Africa’s Unbanked: Where FinTech Is Finding the Most Resilient Returns | Mohamed Okasha, DisrupTech Ventures (#134)

Up next on the SRI 360 podcast. You have to take the step and jump if you think that this is the right thing to do. So I think let's do it. When you come to a point where you have to take a digital decision that's going to take you to left or right, sometimes when you feel that you have made your decision, you go ahead and don't think twice.

If you're still thinking, so don't make things, you will not have to worry about anything. But if it goes okay, you have always the advantage while everybody is waiting seem more, is that you take a step forward, and the gap between you and any potential competition would be widened to a way that you will never be able to compensate for it later on. I always say to the founder is the ideas are for straight. I mean, there is no a great idea.

You can do a good will and you'll come up with a 10 great ideas in the financial system. The idea is unlock the potential of your investments to improve the world and make high performance returns. Welcome to Sustainable and Responsible Investing 360. My name is Scott Arnell, and each week I sit down with a world-class investor to uncover their secrets of profitable ESP, impact, and socially responsible investing.

Find out more at SRI360.com. A lot of investors looking at Africa are waiting for it to look more like Silicon Valley. They want the same type of exits and the same fund profiles and the same valuation logic.

But waiting may be costly because the real opportunity in African FinTech is not finding the next unicorn, but it's in understanding why 80% of the people lack access to financial services and why the people building the infrastructure to fix that are generating some of the most resilient returns in the emerging markets. Today's guest is Mohammed Okasha, who was the co-founder of Fowri, Egypt's first tech unicorn. Before most Egyptians had a smartphone, Fowri was processing over a billion dollars in transactions through neighborhood kiosks.

Then, during the peak of the COVID-19 pandemic, he walked away from all of that to back the next generation of African fintech founders through his new firm, DisruptTech Ventures. In this episode, we talk about why Egypt is the most important testing ground for scalable fintech in Africa and why financial inclusion only works if the cost of serving the underbanked comes down, and why the investors who understand what he calls the African way stand to capture the most durable upside in the decade ahead.

Please meet Mohammed Okasha. Mohamed, thanks for coming on the show with me today. I always start by going back to the beginning of each of my guests' stories. But I want to start today by dropping into one very specific moment in your life.

And then later on we'll rewind back from there. But I want to go back to right now April 1st, 2020, which I'm the last is April Fool's Day. COVID has just hit. The world is falling apart.

On that day, you walk away from your role as managing director of Fowry, which is a company you co-founded, and a company that had just done one of the most successful IPOs in Egyptian history, and a company worth over a billion dollars. And your plan at that point is to go and raise a first-time venture fund. What was happening inside of you? And talk me through what was going on in your head.

This is a great question. I mean, I can remember these days. I mean, it was quite a lot of thinking going on and discussion with my colleagues, my friends about what we should do. So the plan is that I had agreed with the board of Pauri after the listing is six stable.

Then I go ahead to establish the fund. I mean, the fund was an idea that we had in mind even before the listing. The objective was clear. I had a passion to support startups and stage founders who are building something unique in this space.

And I we tried as Fauri management to invest in a couple of startups, but it did not go very well. I mean, because of, I would say the difference in terms of speed, the objective between Kaurie as a big corporate at that time and the startup. So we thought that the best thing to do is to do a structured, independent venture capital and invest not only money but also know-how and experience that we can help the early stage startups to start. So at the time when it started with my plan to execute, exactly what happened is the COVID hit the world.

Everybody was running around, don't know what's next. I mean, we don't know how this will end. I was always saying, I'm a risk taker by nature. I mean, I always do whatever I want, and things will happen in the way that it happens, but you have to take the step and jump if you think that this is the right thing to do.

So I thought, let's do it. If things went very bad, it will go very bad for the whole world. So it would not be my problem. I will not be something any special.

I will be just part of everything falling apart. But actually, what happened a few months after I started my journey is everybody started talking about global services. We call it the stay-at-home service. Everybody was saying we are gonna stay at home, everything will be happening from home.

So what we have been bitching for or supporting startups to build digital services around payment and other digital financial services was happening actually, and everybody was starting to say, I'm going to order everything online, pay online, things that were not commonly happening in in markets like us. But it was a self-fulfilling prophecy that everything happened because everybody was aware, uh sorry, afraid that the COVID will be here and will continue forever. So I think this is another, I would say, bit that I made, and it worked very well in my favor.

So it was a great moment. I think always when you come to a point where you have to take a digital decision that's going to take you to uh left or right. Sometimes when you feel that you have made your decision, you go ahead and you don't think twice. If you're still thinking, so don't make them.

Yeah. You say you're a risk taker, you walked away on April 1st, 2020, and then you made your first two investments that very same month in April 2020 into Kasna and Remore. And this is when the world's locked down, and really nobody knows what's coming next. What did you see in those two founders and in that moment?

And what made you write those checks? It's one thing to walk away, you still have all your financial resources, but then to actually get the checkbook out and write that when nobody knows what's going on, what's gonna happen. How the topic came to life. People would say uh Aukasha is a good person, he's a good operator.

We know him as an operator, and we're willing to back him as an operator. So if you ask me, if I ask for any amount of money to start a new venture, it would definitely be easy to justify. But we don't know Akasha as an investor. We haven't seen him in action.

I don't know what how far he will go. The only way to prove it is to start by myself. So I start saying if the fund will happen, I have to alcohol the fund. And especially because the time was really, I would say, everybody saying it's we don't know.

We cannot assess the situation, we don't know how COVID will change the world. People were reluctant, and I wouldn't say reluctant, need time to make uh any decisions. So I thought the best thing to do is to go forward and invest by my own money and to prove the thesis in action. I started by looking around in two companies that already had interaction with me at Cowry.

And I know the founders, I have seen them pitching and talking, building. So I had enough time to assess them before April 1st. So when the time in the moment comes, I said, let's me choose two good founders, two good funding teams, and make a bet on them. And that's how it happened.

At that point of time, people saw it as a very courageous way that you start investing money before even anything happened, before there is a fund. It was done in my personal name with a promise that I would transfer it to the fund once. Let's rewind the tape and go back to the beginning. You grew up in Egypt.

Tell me about young Mohammed. I'm curious about the inputs growing up. What was your household like? Tell me about your parents.

What was the environment like that shaped the man you are today? I am a normal, a very normal uh standard childhood in Egypt. I grew in Egypt. I got my education in Egypt.

The only time I got to be exposed to the other culture was the American University in Cairo, which I joined in the mid-80s. I joined the university. That's the first time I got exposed to other cultures. And American University in Cairo at that point of time has students from all over the world, mainly expats that are living in Egypt, sending their kids to the university.

So you have a mix of cultures, either as a student or as practical. And that was very enlightening for my knowledge and experience that I was exposed to different cultures: American, African, Asian, European, all types of different experiences and backgrounds were there in one place, getting learning and education in one place. And because this is what is still the best education, a civic institution in Egypt, usually it attracts the best English at once. So we get to be challenged by a very smart people and smart mind.

Else, another thing that was nice as well, it guarantees you they get the job because the pool of graduates are small and high in high demand. So I got, I would say, my first job while I was still in education, not finishing my school, but people started to offer me a job. I graduated and immediately I was sitting on a desk in a company getting paid to do something. That's one of the things that really was important in my career.

Going back to your home environment, did your parents value education? What did your father and your mother do? And was this Cairo that you grew up in? My father and mother are both employees.

I mean, they were not entrepreneurs. They started their career in an organization and grew up to be seniors in that. So at that time when I was in university, they were senior managers in their organization. But the culture around us was not entrepreneurial culture, it was standard corporate life.

However, they were always backing me up when I wanted to take risks. The idea of going to an American university was not common in our time, but people say that you go to uh the biggest university, which is Cairo University or Alexander University, that's the common. So going to a private university was starting out at all. They always backed me when I took risks.

And that really continued to happen in my life, is that I took risks because they always say, go ahead, don't worry, what happened if you didn't make it, you couldn't go back and start a call over again. That's the culture that we had at home. Where did that come from if neither one of them took risks? Yeah, sometimes you you don't take risks, but you wanted to take risks.

And when you see your kids, you push them to do what you wanted to do, because maybe you didn't have the chances, but they believed in this, they believe in that you will not learn until you try and make mistakes and you start over again. It was a common thing that was said, you never fail until you stop trying. Before that, it is still a try. You went to the University of Cairo and you studied computer science.

What was it, the idea when you entered? Were you fall all in on that? Was it just something you were interested in, but you didn't realize you would make a career out of that? Computer science was the hot topic of the of that time.

Yeah. So people want to be close to software development, programming, anything that has to take. So I mean, that was the highly thought-after uh specialization. By virtue of I wanted to go for the best, I went for it.

And I was yeah, I was happy that I learned a lot, but I knew that this is something missing. So I my major was computer science, my minor was business administration. So I would try to mix between knowing the technical part, but also knowing how to make money out of that thing. Uh so that's how how I chose, and it went to a good place when I finally graduated.

And because I chose a star, a major that is in high demand, I got a job very quickly. That job was at Reholding, and you ultimately spent about a decade there. So tell me about Raya and what you were doing there and what you learned from that time you spent there. When I joined Raya, it was not the big Raya, it was a very small organization, around 30 people who previously worked for IBM, left IBM as senior positions and started uh a tech, small tech company with the objective of working with IBM or getting contracts from IBM to execute in that engage.

So it was a small organization, but the founders, me as one of the early employees who joined the company, have a dream that why not to build something that one day can compete with IBM and become a very large system integrated range. So small company, very ambitious team, working very hard. The hierarchy does not exist. People work at one team, very small team, very agile, again, risk takers.

It yielded that the company that Turkey now is almost 30,000 employees in Egypt, and it is one of the biggest uh tech company nested in the stock exchange as well. I wasn't a founder, but I was very close to people who are founding a company, starting a company, building it from scratch, building a reputation, building a name, which has also shaped my way of looking and thinking about business. You had a mentor there who told you something that you still say to yourself every single day.

Tell me this story. My manager, actually the company CEO, and he was direct manager to me sometimes through my career. He was uh a legend in the people management. And he was very good in managing people, uh, motivating them to do something out of their way.

So he managed to attract the best talent again in the company in the market to join him and to escape with him. And also he managed to make them feel old as owners. So they we all have very small shapes, but we felt like this is our company from day one. And we worked in take decisions, took decision, and he was always supported, even if you make mistakes.

Second thing is that he allows people to respect the differences for each other. So that was the one thing that he said, and I was really admired, is that respect to your differences. We are different as good people, and being a different is not bad, it's very good. But you have to understand, accommodate that, and accept it to Mukuru.

So, but the one thing that I would say that I managed to uh inherit from this experience is the people money. Managing people is a very, very difficult thing. You already referred to it earlier in our conversation. Did this mentor uh say to you, you only fail when you stop trying?

As long as you're trying, there is still a chance. So that's what I when when I heard this from him, I remember that I that was actually our house in home at home. I hear a youth will hear that. So I mean that inspired me as well.

Because I mean, but the way he didn't does it is that he supports you when you make mistakes. Yeah. As someone who makes decisions as young, not very experienced, you have to make mistakes. And there is no way that you um have the courage and yes, I'd say the risk taker approach is unless you have someone to back you up when you make a mistake, either small or big.

You will not be encouraged unless someone tells you don't worry, go ahead. And with time, with responsibility, with ownership, your mistakes actually is minimal because ultimately you own it, you own the money, you feel that this is a good company, so you work very carefully not to make mistakes. But he he did support all of us. I mean, and most of the people who came out of this story, I would say I would call it school, went out to the market and built the great things.

This has stuck with you for over 30 years. Do you test for that specific kind of maybe what you would call stubborn resilience when you're sitting across the table from a 20-something-year-old founder who's pitching you today at Disrupt Tech? Yeah, very important point. I mean, our markets is different from Europe and US.

You need if you want to succeed in this market, you have to have to be resilient, you have to be very resistant, you have to be really strong. Why? Because you're not only managing your business, but you are managing a lot of challenges around you. You have a macro issues, you have currency devaluation, you have bureaucracy, you have, I would say, a limited or different kind of correction around you.

So it's a market that is very difficult, very challenging, very political. And you cannot succeed. I'm not talking about idiots, I'm talking about Africa in general. You cannot succeed in our market unless you have really this type of resilience and the persistence.

Knowing about your business is not enough. Knowing about how to navigate to uh around you is what makes a success story in our market. For sure. I mean, that's a very good point that I Udud will ask about how would you handle that?

If he is a dreamer and he thinks that things will happen like you as soon, this is not the place for him to start a business because things don't go ahead. On the personal side, I've understood that you wake up at 5 a.m. every single day, wherever you are in the world, for fajr prayer.

You walk to the mosque, you come home, you drink tea, and you've said this is when your best thinking happens. What happens in those quiet hours that can't happen at any other time of the day? And what would break in your life if you ever lost that routine? And I'm very early rising since I'm very, I would be very young.

I'm early rising. And I sleep early as well. So I lose something because I sleep early. In our uh part of the culture, people usually stay up at night long hours.

This is typical in uh in the Middle East. But for me, I could not do that. I prefer to wake up very early. And by waking up very early and spending a couple of hours without noise, without calls, without having to interact with humans, that gave you the best time to think.

Most of the problem that I have in my life was solved in these two hours. You really have uh what I don't call it meditation, but it is a way of being fresh quiet time. And again, because of our in in our part of the world, this is a time where everybody was almost asleep. So you have this type of being alone, staying killed, reflecting, and taking your life easy.

And with time, I developed a few friends who have this habit. So uh sometimes when you need to have company, this is too early at that early time. You find a few people who can join you for a walk, join you for a chat, you know, for a pre-storming. Uh again, when you are up early in the morning, a lot of problems can be solved if you do it with a fresh eye.

After about 10 years at Raya, you went to Vodafone Egypt as head of marketing. You've said previously that this is where you understood something fundamental about how people actually change their behavior, not through apps, not through advertising, but through physical touch points, things like the kiosk on the corner through a shop that they already trust. I want to understand that insight because it became the entire foundation of Fowry. What did you see at Vodafone that no one else seemed to see?

I was a very successful person in Ryan, and I was the general manager, one of the biggest companies. But I spend in Raya around 10 to 11 years. And I think is that I've learned a lot in that market. I was one of the very strong caliber in that market, which is the IT sector.

But there is a lot of other parts that I don't understand. And you have to choose at that point in time to be the best in one thing, or to start looking at what is now the trendy thing. Again, being a risk taker, wants to be curious, wants to learn. I jumped and I found that Vodafone at that point in time, the best company and best employer in Egypt at that point, which is 2006, 2008, that's the time where the Vodafone was really attracting the best talents in Egypt.

What was good in Vodafone that is a real corporate? You know that uh Vodafone is a British company by origin. Yeah. So the bureaucracy and the system is uh very appreciated, very much appreciated.

Although that I would not believe 100% in being very bureaucratic, but I mean having a system in a big place is something that saves the company, makes sure that it exists regardless of the people. Vodapon also uh saw in me someone that is curious, risk taker, wants. To learn. So they tried to push me in places where they wanted to do more what they call a business development.

And one of the hot topics at that point in time was mobile paying. How can I use mobile to do things that was not possible before? And there was a some I would say trial across the operating companies in different countries. So I went to Kenya, I went to India, I went to Turkey, I went to Qatar.

And in all these places, I found different approaches to how to do mobile payments. So I came back to Egypt and told them this is, I think, what we should do. We have similar problems to India, similar problem to Kenya, similar problem to Turkey. But we have an Egyptian formula that I think this is the best thing to do.

So I went forward and bought a presentation to the uh not only the Egyptian management, but also the uh group uh head. And they bought in the idea and they wanted to do it. What happened then that Vodaporn as a culture started to be between me and what I wanted to do? It is bureaucratic, it is systematic, it is.

I tried for uh a year or so to launch something in within Vodaporn, but I found it is very difficult for a big organization to be as agile as you. This is where the point came is that if you want to do it, you have to do it somewhere else where the flexibility and environment is will allow you to do that. Although that I found the what you have mentioned as kiosk, using the kiosk and human ETM, what we call them at human ATM happening in Kenya, happening in India. But it has to happen in Egypt because we have similar problems, but it was almost impossible to do it in Wolfgang.

Although that everybody believes in it, but because of the environment, it was impossible. This is where it came to mind is I will leave again, I will take another risk, and I will start some. I was lucky also to meet my co-founder in Pavy who were building something already. My co-founders were building something for the banking side.

They were actually building appeal payment aggregation services on the ETMs. Allow the people who use the ETM every morning cash out is to settle their payment through an ATM. So I went and told them, I mean, guys, this is a great thing, but it is a niche market. The real market is in the 100 million people who don't have bank accounts, don't know how to do to do to deal with the ATMs.

So I convinced them to turn the infrastructure that started to build into an infrastructure to serve the whole mass. Because of what I see, I mean, I was not an inventor. I just saw an opportunity somewhere in other markets. I thought this can apply to agents.

I managed to convince them, I joined them, and we built, we invested, we injected capital, and we started the journey in 2009. That was the start uh of Pauri that was affected, but what I have seen in Vodafone, I'm grateful to Vodafone that they gave me this opportunity. So we're talking about the late odds around 2008 that you co-founded Pauri with Ashraf Sabri. The main challenge you had, as you mentioned, people had been paying for everything with physical money.

And now you're trying to get them to walk into kiosks and say, trust this machine. An interesting example I found was that in the early days, customers would pay their bills through Fowry and then immediately call on the telephone to the call center to check if the payment actually reached the billers. So, how long did it take to build the genuine trust? So we built it on a common practice.

We had the market which called top of people would have gone to the kiosk to buy and from the scratch card, the top of their mobile and then use. That was a very common practice before we started now. So first use case was allowing customers to top up their mobile from a point of sale that exists in the kiosk. So that was the first thing.

I mean, it was not a drastic thing, it was something new also to the customer to have a small uh uh machine like the V like the uh Visa machine or the master card machine that you can use to do a top. So that was the first use case. Then we started adding filta. The challenge, as exactly as you said, is that people were not this is new to them.

So how would I know if I pay here and the guy will give me as more receipt that you printed from the machine that I'm now more reliable to the operator or telecom operator for the pointer. So they had to make a check. So they started doing a call once and twice, and then they felt comfortable that this is happening and it's happening innocently and nothing. And with time it developed, I think it took them less than three years until uh we find people going to uh retain just pay for their uh airline tickets, take the ticket from the machine and go to the airport to travel.

So this is how it developed. People felt I'm very confident to the extent that I can take and go to the airport, and nothing will happen to me. But initially, exactly as you said, I mean, people would have to have a lot of doubt, and we want to check and the good thing that by the way, it's it's an Arabic name for innocent. In a saw, it means something that's innocent in English.

So the whole philosophy is that we designed the platform to allow you once you do something transactional, the system, that innocently it's affected in the bill. So it is not an offline system, it's an online, although that implies a lot of hard work of integration. But this is exactly what you have mentioned is trust. We wanted to gain the people's trust in the digital systems, which is something that was not common.

Because it was innocent, you can really pay your bill and call them, and they will tell you yes, it is already settled. And so some some choices are very important in a market where you are still gaining trust or building trust. So you found it around 2008, Fowry. You just explained the brilliant idea that you had.

And then around two years in, somewhere around 2011, the revolution happens. Egypt's on fire, the economy is collapsing. Every smart operator is pulling back, cutting costs, waiting it out. But I think you did the opposite.

You kept investing, you leaned in. I want to understand the psychology of that moment because I think most people would have frozen. What was the conversation like between you and Ashraf? Point that I mean we mentioned earlier, man, about resilience.

That was part of the thing that I was telling you. I mean, in a journey of power, we went through a lot of challenges that was beyond the business. A revolution, current evaluation, another revolution, changes in the um uh political uh structure. This is part of the business in our region.

You have to be able to handle this. So, what happened at that point in time is that we had a very deep conversation about if things would went bad, it will be bad for everything. So you will not have to worry about anything. It will be going very bad.

But if it goes okay, you have always the advantage while everybody is wait and see mode, is that you take an ad uh step forward, and the gap between you and any potential competition would be widened to a way that they will never be able to compensate for it later on. And that was again risk-taking approach. We still have money from the funding that we collected before the uh revolution. The market is not collapsing, but it is in the um wait and see mode.

Everybody is saying don't put money, watch until you think start. We said, let's use the money to grow the network, add more billers, and grow. I mean, run. And that risk taking came from the approach that we believe in Egypt.

We believe that Egypt is very big to pay. Egypt is um, and we're doing a service that everybody wants, and everybody is solving a real problem. So the downside is limited and the upside is huge. Again, it takes a mentality where you are willing to take risks that could succeed.

Again, that's one of the great moments for us because it bears a lot off after the two years from the, I would say, the political challenges is that after that, we were in a place that nobody could have built something and grow it very quickly to catch up. So became a dominant player after that challenge. Now, you've been very public about something that a lot of people in Western fintech would disagree with. You said that fully eradicating cash in Egypt is a dream that will not come true.

That fowry represents the transition, not the replacement. That's the contrarian position. Most of Silicon Valley is building for a cashless future. What do they have wrong about the emerging markets?

It has a great advantage. It's admitted. It is not traceable, it does not cost any money for the merchant to keep. And most importantly, you can hide from taxes.

I mean, or at least don't show it to taxes. So I mean, it has a great advantage to everybody. So there are reasons for people to transact in cash. And it is innocent, by the way.

I mean, I gave you cash, you get your money, you don't have to wait for time. So it has a lot of advantage. What we said is that the transition will happen because, again, the digital services have a lot of advantage as well. But you cannot forecast how long it will take.

It can take months, it can take years, it can take 10 years. So the best position for us in Sfaudi is to have a leg in the physical lot and leg in the digital world. No matter how fast the transition will happen, you are happy because if it's happening, you are already there. If it is not happening as fast as you want, you're still doing the physical work.

So we still still, even when you said the physical, we said that it's a digital world, but it is a semi-digital where the you still have to pay cash to the merchant or to the kiosk owner. And he does the transaction on a digital system, and from that moment it becomes a digital transaction. So it is a semi-digital. But you cannot assume that people will start from day one doing everything digital.

But same thing so, but we had a clear vision that digital world will grow and will be a dominant in the financial sphere. So we built our structure and we built a security around it, and we made sure that it is um resilient and um reliable enough. And it was tested in the COVID world, or for example, in the time of the COVID. When the time of COVID, people rushed to use digital payment.

And luckily, because we have invested heavily in that digital infrastructure, if you were just investing in the physical world and not investing digital, we had lost an opportunity. So the one leg in the physical world and one leg in the digital world was the best compromise. And I think it applies not only to Egypt, to most of the Africa, at least. Let's talk about the IPO.

It was in August 2019. Salary lists on the Egyptian exchange. And the IPO is oversubscribed by 30 times. Take me inside the boardroom the weeks before that listing.

Did you see that there was a risk that the market was underpricing? And why did you decide to list on the EGX rather than London or New York? Actually, that's another good question. I mean, most of the big companies that aspire to be grow to be big usually look for a market to list in, like New York, Nasdaq, or London.

That was the typical approach. Why? Because they think that the market and our emerging market or in Africa will not appreciate the technology companies and will not give it its right. However, because we're doing something that is extremely plugged into it into the ecosystem, and we believe that the brand is very important.

People find it easy to invest in a brand that you use at the norm. Like, for example, if you use Vodafone every day, it is easy for you to invest in Vodafone because you understand company. You don't have to have an expert to explain to you what that photophone does. And because we have millions of people using proudly every day, we found that people in Egypt will appreciate the company much more than the someone sitting in London or New York and don't use the six.

That was another thing, is that we believed in the uh, by the way, I mean, in Raya, I was not part of the IPO team, but I was close to the team that did the IPO prior. So we saw that there is an opportunity in the local market for a technology company. We assume that we can make it, but we what we did not really uh was expecting is the hype version rate around that. Because when you have a good product, it is not about the market, but it is the product.

We had a good product in a market that has not had many good products. We found a lot of money coming from international market, investing in four in a local exchange because they like the problem. So and that was enlightened even to the stock exchange in Egypt that the people response for it find when you list good companies, you will attract money. It is this is the best way to attract money to the local exchange, is to have a good company listing in local exchange.

So it was a risky move. Again, uh that worked for us very well. You would see the trend that we were always lucky. Yeah, I mean, you all you have needed series of luck to reach a good place.

Some people say you make your luck. In August 2020, mid-pandemic, the stocks run up more than 300% from the IPO price, and Fowry crosses a billion-dollar market cap and becomes Egypt's first tech unicorn. And you post on LinkedIn five words. Fowry is officially a unicorn.

That's a historic milestone. What did that moment mean for you and for the rest of the Egyptian tech ecosystem? We listed the company, by the way, at a valuation that was less than $300 million. So the first listing was very low.

The speed of appreciation showed that how much investors, the retailer institutions, were interested in such a company. And the appetite for investing took the evaluation to a billion dollars. That was the first time for a company, technology, a private technology company to be evaluated and done. For us, it was a moment of joy that we wanted to separate.

And when I wrote this post, I was just writing it to my friends and guys, we did it. And it would went viral. And what is very nice about it, that many people called me after that, and it was very inspiring for us. I mean, when we saw that it can happen.

So now we're talking about a different size, a different, I would say, target that we should look for as startups in it. So it was a normal post that did not mean to make it something big. It was very much appreciated in the um all the business community that people would say, wow, it is possible. Technology company worth worth much more than we think it was before.

People would have invested in the real estate companies, in manufacturing, in different type of industry, but tech nobody was uh expecting that this company could be worth that much. Now let's talk about the founding of Disrupt Tech. We started the show with the story of how you stepped down from Fowlery right during the pandemic to specifically start this fund, which is DisruptTech on C. And you stayed on the board at Fowry, but you're now at this point launching a venture capital fund in the middle of the pandemic.

What was the founding thesis, the conviction that said this is the moment to build an early stage fintech fund in Egypt? I had all the beliefs. That is my next step. I mean, after I finished at IBO, I felt that this is the best moment to step down.

And I had a passion, is that how can I support? So the first plan was to become an engine investor, to invest in startups and engine investors, sit on some board if I help every time. I'm very curious and very interested to support this startup closely. But I found out that the market is it's very early in the maturity curve, that it requires much more than just the engine investment.

It requires an institutional investment. And I found out that I cannot do it on my own. It is not only about check from my side that will make me culture that I or at least satisfied that I'm really supporting the company. So I found out that the best structure is to do an institutional fund and to talk to diversified type of NPs so have an infrastructure that aggregates value to the funding team of Amirstal.

So that's the same thing. Raising a first-time fund is hard enough in any moment, but raising one during COVID when nobody knows that the world economy is going to survive, that's a different level of difficulty. So, what was the pitch that actually worked for you? And who are the LPs that were brave enough to say yes at that point?

What happened is that uh I was just referring to that earlier in the conversation, is that people would need to believe in the new Aukasha. I mean, Akasha has been investor personally in Okasha, an opening. So the only way to do it was for me to start putting checks for my own money and create a small portfolio that shows if I'm capable to source a good companies and to provide the real value and ultimately uh appreciate for the evaluation. So I said, let's go for that journey, start to invest in five companies.

Meanwhile, go fundraising. I was um I would say a trusted person in the ecosystem in terms of people who believe that I can do something. I received a lot of interest from many people, but Malik Yahya and myself had a clear objective. We need an institution.

So individuals is good, important, but we need institutions if we want to build an institution fund. So we kept on talking to many, many people because of the time that a lot of uncertainty in the COVID time, and also because of the challenges related to this is a first-time funding team. We don't know how long they will be together and we need to see them in action. So we need time.

We could not have a yes from everybody. We need people also that take risks for us. The one important LP that really uh came on in a very short time and bit on us was IC. The good reason for IFC to join is that IFC was an investor in FAUI as well.

So they know me, they have invested with me. So uh they said, we know you, we want to invest in that market, we like the pieces, so we will back you up. I was lucky again because I see knew us uh from my history, so they came to become the first institution investor. Also, the government had a program with the World Bank that was designed to support first-time managers.

So they also were the second to join. So and and it it becomes it started to roll out. So initially, we were targeting a $25 million fund. That was our target, and we end up with the $36 million, which is an oversubscribed fund that uh also attracted a different institution investor.

Like so, just to give you a quick pre quick overview of who we have. We were also lucky to have all-type investors. So we have IFCM PACO and DFI, and we have government money, which is the program that the government was doing with the World Bank, and we have the Egyptian banks, so fund the fund the Egyptian banks have done and put money with us, and we had also uh family offices from Egypt, from the Gulf, from Africa. So we were lucky that we have all types of investors, and we learned each investor's mandates, each mandate's requirement, and how to make them all uh satisfied.

So it was a great, a great. Yeah. Now to be clear, none of this is blended capital. This is all at-risk capital.

Give me the full picture of what disrupt tech looks like today. $36 million. That's the size of the current part. The target was to invest in uh 27-28 uh early stage.

We are very early stage, meaning that we are the first check in most of our companies. Our thesis is to invest in fintech and fintech enabling stuff. So companies were building financial services or starting at traditional businesses by developing an embedded finance or an embedded payment within the product. So that was the thesis.

The focus was in Egypt initially. The journey started in 2021, first closing was in 2022, second closing was in 2023. So we had the loan, then the first closing at 25, and the second closing at 36 million dollars. We currently invested in 26 million.

The things that changed with us is that we uh started. At the end of the fund life to invest in Africa. So we wanted to test the opportunity. And again, the thesis of for investing out of Egypt was clear.

If you invested in a company, in a business, in a sector in Egypt, we understand very well. And we found an opportunity to repeat or to take our experience with us with the money and invest somewhere else. So that would be our right thing. So we invested in Morocco, we invested in Nigeria.

In businesses that we didn't did the same in uh Egypt in 2023, found that there is um, I would say, a trend and a revolution happening around AI. So with the approval of our LPs, we asked for permission is to invest in few AI startups. That is not fintech, but it's, I would say, a very innovative, uh disruptive ideas in the AI. So basically, the structure of the fund continued to be the same, the number of companies is the same, but we took a percentage to do AI and the percentage to do outside the region.

The rest was the same pieces that we started with. I want to talk a little more about your mission period change. There's lots of fintech companies out here. This is a responsible investment podcast.

So the reason why you're here is that you're not specifically some kind of an impact fund, but I think your specific problem that you're trying to solve is with your investing activities is financial inclusion. Can you comment on that? I have a comment about being an impact fund or not an impact fund impact investor impacting. For a financial technology in our part of the world, we are by default an impact fund.

For an impact investor. Why? Because we are not like other markets where the banking infrastructure is well laid off and there is an infrastructure that everybody has access to banking services and financial services. In our parts, I mean, I will tell you about how Egypt was when we started Faudi Formula, and there's still to a great extent not no much difference.

There is a number of people who have full access to financial services in between 10 to 20 percent of the population. The rest did not have access to a proper banking and financial service. But the issue is that because we did not have a legacy infrastructure throughout the ages, and because of the lack of, I would say, proper communication infrastructure in the banking infrastructure, we had a lot of limitations that is focused on the upper class society. A lot of people who did not have access to financial service.

When I mean access to financial services, I don't also only to lending or loans, but all type of financial service was not possible. I was telling you about people who do not have a way to settle their bodifunded people who would not have a way to buy airtime except through a scratch card. This is not digital service. I mean, this is we believe that we are doing two things.

One is that we are expanding the digital services to cover for the banking limitations in Africa through companies that are really including more people into the financial system. Second, which is very important to us, is that there is a challenge because any financial institutions, either traditional or non-traditional, have a challenge to serve the underbank or unbank part of the society because the cost of servicing customer that will deposit $10 is almost the same as still manga customers who have a thousand dollars.

So they end up by developing, I mean, even with the time of before the digital services, of course, people were focused on that because the low part of the city is costing me more. So I'm going to charge them more to cover my account. So we end up with an inequality. It is unfair that the person who has money pays less for the same services that the I would say the poorer part or the um unbanked population pay more to get the same service.

So if I get a loan from the bank as Orcasha, I can get it for a very low rate. But if someone needs uh hundred dollars and really in hard net, he pays double my interest rate because people say that it's high risk and the cost of collection and the cost of servicing is high. So that is not really fair. So one of the great things that we believe that we're achieving is that we want people who are in the service part of the society to pay a cost relevant or close to the upper part, and that's by developing a mechanism to lower the cost for the organization, financial service organization, so they can service these mass with a lower fees and lower charge.

So that's what how we believe that the impact is important in our part. But is that a central pillar for you? There's investors like Leapfrog, they won't go into an investment unless they're going to meaningfully impact X amount of people. And in the case of FinTech, it would be uh people who are on bank.

Do you have some mission statement or theory of change that specifically you're targeting those populations and measure against that? We do. Remember that I told you that we have a lot of developmental uh organization, investment organization on our LPs, or like IC and Poparco and the World Bank requires us to report on many PPI. So we do report, but most importantly, that we really think always about our investment.

Is this going to really make a difference? Is this going to be making society strange enough? Whenever we do that, it becomes a very good investment automatically because it means that you are really doing something right and investing in a place where you are affecting or making it uh convenient to people to do financial services. That's increased the likelihood of this business succeed.

Let me push back a little bit on that. Egypt's banking penetration went from about 14% to around 75% in a decade, which is an enormous inclusion gain. At the same time, real wages in Egypt fell 50 to 70 percent in US dollar terms during that same period. So someone listening right now is thinking, okay, these two numbers don't add up.

How do you think about that gap? There is a good reason for the macro to be challenged. You know that uh we went through double devaluation of currency throughout the last decade that really lowered the uh income level. But again, I was mentioning that the people who have low income were required to pay a high amount of cost to get access to service.

So uh if you have a lower your income is low or not increasing, at least you need to get the service at a convenient and low cost. That would make the relevance is make sense. With the with the effort that we're doing, us and others who invest in companies that are doing uh convenient financial service digital services. We are really bringing cost down to these people.

I just wanted to put that out there because fintech is uh a word used everywhere. But people in America are in Silicon Valley operating in fintech, are dealing with a certain context. But when you take that into your environment, it's like the people in America are watching black and white TV and you've got color because you got a whole nother dimension going on there economically in the background with the devaluations and the currency, and not only in Egypt, but in Africa as well.

So you've said something publicly that I think is one of the most important things that the VC in your space can say. You said that we do not invent everything that is happening in the payment industry has already happened somewhere else. And the important part is executing it well in your markets. That's the exact opposite of what every VC in Silicon Valley would say.

They worship novelty and they worship the thing that nobody's seen before. And you're saying that's not the game. The game is execution. Tell me why.

And if the game is execution, what does a great founder look like in your world versus a great founder in San Francisco? Very good to say that there is an African way of doing venture capital and there is a Silicon Valley way of doing venture capital. The market is different, the opportunities and the abundance of capital is different, the exit options is different. So when you invest in Africa, you have to do it the African way.

One way of describing the African way is to learn that the size of market and size of changes and the challenges is not going to make you operate in the same company way. So, meaning the type of founder that we are looking for is someone who can, as I described, facts in a very challenging issue, so handling a very challenging macro issues, uh, navigating through a lot of things in the environment around him, politically, economically, bureaucracy, things that are not within his control, and making sure that his business continues to grow and go to the point that he wants.

I always say to the founder is the ideas are for straight. I mean, there is no great idea. Do a Google and you'll come up with 10 great ideas in the financial system. The idea is to convince me as an investor that you are the best person to execute that.

And execution does not mean that you only execute in your company, but being able to navigate, as I as I say it, through challenging environments. And this what I've seen in Fowry, and that's what I've seen in most of the successful entrepreneurs who have done, is that there is a lot of things that you have to think about. And a founder in Silicon Valley or in Europe or in the States, wake up in the morning, think about his business only. But in our part of the world, he thinks about many other things.

Lots of his business. What is the currency? How can I source currency? How can I manage to get an approval in a certain way?

So there is a lot of things that's different here. You've also made the argument that Egypt is the gateway to Africa and the GCC. 110 million people, deep talent, sitting between the Gulf and the African continent. But I I interview people every week, and I've heard the gateway argument from a lot of countries.

So convince me uh here and now why Egypt and not Kenya or Nigeria or Saudi Arabia. It's a big country and it is very diversified in terms of um classes of society. This is this country that you build up. Why?

You have talent and you have operational challenge. So if you build a product, execute it very well, and you scale it, that means that this product has been tested in the most challenging environment. And only a decent size. For example, if you want to build a product in Jordan, how big you can scale, versus if you build it in Egypt.

If you build a product in Tolus, how difficult or how comfortable you are if you want to take it to a bigger market. This is vice versa in Egypt. In Egypt, and then you build it with a mind. Of course, you have to build it with a mindset is that I want to build a product that goes regionally or goes globally.

But ultimately, you have the best environment first to execute the product uh at a very low cost because of the talent, and to test it operationally on a large customer base. I mentioned Jordan and um and Tunis because they have a great talent, but it's a very small market. So there is a limit to what you can test uh at scale in such an environment. So walk me through your investment process and start at the top of the funnel.

How do you define your investment universe or source your potential investments? Explain to me what's in that universe and what's out, and then walk me through your screening filters, of course, financial, but also non-financial, as we spoke about the impact aspect. And I'm especially curious about one thing because I think this is your unfair advantage. How do you evaluate a founder's ability to navigate regulation in a country where the regulatory landscape can shift almost overnight in some cases?

Let's start by saying that the regulatory environment in Egypt have and in Africa in general have improved a lot throughout the last decade. So we're starting with a place where most of the things were not approved, nothing is possible. So a place now that many things are happening, and many things are happening because the people in or most of the regulators in Africa have realized that this is a new era, and the digital economy is very important to the country's prosperity and to the maintenance of services that they are offering to their citizens.

So we have become very open to ideas around the digital services and the digital financial services. So we are now in a good place. I would say it's a completely different from where we started. When we started Faulry, and maybe before that, it was a completely different uh logic.

Maybe that the regulatory challenges is not the one that I would be worried about because now we are in a different place, and people who come to disrupt tech to make money knows that we can help in the regulator in the way the regulatory framework is needed. Helping is not necessarily allowing them to get a license because sometimes what you should do in such a part of the work is to decide when to go to the regulator and with what to go to the regulator. And this is something that we know very well, and we can help them more.

But the other challenges that we want to say is I want a founder that has a bit of a track record. Again, because we are listening from Silicon Valley, we don't want a founder that is just graduated from the university. Not meaning that they are bad, maybe they are the smartest, but they need some type of execution track record of operational experience to be able to build a company in a challenging environment. So the one thing that you want to test and you want to be convinced with is the credibility of the founding team to really operate.

Because knowledge a great product and taking a company from zero to one is not extremely difficult. It is possible, it is difficult, but it's not extremely difficult. What is very challenging and almost important to take it from one to hundred. This is where the operational know-how and the uh some execution and maturity is needed.

So that's what we test. That's what we feel that we need to test as a traffic team is to be convinced that the founder sitting on front class is capable of doing that. One thing about good and bad, there is no many DCs in our part of the world. So there is a lot of founders out there, uh limited number of DCs.

So you are we are lucky that we are approached by founders every day. So that's another way of getting extra stock open markets. Second is that because we have a network of people, we invested with them before and they were appreciating the value that we're adding. They recommend for us any other than others.

The third one is that working with the early accelerators and I would say the incubators that they get the market in also another screening went. All of that provides a lot of pipelines for us. And also we see some of the corporate guys who's leaving their corporates or leaving the startups that they have joined very early and grown to a C11 and coming to the market. All of that will generate for us a great big boy.

What we have to select then is that we go through a scheming process that ends up is that we want to first have an excellent funding team, or what we call class A or Class B plus funding team. And we need an idea an idea that is really possible to execute in that market. So ideas are not possible to execute, or at least it's it can be ahead of its time. So that's where we challenge the time to execute them.

The one important thing is invest in it in a team and find out that they are able to raise money from other investors or not. We found out that this is an important criteria as well, because sometimes they are very good executioners, but they cannot raise money. And if you are very bad in raising money, that is really uh a disadvantage, a big disadvantage in terms of the market. Other thing, criteria that we put for ourselves is that any company that we wanted to put in money, it has to build a product that can be usable beyond one market.

Uh, and throughout the uh the last few years that we invested, we managed to excuse very well on that. Many of our startups that we invested in currently sell uh their product to custom markets outside Egypt, either BCC or Africa. And some of them have the majority of their clients outside. So the formula that we found very clear for us is that the back office is in Egypt and the customer is everywhere, either in or whatever.

And that brings us hedging against the challenges and the currency devaluation. When the currency devaluation happens, it works for that company for the startup payments because the cost pays is in HP and the revenue is mixed between different currencies. What we found is quite uh again resilient in our part of the world. Here's a question behind the question.

You have a deep personal relationship with the central bank of Egypt. You sit on the Prime Minister's advisory committee. That's an extraordinary asset for your portfolio of founders. But if I'm a founder who's not in the disrupt tech network, that same asset looks like a wall.

How do you think about the difference between being a bridge and maybe being a gatekeeper? In the advisory committee. So there are many other members in the advisory committee. So we are it is there to present the ecosystem in general.

So there is a way, yeah. I mean, there is no advantage of being in that committee except that you are actually dedicating time and uh to advice and to help in shaping what's happening. The relationship with the central bank, the regulators in our market have really gone far beyond the expectation in terms of supporting the ecosystem and very being open. So the central bank can meet anybody.

It is, I'm not saying literally anybody, but I mean they are very open to meet uh startups and supporting them. It is not about the relationship, it is understanding how exactly you prepare your file to go to the daily and the timing and what exactly you're gonna, because sometimes you have a great idea, but you put it in a way that makes them very worth it, or you put it in the wrong time. So you get a no because they don't understand it when you don't feel it is right time for them.

So being experienced in what to do, uh not to be fall in the trap of being writing them is important. So that's what we do. I mean, advisory rather than relationship. Okay.

Let's talk about your portfolio a bit. You've built the portfolio around uh four different pillars. One is financial infrastructure, another one is financial services, and uh third one maybe strategic adjacent sectors, and lastly, emerging technologies. I want to understand the system here.

How do these pillars connect to each other? Because the interesting thing about your portfolio isn't exactly the individual company, it's the way they seem to make each other stronger. So explain to me that system, like I'm seeing it for the first time. Basically, we look at the financial services as an ecosystem and say we want to develop all parts of the ecosystem.

So we start from the infrastructure. So um when we need infrastructure companies who are providing the banking as a service, the part of the service, the lending as a service. So that's the what we call the infrastructure board. Uh then we look at the uh components of the service, lending, saving, and pay back, and say, what can we do in that space?

What can we do in that space, and what is needed in that space? For example, we found out that the market for the insurance, digital insurance, is not well penetrated. So there is an opportunity here. So we start screening companies that operate in that space or possibly planning to penetrate, right?

Choose from them who are the best pets. Uh, digital lending as well, digital savings. So basically, as if you are building a digital bank, thinking about all the components of what the digital bank should have and starting to back startups in different line of business. And that's how we create a diversified complementary portfolio that naturally, because of our relationship with them, they work together.

They found areas of cooperation and areas of uh collaboration. All right. So, can you give me a concrete example of the portfolio synergies at work and walk me through one of those partnerships? You know, how did it come together and what does it tell you about cross portfolio value creation as a competitive mode around your portfolio?

We have invested in a company called Muzera. Muzera in in Arabic called Farmer. So this is a company that digities for building an infrastructure for the farm in Egypt to allow to connect the off-takers to the farmers and allow for uh payment solutions for them to digitally pay each other and transact with the um with the dealers and the farmers agro uh for for inputs and uh a lot of things are of agriculture. So this is a company that wanted to issue cards for the farmers so they can get paid on this card.

Uh another company called Connect Money who are doing part as a service. So in the state of Mozara, going through a process of building a complete financial infrastructure and get a license and get certification for the license, which can cycle take them a year or so. They want to connect money and that we want to use zero infrastructure as a service. So you manage the license for the financial infrastructure, the certification, and we get to focus on our customer by servicing our so they issued uh a card that has Mosera.

But it is a card that is managed on the back end by Connect Money. That's why another example is that we have a company uh called Booker who are building a saving product and also building a venture debt platform that allows startups to get access to venture banks. Beside with a company our company, a company called uh iSupply who is doing a P2B market pharma marketplace. Instead of iSupply going to banks and building uh a case how to get uh working capital finance, Bukra will become the lender or the venture capital that would do what you call uh a revenue-based finance with them.

So they provide them with uh working capital that is based on revenue share. So these are type of companies that have already built the product in general, and because the companies found a cooperation spaces and we encourage them to work together, we not only make the introduction, but actually trying to build the product within each company that is serving many companies of our portfolio. How does that come together? Uh is that primarily you and your board initiating that?

You guys see this, or is it more grassroots that maybe they're already speaking together and you end up making investments in both of them? Happened this way. I mean, you're they're already working together, and it happens that we invest in both companies. Uh, but the majority of the cases is that we are making uh more of business meetings together with our portfolio when we string all the CEOs around the table.

Uh sometimes we take them on the upside for two days outside of Egypt and discuss business opportunities together. So through these meetings, the cooperation opportunities happen. So they keep on engaging together, discussing opportunities. We keep on, I would say, inducing conversation in a way that's saying, why don't you think about doing this?

What do you think about us? Ultimately, our role is will continue to be advisory. So we don't push, but we open ideas, and we found that automatically, when a good idea is there, it finds its way to exclusion. I want to go somewhere else in your portfolio now, somewhere maybe slightly uncomfortable.

You have portfolio companies, Alan and Lucky, and these companies extend credit to people who are underbanked. And these are people living through 70% food inflation, a currency that's lost 70% of its value, real wages that have been destroyed. And the history of microfinance is full of stories where access to credit ended up becoming a trap for some people. And I'm not saying that that's what you're doing, but I want you to tell me where is the line?

Because I think the line between helping someone and hurting someone with credit can be, in certain cases, razor thin. What are the specific things or rails you've put in place across the portfolio to make sure that you're on the right side of it? Let us first say that the low compared to other markets. I know very well where we're coming from with that question.

I mean, because there are other markets in Africa who went very far in that space. So they end up with a problem that. But I mean, in Egypt, the ratios are very low. So it's still within the control.

So actually, what these companies are doing, exactly what I was expecting from them, is to increase the base, to enlarge the base of beneficiaries that have so reasonably cost uh. By the way, we have in Egypt what part of the regulatory mandate is uh a credit bureau that is mandating every customer to go to a credit bureau check to check on the limits that was offered from all possible lenders in Egypt. So, in a way, uh there is a control, a global control, that uh a customer will not be able to get a certain roles beyond its capability to repay.

However, in general, the most of these people, the companies that are doing aggregated in the market, either in our portfolio or uh their loan books are much, much lower than the total GDP. I mean, compared to other ratios uh in Africa, we are Egypt is very low. So we believe there is a problem that could happen, but with the control and the awareness that's happening from the regulator, it could be mitigated. But at this moment, we don't feel that there is a big problem.

The biggest problem is how to make this accessible to most of the people at a reasonable cost. How does DisruptTech actually measure impact internally? Do you have a formal framework, something like the IMP's five dimensions or the iris plus lean data with customer voice interviews, or is it assessed through the portfolio's aggregate reach numbers after the fact? And I'm asking you because I think the answer will tell a lot about how seriously a fund takes impact versus uses as marketing language.

How do you measure that? What's your approach? We have to first we have to report on distant PPIs and our impact to our LE. So that's part of our portfolio construction in that when we build our portfolio, uh, we continue to report on these numbers how we how much jobs that we created, how much women that we hired, how much that we did in that space, how much people we covered, how much we included.

So continuously we are measuring that. And by measuring, this is the first step for us to say that we need to improve for certain KPIs that we found that we are not delivering them. We have an officer dedicated within the team that's doing only MPA measuring and doing PSG reporting. So that's part of our work.

And uh although that we are a small fund, but we build from day one to be an infrastructure for a bigger and following fund. So that's exactly what we're doing is that although that the officer is for our size, maybe that's not very efficient, but we hired it from day one. And their job is to big to monitor that and to advise us on what to do to improve KPI. You've described your leadership style as backseat leadership, influencing outcomes through value creation and partnership rather than any kind of formal authority.

And I don't know many fund managers who are that intentional about not trying to control things because the operator to investor transition is one of the hardest in this business. You spent over a decade building Fowry with your hands. You know how to run a fintech. How do you resist the operator's instinct to grab the steering wheel from your founders when you can see them about to make a wrong turn that you've already made?

Which is a very good question. But I mean, what I did is that this is my style throughout my life. I have been always a back seat leader, even in the company with a lead. It is difficult, but it is one of the interesting ways.

I mean, if you can manage to direct people in the in the right direction without really giving them orders, not achieves the drugs. I don't mean to say that this is the only way. There are people, very successful people who have done it by being dictators in the way they do business. And this is a very successful model.

But you have a choice. I mean, this is how am I. I mean, I rather I like to lead by giving the people the opportunity to make decisions and convince them rather than order them. It takes time and it takes effort, but ultimately it allows you to do, for example, supporting many people and many advances, because if you take the leads on uh with yourself on the hand, there's a limit to what you can do by yourself and what makes you.

So maybe managing one company you can do it this way, two companies, but if you go for 26 companies and you want to support them all, it's it's really impossible or impossible to do it without being a backseat leader and advising, supporting, explaining options, telling them what could go wrong if you took this strategic move, and then it's up to them. They will make mistakes, but they will be much less than if they are on their own. It's already costing us, it's already costing me.

I mean, because it cost me money, sorry, it cost me time, and it cost me a lot of effort. Yeah, it takes time. It takes time to instead of telling someone do this, is to sit with him and explain why this is better than this, and explain the different strategic options. So it always takes time to be executed and always takes much effort because you have to communicate, explain, and gain trust.

But again, it's an approach that you have to you you you choose your way of doing it. Let's talk about going Pan-African. You referred to it earlier, but we didn't really drill down on it. In June 2025, you made your first sub-Saharan investment back in lineage farms in Nigeria.

Then November 2025, you invested in Chad and Morocco, which is a Y combinator back company. These are two very different markets, two very different regulatory environments. Walk me through those decisions and what's the thesis for taking this ruptech beyond Egypt? We found out that it's topic that we have actually naked knowledge and a lot of experience that we can pass to our Congress.

And because we have chosen a path, that we are not just an ambassador, we are a value-added investor, and we develop a good reputation in that space. To do that, we need to add value beyond money and a significant value to the firm. So we put a strategy is that because there is a lot of companies in Africa that calls on us in Egypt, believes that Egypt, because of the size and the maturity and the a lot of things about Egypt, that is a place to learn from. So we said that this we make sure that when we invest in Africa, we have certain criteria.

So, one, it has to be a business that we did very well, understand very well, and we did it before. So that means that we understand the business. Maybe we don't understand the market very well, so we co-embut with others who understand the local market. But we have to be very act very well or expert in that.

Second, we believe that there is a time in the journey of the company where the company really needs us or needs the value from us, and that would translate in us being a board member in these companies, regardless of the ticket size. Maybe we have 1%, but still we are a board member. We have 10%, but we are a board member. So if these criteria are achieved, then this is a good match to us to do an investment.

So we don't invest in Africa like we did in age camping. For example, we don't invest in Africa as an early check or first check. We don't do that because we don't understand the market like the locals, but we come a bit later with a certain value that is translated in being very close to the founder as a board member. And so we have a clarity that we understand the market very well or understand the business very well, and we can help you to scale and take a bit of a strategic.

So that's the criteria, and we did this exactly execute it twice in two markets and so which parts of the Egyptian fintech playbook actually translated successfully into Nigeria and Morocco, and which parts did you have to throw it out entirely? And strange enough that Africa is very similar to each other. The problems, the macro challenges, the currency devaluation, perhaps the young population, the digital connectivity. So there is a lot of similarity between the markets.

However, of course, there is a local difference in each market in terms of how to navigate, regulature, sometimes. But the playbook can be transferred with some customization. And again, because Egypt is a big market, so probably the problem that startups have facing Egypt uh at least 80% of that problem can be useful to other startups is building in other markets. Egypt is ahead, for example, from some markets in certain places, as if that you have seen the movie before.

Or you can tell them this is what's going to happen next, this is what's going to happen next. So you have to be prepared for that. So that's how we see Egypt can really bring a lot of value as an ecosystem to other markets in Africa where we see this is a bit advanced in the industry. Let's talk a bit about exits because at the end of the day, this is what determines whether the whole model works.

And you have a perspective that almost nobody else has because you've been on both sides. You took Fowry through a landmark IPO as an operator. I guess you weren't there the whole time, but you did the preparations. And as an investor, you had your first exit.

It was about a year ago, which was acquired by Max A B last year. So tell me, for an LP looking at MENA and Africa right now, what should they expect? Is it more IPOs like Fauri? Is MA the realistic exit path for the next decade?

As you mentioned, we haven't demonstrated both. So we have been part of the story of an IBO, Fowry, and hopefully very soon with one of our contributors will go into IPO. And there is a merit and acquisition like we did with Matura and potentially with other companies that are going to be acquired. The difference is again back to what I call the African way.

This is a different market dynamics and different market exit options. So you cannot take the Silicon Valley or India and bring it to Africa. The exit options are limited. So you have to be disciplined in the entry valuation to be able to allow potential successful exit the third money.

So you cannot come and invest in a unicorn and assume that you're gonna be at Dickacon. So he may invest in a company at 200 million valuation and say that this is possible to reach a unicorde. Yes, you can do that. You can invest in a company's at five to ten million dollars and assume that I'm gonna sell it at 60 to 80 million dollars.

But you cannot assume that company in our market can be acquired at 200 million dollar valuation. It can happen, but it is a very limited option. So you have to build it. That is because we are in Africa and the exit options are limited, you have to be disciplined from day one, how, where to come and when to come, and at what valuation, so you can exit successfully without being locked in a company.

The other thing is that the IPO market in Africa, I'm not thinking about Egypt because I think in Morocco, I'm THE in Nigeria, is developing very fast. And there is an opportunity to list companies in local market and bring the international investors to invest in that local exchange, not to wait for a company to grow and to be listed in one extra exchange for them to look at it. There is a maturity and there is a potential for listing in local currency. And this is something that we everybody was had to encourage.

I mean, we have to encourage good companies to list locally in either of the exchanges in Africa. And that will improve the exchanges potentially for them and for the other, for the next one, and increase the liquidity as well. I see that what is changing, that there is more opportunities for a local listing that was not there before. You said publicly that artificial intelligence will be a central theme for disrupted going forward.

You have a portfolio company, Widebot, which launched AQL 7B, which you've described as the top performing Arabic language model at launch. And it's now being hosted on local cloud servers inside Saudi Arabia for regulatory compliance. Where do you see AI creating a durable advantage in financial inclusion specifically? And then what part of the AI cycle in emerging markets is real and what part is imported hype?

AI is happening anyway. AI as a revolution is happening all over the world. Our region has the choice to be part of that or to be out of it. So there is the first part, which is the hardware infrastructure, that I think is very difficult for our markets to be part of it.

Maybe the GCC have an opportunity to participate in that because they have they own the energy. And the energy is a very important component in that layer. So they have a potential to be an investor in that. Okay.

Africa does not have that. Okay. Second layer is the software and large language model like ChatGPT and the similar. Again, this is part that is already heavily, as a from a B2C point of view, invested in from other parts of the world and very difficult to come.

Similar to what is doing is that we found an opportunity that most of the uh governments in our region started to think about the sovereign data and the localization, and they wanted their data to be on soil. Because the Arabic is a very dominant language in our region and continue to be. So if you manage to build an infrastructure that achieves what the government in our region wants, to build their own large language model locally hosted, and build an infrastructure that is superior in language it must come because you have an opportunity.

So this is where White Bots have captured, and we think. But do you think that there is many of White Bots can happen? I don't think so. It's one specific company that I took advantage of a specific opportunity at a specific point.

The one that is very open for others, that the second layer is building an AI agent product. So moving from a recommendation to an execution point. So building a company that takes a traditional way of doing business and using the tools that are available globally, so they don't have to own the infrastructure, but using what is available to solve a problem in a way that was not possible before the IE. I I was always referring to an example of Uber.

Would have never been possible to exist if there is wasn't a smartphone. So that smartphone is an infrastructure that Uber had used to build innovative product. Similar to companies who in the e-commerce space, that if they, for example, PayPal, if there was no e-commerce, there would not be blocking policy. So there is a window opening now for African market.

There is an AI opportunity. If you build a street uh product or solution that is capturing the infrastructure now, and you have the time to be ahead of the market competitors, you have a great opportunity to be a regional or a global player in that space. So that's another percentage to exactly matching our thesis is build something locally and get your customer everywhere in the world. So step back now and give me a bit of your broader point of view.

What needs to happen to mobilize significantly more commercial and impact capital into Egypt and into Africa. Is it more about proving returns and that it's doable? Or is it more about changing regulation? Or do we need to create more blended finance vehicles?

What is the bottleneck, or is it all the above? For asking this question. I mean, it is about proving returns. We have been promising investors from all over the world that Africa is the land of opportunity.

It's the best place to make money in the emerging market. But actually, that was not happening in the way that everybody would expect. So there was sort of a disappointment that's happening from the commercial investors because of the challenges, the macro, the currency, and anything else, that the the returns were longer and not to expectations of transmercial investment. So I'll go back to my point.

I mean, if you want to invest in Africa, you want to invest in the African way, which means you have to be disciplined about entry valuation, exit potential, exit options. If you think that you're gonna have many unicorns, I mean we have all in Africa around eight. I think India has multiples of those and double, and multiply that by number X number of that. This is Africa.

Invest rationally, invest in the African way, you're gonna make a lot of money. But if you think that Africa will be similar to India, similar to Silicon Valley, similar to Europe, probably you're not gonna make money because you're gonna come very at a very expensive education. Baker, which you've referred to in our conversation as one of your portfolio companies, is building sharia compliant wealth management products for an underbank Muslim majority population. Western impact investors and Islamic finance practitioners have historically operated in parallel lanes.

Do you see those lanes converging? And do you think Western impact LPs are fundamentally under-allocated to the Islamic finance intersection? Let's look at from a pragmatic point of view. This is a market that's very underpenetrating.

There is a demand for certain type of product, and someone has to fulfill it. And if you are smart enough as a startup to build a product around Sharia compliance, there is an untapped market for you to capture it without a lot of competition. So not talking about Egypt. If you look at it, we're surprised that there is a huge demand in Nigeria.

There is a lot of demand in many parts of Africa for such a product. If you look at from another PMV, I mean look at H HPC, for example. How much that HPC revenue comes from an Islamic product, you'd be surprised that it is the double digital. Why?

Because they're serving in markets that have this demand for this product. So this is an opportunity very pragmatically that you need to capture it and you need to build a product around it and give the customer what they want. And because as Egypt and the GCC have the advantage of being very experienced in that, so we Bokla was taking an advantage of being expert in building a Sharia compliant saving product and doing it again in the market in Egypt where they can build and execute and very efficiently, and then take it to other markets where the demand for such a service is still high there.

You've said that fully eradicating cash in Egypt is a dream that will not come true. What's the uncomfortable truth about financial inclusion that the industry doesn't want to hear? It didn't disappear in any market. So uh it is not about uh getting rid of cash, but it's efficiency margin cash.

You repeat a phrase to yourself every single day that your first boss told you. What is it and why does it still matter to you after 30 years? You don't fail until you stop trying. This is a key in the any successful person agenda.

You have to continue trying until you reach uh what is successfully. And why does it still matter to you after 30 years? Because life will not stop to challenge you if I have to go through that challenge every day. Mohammed, I've got some short answer, rapid-fire questions for you before we wrap up.

Don't overthink these and just give me whatever comes to your mind. Or if nothing does, feel free to take a pass because that's okay too. If you had to name the single most important challenge in the emerging market fintech venture capital space at this time, what would it be? Enough access to habitat in this space.

What do you know now about emerging market fintech VC investing that you wish you would have known in 2020 when you founded Disrupt Tech Ventures? Don't get impressed by names and investor names. So no matter how big is that, do your own work and don't count on big names. You don't have to name names, but can you describe an investment that you have made in your career that you were convinced of at the time you invested that it ticked all of your impact boxes, but in the end it didn't turn out.

And what were the investing lessons learned from that experience? Our early stage, uh 50% of the uh investment that we did was taking old boxes, but it's too early to judge on how they were executed. Another thing is that I've heard from one of the expert as investors, an investor is sitting at a bus stop, and good opportunities will continue to come. So uh don't regret anything.

Now, the converse of that, describe an investment that you had some level of skepticism about, either at the time you invested, or maybe you ultimately passed on it because of your skepticism. And in the end, it turned out way better than you thought it would. And you were pleased that you invested, or if you had passed on it, you wish you hadn't. And what were the investor lessons you learned from that experience?

The most important lesson is build a company, a good company, and ultimately the valuation and the turn will come. But focus on the company as your main goal. If you focus on the valuation and the investment and the return, you'll probably beat the same. Back to the uh you always get surprised by company performing much better than you did, on companies much worse than you believe.

And that would happen. And the only way to mitigate that is building a portfolio, a larger portfolio in every stage, so we get a decent return from the ones that you make. If someone wants to get into the emerging market fintech VC investing space, how would you advise them to start? Invest in the Picton 2.

That's the person I again. I mean, back to the same thing. I mean, please remember that Africa is not a silicon bar. There's a lot of younger people in their career who maybe decide, I want to be like Mohammed.

How can I learn how to be a VC investing like you do in Egypt and then Africa in fintech? I will be a bit biased. So I will I will ask you to come and work for a fintech startup for a while and be part of an operation first before they become an investor. But that's so you believe someone needs to have operating experience.

They just can't come at it from going working at Goldman Sachs or somewhere for a while and then kind of parachuting into a VC. Yeah, of course, yeah. As I said before, I'm biased, but I I think that this is the best way to learn and to understand the market dynamics is to work for a doctor for a while, see what's happening, and then you are the old position set on the other side of the things. That's great.

This has been really enjoyable conversation for me, starting with your journey from Raya to Vodafone, and then building Egypt's first tech unicorn and now deploying capital through Disrupt Tech into the next generation of fintech founders across Egypt and Africa. It's an extraordinary art. You're building something genuinely important here. Thanks for taking the time today to dive deep with me.

I've learned a lot. Thank you. Thank you for having me. Thank you, Roman.

Thank you. Before we wrap up, tell everyone where they can find out about all the great things you guys are doing at Disrupt Tech and connect with the work that you're doing. I think the best way is to go to our uh website and to follow us on LinkedIn because we can continue to post what's happening in the market in the ecosystem. And we will very soon we will be developing more content on our LinkedIn to tell people what we are doing.

And your website is what's the URL? Disruptechventures.com. All right, just like it's spelled, nothing fancy, disrupt techventures.

com, right? Yeah, yeah. Okay. And uh what's the best way for someone who is interested in reaching out to you to get in touch with you?

I think the best way is LinkedIn. My name is Sayyid Okasha. This is my name on this in the best world page right. We'll have all that in the show notes.

So perfect. Everyone should definitely go and check out disrupttechventures.com for Mohammed's investment work and follow Mohammed on LinkedIn. And Mohammed's name is spelled like it sounds M-O-H-A-M-E-D.

And his surname is Okasha. That's O-K-A-S-H-A. So, Mohammed, thanks so much for this. Anyways, thank you.

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