Egypt is striving to position itself as a global hub for technology development and digital innovation. According to Ahmed Elzaher, CEO of ITIDA, the Egyptian government is working toward “becoming a global hub for outsourcing and technology innovation, with initiatives aimed at growing the industry, cultivating tech talent and digital skills, and boosting Egypt’s competitiveness on the global stage,” he told the media in November.

That would only be possible by tapping into the country’s vast talent pool. During the AmCham Egypt Investment Conference in April, Elzaher said, “Egypt offers an exceptional platform for investors and technology companies aiming to scale regionally and globally.” 

Elzaher noted that Egypt’s annual output of more than 760,000 university graduates — including 50,000 in ICT, 171,000 in finance and accounting, and 28% in STEM fields — combined with 80% foreign-language proficiency, positions the country as a standout contender in the global services market.

With such a talent base, Egypt’s entrepreneurial ecosystem also flourishes, ranking among the top-funded startup landscapes in the MENA region by securing 11% of total funding in the first half of 2024, according to the 2024 Egyptian Fintech Landscape report by Entlaq Holding. While fintech remains the dominant sector, investment in IT solutions doubled during the same period, signaling a shift in investor priorities, the report showed. 

Backed by government support, a robust talent pipeline, and rising investor interest, Egypt is positioning itself not just as a service provider but as a creator of digital solutions. Yet, challenges persist regarding regulation, infrastructure, and investor confidence.

Distinguished talent

Egypt’s multilingual talent, adaptability to global business needs, and agile investment landscape are attracting international investments, positioning the country as a strong competitor among leading outsourcing destinations. Todd Wilcox, co-chair of the AmCham Banking Committee and CEO and Deputy Chair of HSBC, highlighted during the conference that Egypt’s exceptional human capital, stating the country is “one of the fastest-growing global service centers, growing faster than India.”   

Wilcox stressed the importance of retaining talent in the banking sector, saying companies typically lose 20% to 40% of new hires in their first year. However, HSBC’s rate of departures is below 10%. “It’s really about making sure that the support is there and that you’ve got the right hire and the right integration into the organization,” he said. Mohamed Refaie Ahmed, global enterprise networking services practice leader at IBM, discussed the unique Egyptian talents, language, skills, and reliability, which further encouraged IBM to expand in Egypt. Compared to other countries where IBM operates, including India, Canada, and Latin America, Egypt stands out due to its advanced road infrastructure and relatively short commute times.

Egypt’s skilled talents also prove successful in attracting venture capital investment for startups. Magnitt’s FY 2024 venture investment summary report showed that in 2024, Egypt secured more than a third of Africa’s total venture capital funding. “Egyptian startups raised a total of $329 million across 78 funding rounds/deals, although this represented a 21% year-over-year drop,” said Enan.

Private equity is gaining momentum

Amal Enan, Managing Partner of 500 Global, a venture capital (VC) firm, said the global VC capital and private equity ecosystem has faced liquidity challenges over the past two years. “There are high  hopes for 2025 to stabilize the market with anticipation of seeing more liquidity and more distributions in the market globally,” she said.

Despite existing challenges, Enan said it’s still more advantageous for Egyptian investors to invest in their home country, where they can see opportunities and navigate challenges. “They can also have better sources of information, better influence, and control over the outcome and returns.”  

“There is now much more interest in diversifying away from the United States and investing in emerging markets like Egypt,” she said, “where we see a lot more opportunity and talent and where governments are making significant efforts to attract and support investors.”  

Mergers, acquisitions, and consolidations can be effective strategies for driving investment and business growth. “Consolidation will have to happen to fix the market,” Walid Hassouna, CEO of ValU, said during the Investment Conference. In Egypt, starting a greenfield project via market expansion has become very difficult, so we wanted to have more bandwidth for our team to look at opportunities. Greenfields will work in some small markets where there is no competition.”

He stressed, “Given the current regulatory environment, I anticipate significant consolidation in the consumer finance industry.” Companies will likely pursue mergers, acquisitions, and capital increases to meet regulatory requirements and accommodate the industry’s rapid growth, particularly since its inception in 2020. “Consequently, we can expect heightened activity from various players interested in the sector, especially following the halt in issuing new licenses.” 

According to research by PwC in May, Egypt’s M&A market grew significantly in 2024, driven by economic reforms, privatization, and strong foreign investment. PwC anticipates continued growth in 2025 with key deals in fintech, hospitality, and energy.

Fintech’s growth engine 

Despite such volatility, the fintech sector has made progress. According to the Egyptian Fintech Landscape report, Egypt is third in fintech VC investments and third in fintech talent and experience in the MENA region. 

The 2023 report stated that total investment in fintech in 2022 was $796.5 million, with VC investors contributing $358.8 million and private equity investors contributing $437.7 million.

During the conference, speakers emphasized the significant role fintech plays in expanding access to financial services, particularly for those underserved by traditional banks. According to Mounir Nakhla, founder & CEO of MNT-Halan, “Fintech is democratizing access to financial services. As we are living in the age of information, hyper-personalization will be necessary to provide specific services through fintech and technology, with a large amount of data and large language models.”

Nakhla said AI solutions in fintech “enable hyper-personalization by leveraging data to deliver customized financial services to individuals. With technology proprietary, we can launch any additional product very easily.”

He added that credit scoring models are increasingly utilizing large language models and extensive data to enhance accuracy. By integrating value-added services, such as e-commerce platforms, fintechs can gather detailed insights into consumer behavior. 

Nakhla noted that features like trivia games on MNT-Halan’s app encourage users to upload their contact lists, allowing them to create social networks. That helps MNT-Halan identify connections among users. All these data points feed into credit scoring in MNT-Halan’s models, making them more robust and reliable.

Challenges persist 

Heba Shahin, CEO and executive director of Erada, emphasized that implementing IT infrastructure is a complex issue, particularly in light of laws governing cybersecurity, consumer protection, and data protection. 

In Africa, such laws are often bundled into a single convention, which does not fit all countries. According to research and African leaders, she said, “It became clear that stakeholders and businessmen prefer these laws to be split into more specific conventions, such as a dedicated cybersecurity convention.”

Karima El Hakim, co-chair of AmCham Leadership and Diversity Committee and country director of Plug & Play Egypt LLC, underscored that “ensuring that early-stage fintech companies … receive adequate support from their investors and the broader ecosystem is crucial.” 

Such support should focus on helping companies communicate effectively about governance and licensing requirements. By doing so, they can establish trust and credibility, which are crucial for their growth and success in a highly regulated industry.

Amr Abouelazm, co-chair of the AmCham Non-Banking Financial Institutions Committee and vice chairman and CEO of Erada Microfinance, said the most significant challenge to investment over the past few years has been the shifting macroeconomic landscape, particularly foreign exchange market volatility and a growing hesitancy among investors to engage in the region.

“These challenges still persist today. However, Egyptian investors have stepped up significantly when foreign investors withdraw,” said Abouelazm. “Angel investors and individual investors within Egypt have provided crucial support to startups, not only with funding but also with their experience and wisdom.”

That is mainly because new entrepreneurs are increasingly recognizing the value of local expertise, understanding how experienced investors can support them in securing funding, managing risks, and achieving sustainable business growth, he added. 

The current challenge lies in the speed of implementing regulatory changes and reforms to enable the market to reach unbanked segments in dire need of different financial services, he said. “By addressing these needs, we play dual roles in both financial and social empowerment, striving to create a more inclusive and supportive environment for all.”  

Hassouna emphasized the importance of fostering social impact, which affects two key areas: growth and the brand. “Focusing on social impact in Egypt is a winning strategy. We can make a significant difference in various areas by prioritizing social impact.” 

“We aim to serve customers who are often overlooked by traditional financial institutions, such as housewives, freelancers, and even celebrities, who face challenges in securing underwriting due to perceived risks,” he said. “Additionally, we offer discounted interest rates or even loss-making programs in sectors like education and healthcare, demonstrating our commitment to social empowerment and support for underserved segments of society.” 

Rising hub

Driving digital innovation and optimizing offshoring are central to Egypt’s national strategy. Elzaher emphasized the government’s vision “to position itself as a leader in the digital economy,” and to become the premier offshoring hub for the Middle East, Europe, and the world.

Egypt’s digital offshoring strategy, he said, aims at “creating employment opportunities, increasing export revenue, and creating a recognizable brand.” According to ITIDA, Egypt is a leading offshoring hub offering customer service, IT support, digital marketing, and human resource and payroll functions. 

Outsourcing services stand out with more than 180 international and local companies currently operating over 200 specialized centers exporting digital services, according to Minister of Communications and Information Technology Amr Talaat in March.

“The ministry is committed to creating a supportive environment for investment by providing advanced digital infrastructure, forward-thinking policies, and extensive training programs designed to equip the workforce with the technical, linguistic, and professional skills needed for global markets,” said Talaat. 

Kearney’s Global Services Location Index 2023 ranks Egypt 23rd out of 78 outsourcing markets. Egypt’s digital exports grew 26% to $6.2 billion in 2023 from $4.9 billion in 2022.

The fintech ecosystem is also receiving support from the government. Ahmed Yehia, CEO of fintech and digital Lifestyle at e& Egypt, a telecom operator, highlighted during the conference that “the government support we receive from the CBE (Central Bank), the advanced financial infrastructure, and the good talent we access are the success elements behind progression.” 

However, upskilling is necessary to meet the high demand for talent. “The market today is highly competitive, with demand far outpacing supply,” said Yehia. “To keep up, we must be well-prepared for what’s ahead, while working closely with ITI and NTI to develop the necessary talent and meet growing regional demand and organizational expansion.”

This article first appeared in June’s print edition of Business Monthly.