startup-friendly policies on the continent.
Egypt is also the home of startup incubation and acceleration. No other country in the region comes close. According to a Disrupt Africa 2021 report, at least 40% of Egyptian tech startups have participated in an incubator or accelerator program.
The VC landscape: Egypt’s tech startup ecosystem evolved from receiving local support majorly led by Flat6Labs, its first-ever accelerator, to more specialized and diverse local accelerators like EdVentures (for Ed-Tech startups), Tech Space (for blockchain startups) and Falak (a government-run accelerator for early-stage startups).
Even better, the startup scene is gradually becoming self-sufficient – investments from local VCs and angel investors like Algebra Ventures and Cairo Angels are driving the growth of startups through fundraising rounds.
Big 3 + 1: Nigeria, Kenya and South Africa were regarded as the continent’s Big 3 tech startup cities, steadily attracting investor dollars and facing their respective challenges. However, Egypt has cracked the ceiling and made it a four-way race. Egypt’s immense growth and geographical advantage are crucial factors in becoming a key player.
By the numbers: Despite an economic-stifling pandemic, Egyptian startups saw an inflow of $190 million in 2020. This figure represents a 30% YoY increase, and international investors are responsible for 32% of investments in the country’s tech ecosystem.
Big Deal: Amid various announcements from Egypt’s tech ecosystem, SWVL, a transport and logistics startup, listed in NASDAQ at a valuation of $1.5 billion. It became the first Egypt-founded startup to go public internationally and was the most significant African unicorn debut on any US-listed exchange – trumping Jumia’s $1.1 billion NYSE debut. Final thoughts: Egypt is here!
Instagram’s chronological feed stages a comeback
he short: Instagram will bring back the chronological feed in 2022 – the head of the social media company, Adam Mosseri, told the U.S Senate earlier in the week.
What it means: Instagram currently uses the algorithmic feed – the key criteria determining what users see. Content is surfaced to users based on relevance, user engagement and activity.
For many, the algorithmic feed meant that they did not see posts from people they follow (unless they turned on notifications for those users). However, in some cases, the platform provides recommended posts from other users they do not follow.
With Instagram’s announcement of the chronological feed, users will see posts from the people they follow based on timeline.
Hang on a minute… Instagram is not exactly returning to the old chronological feed style. Instead, the platform is testing two iterations of the feed, and users will be allowed to pick their preferences.
The first will enable users to select their favourites to display atop their feed in chronological order. In contrast, the second will allow users to see posts from everyone they are following in the same order.
Big picture: The Senators pressed the platform on the issue of child privacy and claimed Instagram is responsible for internet addiction, especially among teenagers.
The company recently launched the “Take a Break” feature, a purge that allows users to pause their use of the app when they feel compelled. In addition, Adam promised more parental controls and suggested the establishment of “an industry body” dedicated to overseeing children’s online involvement on social media.
Senators were not entirely convinced about industry “self-policing” and are considering more action, although the regulatory landscape is also somewhat unprepared to take on these issues.
Final thoughts: A complete pivot from the algorithmic feed could be difficult, especially for a feature dependent on opt-ins. I reckon this would be a classic ‘wait and see’ moment of how users opt-in to this comeback feature.
After firing employees via zoom, Garg gets the gag
The short: For Vishal Garg, founder and CEO of Better, things have gone from bad to worse. The infamous CEO who fired 900 company employees via Zoom last week was asked by Better’s Board of Directors to take a break from his role.
What happened: The board of directors at the SoftBank backed digital mortgage company announced Garg’s forced break from his role and the engagement of an external firm to undertake a “leadership and cultural assessment” via internal email.
This announcement followed the fallout, which led to three key employees resigning – the heads of marketing and public relations and the Vice President of communications (Ha).
Pride before the fall: Garg justified his decision with the unfounded claim that “at least 250” of the dismissed workers were “stealing” from the company. He accused them of working only two hours out of eight work hours and lauded his decision as one that needed to be made for the company to thrive, however sad it feels.
Garg earlier defended his position on social media but has now apologised following public angst.
Crazy Garg: Garg is a particularly eccentric and brash figure within the company. On several occasions, he clashed with his employees and investors.
He once threatened to burn his business partner alive, but his decision to lay off about 15% of the workforce somehow amounted to his craziest act.
Final thoughts: Garg’s decision feels like a stunt to mask the company’s recent financial failures and coming headwinds. Insiders are saying Better had overhired after SoftBank led the investment in his company.
But, rather than solving the problem, Garg seems to be looking for the perfect factor to blame – his staff.
PS – It’s Christmas season and tech companies are hibernating, ergo, no new features or products this week 🥲
That’s it for the week. See you next Sunday!
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