By: Moslem Ali
Cairo – Mubasher: The British Egyptian Business Association (BEBA) organized a webinar on Tuesday discussing “The Road to Digital Transformation and Innovation” to discuss the rising importance of digital transformation, especially in the post-Coronavirus (COVID-19) world.
The webinar was moderated by Hoda Mansour, Managing Director at SAP, who said that the focus on digitalization has been amplified by COVID-19, pointing to the Egyptian government efforts to digitize many sectors, such as education, even before the pandemic.
Mansour noted that in Egypt, the FinTech and startup scene has recently been rapidly developing.
“This is the digital transformation era, not just in Egypt but in most countries,” said Ahmed Mekky, Chairman and CEO at Benya.
Egypt started digital transformation years ago with many megaprojects and heavy investments in digital infrastructure. The first phase of digitalization of the education sector focused on high school students and achieved a record number in terms of testing for the first secondary grade, Mekky added, noting that collaboration between the government and the private sector is boosting digital transformation.
Reem Asaad, VP Middle East and Africa at CISCO then revealed that Egypt is leading digital transformation in the region. “COVID brought various changes such as remote working and adopting cloud and cybersecurity solutions.”
The way we consume technology has changed, with the focus shifting from product features to digital transformation solutions, Asaad indicated, adding that in the UAE, EXPO has been an example with more than 2,000 people shifting to working from home, while in Egypt digital transformation efforts are led by education platforms and the New Administrative Capital megaproject.
Founder and CEO of Fawry, Ahmed Sabry, said he did not expect his company to become the first Egyptian unicorn. “We are not targeting the valuation figure. We are focusing on delivery,” he stated, pointing that the Egyptian young and promising market is also leading Fawry to focus on growth.
Speaking about the journey of Fawry, Sabry said that they were lucky to have institutional investors since the beginning, advising startups to focus on growth and scale, especially as the startup scene in Egypt has been advancing for the past four or five years.
Ahmed Badawi, Country Head of Global Liquidity and Cash Management at HSBC Bank Egypt, said that the bank is supporting the Central Bank of Egypt’s (CBE) initiative to support small and medium-sized enterprises (SMEs) and that HSBC Egypt recently updated their system to ease its use by SMEs and added the Arabic language to help more startups use their platform.
Incubators and Accelerators
Professor Hossam Osman, Adviser to the Minister for Technology and Innovation and the Head of Technology Innovation and Entrepreneurship Center said that “Egypt is creating a very healthy startups scene,” leading Africa’s investment charts in 2019, and maintaining a good position in 2020, ranking second in the Middle East with $130 million in investments.
Osman then pointed to the efforts exerted on the startup incubation front to support innovation, explaining how hybrid platforms, physical and digital, are spreading the startup culture across Egyptian universities in many governorates, while partnerships between the public and the private sectors are a strategic step to establish technologically mature startups.
Afterwards, Walid Hassouna, CEO at EFG Hermes Finance, said that EFG is very interested in startups, an interest that started with corporate innovation and a focus on FinTech, before joining efforts with the government in FinTech acceleration since 2018, as well as moving to invest in startups not only in Egypt, but also in the UAE, Jordan, and the US.
How to Have More Unicorns?
Asaad remarked that innovation, adapting to the new normal, and reinventing startups across many sectors could help startups achieve success.
Meanwhile, Badawi said that more startups need to make use of the high penetration rate of mobile and smartphones in Egypt, which exceeds 100%, adding that improving the legal framework is another necessary step to help startups flourish, a goal that requires all stakeholders to commit to their roles.
Consequently, Mekky said that three factors are most important. Firstly, moving faster and together, as startups do not have the luxury of trial and error so they must also follow the best practices. Secondly, more investment in the smart infrastructure. Thirdly, better funding and public-private partnerships.
Speaking about a common mistake by small businesses, Hassouna said that many startups try to create everything from scratch; instead, he advises them to build on the available solutions. “Artificial intelligence (AI) and blockchain are easing entry barriers” and with access to smartphones and the internet, some startups in the region are working on growth hacking to build competitive advantage using AI and data science.
Osman then said that faster improvements in legislation are needed even with the recent reforms, while Sabry pointed to the challenging emergence of what he calls the “informal digital economy,” which he believes is forming due to the non-acceptance by the regulatory framework, pointing to the need to change the mindset.
Sabry also emphasized that digital transformation is not just about automation, but it could also be about the availability of services remotely. He then called for an improved focus on experience and integrating various platforms to provide scale.