Egypt’s edtech sector is booming and it’s heading abroad: In almost every edtech press release that Enterprise comes across, startups always seem to mention that they are — or are planning to — expand into the Gulf. We spoke with industry insiders to find out what is driving Egypt’s edtech startups to make the move abroad to our Gulf neighbors and why Gulf venture capital firms are so eager to get a piece of our edtech startup scene.

Remember: In just the last few months, we heard from iSchool that they’re planning to expand into Saudi Arabia, the UAE, Oman, Qatar, Kuwait, and Bahrain, with sub-Saharan Africa on the cards for 2025. Post-acquisition Orcas is also hoping to expand into Saudi Arabia, Bahrain, Jordan, while Akhdar and OBM also name check KSA in recent press releases.

ICYMI- It’s been a good year for Egyptian edtechs: Tutoring outfit Orcas was wholly acquired by Kuwaiti edtech Baims for an undisclosed sum earlier this year, while gamified classes creator iSchool raised USD 4.5 mn in a round led by Irish VC VentureWave only the month before. Gulf VCs have also been investing big in local edtech firms —- Saudi accelerator Value Makers Studio (VMS) has recently made six-figure USD investments towards Arabic-language audiobook summary and education platform Akhdar and student career advisor OBM Education.

SO WHY THE GULF EXPANSION?

Expansion abroad = FX: The instability of the national currency limits startups’ valuations and consequently their fundraising capacity, but firms with a profile in the Gulf will receive greater access to markets where transactions occur in foreign currencies, Moataz Abouonq CEO of VMS told Enterprise. “This diversification of revenue streams not only contributes to financial stability, but also positions startups favorably for international financial transactions, mitigating risks associated with currency fluctuations,” he added.

Startups are struggling to pay for services and supplies with local credit cards following FX limits: After the central bank restricted FX transactions on local currency credit cards to EGP 7,750 per month (about USD 250 at the official rate) in October, every business without access to FX that needs to pay Google or Microsoft — or that wants to run an ad campaign online, pay for cloud infrastructure, subscribe to a monitoring service, or pay for an industry-specific software tool — has been struggling to keep these services online. “In the short-term, business will have to survive by going to other markets,” Acasia Ventures managing partner Aly El Shalakany told Enterprise in December.

The Gulf over Europe is a no-brainer: For any local startup looking to become a large company, it needs to be multinational, which is why it makes sense to start regionally, Baim’s CSO Hossam Taher told Enterprise. The Gulf and wider Middle East have a culture of tutoring and after-school learning that is not as present in Europe, not to mention that startups looking outside of the MENA region would face higher taxes and competition, he said.

** We spoke with Hossam Taher for a Blackboard deep-dive into the Baims’ acquisition of Orcas the day after the news broke back in January. You can check out our conversation here.

Our edtechs have the edge on localizing their offerings: Egyptian edtech startups have been able to quickly understand customer behavior in the region and integrate into the market well on the back of a shared language and common cultural values, Abouonq said. On top of this, the talent pool in Egypt is “very sophisticated and highly competitive because everyone is competing for such a small number of jobs,” Taher told us.

And it’s also mutually beneficial: Gulf VCs look to Egyptian edtechs to address the region’s educational needs, Abouonq told us. Initiatives such as VMS’ Bridge Program aim to facilitate the entrance of Egyptian startups into the Saudi market and contribute towards national education targets.

But Egypt still remains a great place to launch startups: “Egypt is a diverse, huge, and cheap market, meaning you can practically launch anything and experiment with it at a very low cost, and then end up exporting that product or that service or that offering elsewhere. The level of maturity and know-how that we can reach in such a short time in Egypt cannot be compared with anything in the region,” Taher told Enterprise.

Your top education stories for the week:

  • Vocational training initiative aims to qualify 1 mn Egyptians: The Labor Ministry announced the launch of an initiative — dubbed Mehany 2030 — to train and qualify 1 mn young Egyptians for local and foreign vocational markets. (Statement)
  • Teachers and university faculty to get pay bump: The presidency introduced a raft of social support measures worth EGP 180 bn last week to alleviate the effects of the ongoing economic crisis on citizens, which included EGP 15 bn dedicated to increase the wages of doctors, nurses, school teachers, and university faculty.
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