Funding for Egyptian startups came to an abrupt wartime halt in March, with only Egyptian-founded, US-based Hamilton Labs clocking in an undisclosed investment, according to Launch Africa Base. The sharp slowdown follows a strong start to the year, where Egypt — one of the region’s most active countries — saw upwards of USD 100 mn raised across numerous transactions in the first two months of the year.

It was a similar story for the continent as a whole, with African startups raising just USD 67.3 mn in disclosed funding in March out of a total of USD 554.5 mn for the entire quarter.

But “the real story isn’t a funding freeze. It’s a flight to quality,” Foundation Ventures Managing Partner Mazen Nadim tells EnterpriseAM. “The March slowdown is primarily a function of LP capital allocation timing, not a fundamental shift in Egypt’s investability,” Nadim explained.

The first quarter is typically slow for African VCs, as institutional investors finalize prior-year commitments and set new deployment plans. This seasonal lull was amplified in March by regional geopolitical uncertainty that created “short-term risk aversion among crossover investors” and “Egypt specific FX recalibration as the market digests post-reform valuations.”

Nadim also cautions against over-indexing on public data points, noting that transaction volume has not collapsed so much as it has gone dark. “The one investment data point is misleading. VCs are still writing checks, but founders and investors are keeping terms private during a volatile macro environment,” Nadim explains. “The bar for new [transactions] has risen, but the appetite remains for the right companies.”

Startups with export potential or USD-denominated earnings are reportedly commanding 20–30% valuation premiums over purely domestic plays, serving as a natural hedge against EGP volatility, we were told. Despite headline risks, Egypt’s structural case has also strengthened following FX reforms that removed the primary barrier to entry for foreign funds.

“Activity rebounds now, but disclosed funding will lag by six to nine months,” he predicts. “VCs don't stop working in volatile periods; we just get quieter. The capital is moving — it’s just not visible yet.” Nadim expects a rebound in activity throughout 2Q 2026, though public data may not reflect it immediately, he said.

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