OUR FOUNDER OF THE WEEK– Every Tuesday, Founder of the Week looks at how a successful member of Egypt’s startup community got their big break, asks about their experiences running a business, and gets their advice for budding entrepreneurs. Speaking to us this week is Ihab Shafey (LinkedIn), CEO and Managing Director of Solarus Egypt, Solarus Smart Solutions, and co-founder of Manex.

I’m Ihab Shafey and I’m the CEO and Managing Director of Solarus Egypt, Solarus Smart Solutions (SSS), and co-founder of Manex. I graduated with a degree in petroleum engineering, and when I graduated in 2000, I started my career, it wasn’t in petroleum — instead, it was in my passion, which was IT. I started out working here in Egypt in the IT sector before moving to Kuwait, where I continued my career in IT for 17 years. For the last 10 years of my time in Kuwait, I worked at GBM. I also lived in Dubai for several years, and by the end of my time there, I had become senior partner for the Middle East and Africa at NCR.

In 2021, I decided it was time to come home to Egypt and set up a private business with my partner and cousin, Tamer Soliman. Tamer is actually the one who convinced me to make the shift. We started by establishing Solarus Egypt as a holding company with private equity in several companies and businesses, including hazardous waste management company Wekaya and Alexandria Medical Center — although we sold our share at the beginning of this year — to name a few. Then we set up Solarus Smart Solutions(SSS), which is 49% held by Solarus Egypt.

Manex is the product of SSS. Manex — which is shorthand for “manage expenses” — was created for B2B clients to manage their costs and expenses and help them move into a noncash system. We created Manex because the solution we provides was clearly working with the direction of the market. What we do with Manex is offer companies our cards, which they then distribute to employees who have business-related expenses, and our system is used to very clearly manage how, when, and where each employee is able to spend money. The typical setup for companies is that they hand an employee some money — or a regular corporate credit card — and that employee is sent out to buy certain products, then return with a tax invoice and proof of payment, which the accounting team then has to verify and ensure it was spent for the correct purpose. This typical setup is a massive headache for all parties involved and is also a huge drain on time and resources. What Manex does is that it consolidates this process and provides controls and limitations that are highly customizable.

We classified products in the market into categories, or policies, that are associated with payments. These categories or policies can be items such as fuel, food, stationary items, furniture, etc, and each category is highly customizable. A supervisor can select the specific products offered within these categories through our merchant network and make them available for purchase through a Manex card given to our employee. Each card can also be customized with more than one “policy” and with variable spending limits, as well as with rules on when this allowance can be spent, the frequency of use, etc. It’s smart enough to know and provide these limitations.

The best thing is that the employee with a Manex card doesn’t actually hold money by having the card. There’s a silo for the overall company and these policies control how much each card withdraws from the silo. Manex is pre-settled, so there’s no need for accounting to verify payments. You can get one invoice — an e-invoice, even — per merchant, rather than multiple invoices for multiple transactions. Our system provides advanced ERPs to pull these tax invoices together and automatically put them into the system. All of our procedures are aligned with Egypt’s tax laws, and you can prove these payments to the Egyptian Tax Authority.

I never planned to spend my whole life abroad, and I really felt like it was the right time to come back and set up a business here, especially because I could see that there are lots of business incentives — particularly for fintech. On the business side of things, I could see where the market is headed and its ability to change and adapt, as well as the overall supportive environment for fintech. On the personal side, I wanted to bring my family back to Egypt and have them live here.

My “sacrifice” in setting up my business was giving up an executive position — but I’d rather say it was a challenge. The hardest challenge is to make what you’re doing actually work, which took up plenty of time, attention, and stress but now we’re successful.

The best part of my job is offering solutions and solving the problems and challenges we have. Providing tax invoices, for example, took a lot of effort. It was a lot of work to align our solution with the law to provide customers with the right solution at the right time. It was also challenging to penetrate the market at the beginning and build a name, and prove to potential customers that we’re offering a secure solution.

If I could give a future business owner just one piece of advice, it would be: Plan. Don’t just pop up and launch without proper planning and thinking. We launched on the ground in 2022 but actually started planning our solutions and everything in 2020.

We track our performance on a quarterly basis. Our biggest KPIs include the gross merchandise value (GMV) — how much customers spend through our system — and the number of new customers per month, because these are key indicators of growth. We also look at how much each customer consumes from their wallet or uses the system, and there’s a specialized index for this. Our numbers for GMV are stellar — in the first eight months, we went from EGP 30k to EGP 5 mn. We’re now approaching EGP 12 mn and we’re expecting to hit EGP 50 mn by 1Q 2024. And although we’re thrilled and thankful for the success, this exponential type of growth was in the plan because we were selective with our customers.

Manex was all self-funded. We don’t need external financing, but to be successful, you have to have exit criteria. Tamer and I have already put in place an exit plan, which is to let a big investor step in with us and share the business, and then eventually take over the management while we retain a 30-40% stake in the company. That stake would be like an early retirement present [laughs]. This might not necessarily happen right now, but we have the plan in place to pull the trigger whenever we decide it’s time.

We’re currently in negotiations with two big investors, but we’re not looking to just raise money, because we don’t need money. We need somebody to help us grow in the market and bring us value.

Manex is in active discussions to expand beyond Egypt, specifically in the MENA region and in Africa. Expansion in other markets — including Europe — are also in the cards, but at a later stage.

In my down time, I like to swim. Swimming is my favorite hobby — it relieves so much stress, and I don’t like sports that make me sweat [laughs]. Even if I had a loaded day, once I go swimming, I feel like I’ve been reset. And, of course, I love to spend time with my family, especially my two daughters, who are growing up quickly

I read a lot, but most of my readings are specific to business. I’m not the kind of person who likes to because I enjoy reading, but rather because I want to learn something. Some of the great books I have read and can read multiple times are the 48 Laws of Power and Seven Habits of Highly Effective People.

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