By Mohamed Ahmed
Four financial institutes have expressed their desire to participate in Sawari Ventures Fund (SVI) for risky capital over the first closure of the fund’s path, according to Wael Amin, a partner at Sawari Ventures Company.
According to Amin, these four finance and funding entities are the World Bank, the European Investment Bank, the Social Fund for Development (SFD), and Ayady Company, launched by the Egyptian government last year for participation in initiatives and investment projects.
Sawari Ventures announced the launch of SVI during the Economic Summit, held last March in Sharm El-Sheikh, with capital worth $50m. The goal was to invest in the emerging knowledge-based companies located in Egypt and South Africa.
The fund specialises in investing in the third phase of emerging companies, known as project incubation, which is activity practiced by the Flat6labs platform, affiliated to SVI. This step was taken after passing the second phase, which witnessed the entrance of a main investor, “Angel Investor”, to offer funding for the project. This second phase is to enable the project to enter the third phase of growth.
Amin said that Sawari Ventures has yet to reach an agreement with these four entities regarding the shares. He added that the company is still undergoing the advertising phase for the first closure between a group of Arab and Egyptian investors with high financial solvency.
Amin added that the fund’s first closure is on hold until the end of the year instead of next September, so the company can collect the needed shares for the fund. This is particularly as the company is investing in projects which are highly risky. In return, it will achieve high growth rates.
The fund’s investment strategy depends on offering funds starting from $500,000 to $5m. It targets the companies that achieve a technological added value in the education, health and industrialisation sectors. On the other hand, it avoids the sectors of consumption, retail and real estate investment.
Funds involved in risky capital are the most significant funding mechanism which helps emerging companies by funding their projects, especially in terms of the innovative and creative fields. This is due to the difficulties in asking for traditional funding methods offered by entities such as banks. The company has, until now, invested in more than 80 Flat6labs companies. Sawari Ventures, as well as its affiliated funding stage, are still emerging.
