Saudi venture studio VMS has acquired a minority stake in Egyptian start-up accelerator Cash Cows as part of a strategic partnership agreement designed to support the entrepreneurial ecosystem in both countries.
The partnership aims at bringing together resources, expertise, and support to help startups in the region grow and succeed, Cash Cows said in a statement on Sunday.
The two companies agreed to collaborate to provide resources and support for start-ups and investors in the Middle East and North Africa.
“Supporting start-ups and entrepreneurship has become a priority for the future of the Saudi economy. This is reflected in the performance of companies and the successful financing deals achieved,” said Ahmed Reda, managing partner and chief executive of Cash Cows.
“Supporting start-ups is an essential part of Vision 2030. Hence, our expansion into the Saudi market through our partnership with VMS is a golden gateway to enter this promising market.” Reda added.
The partnership between VMS and Cash Cows involves the launch of a joint platform for exchanging ideas, collaboration and mutual learning among start-ups, investors, and entrepreneurs.
Motaz Abuonoq, founder and chief executive of VMS, described the company’s expansion in the Egyptian market as an “important and strategic goal.”
VMS supports start-ups by providing guidance, financing, networking, as well as investment opportunities.
Cairo-based Cash Cows helps start-ups to refine their operations and create growth strategies, resulting in investment deals at various stages of financing.
The partnership with VMS will contribute to building a bridge between Egypt and Saudi Arabia for start-ups, expand the scope of operations for both companies, help discover more opportunities, and support the growth capabilities of start-ups, said Mohamed Nagaty, a partner at Cash Cows.
The agreement will see VMS providing its expertise in Saudi Arabia to Cash Cows, including business development and marketing, gaining government support, legal and accounting expertise, and access to investors and financial funds.
Cash Cows’ portfolio of start-ups involves Egyptian medical analysis platform CheckMe, fuel supply platform GoFuel, health information exchange platform Healthtag, discounts and coupons platform Waffarha, and education technology platform IQ, among others.
VMS’s partner list includes Saudi pharmaceutical manufacturing company Dawafast, Chart, Mobelia, and iSchool.
VC Funding
The UAE, Saudi Arabia, and Egypt collectively have the lion’s share of venture capital funding in the Middle East region, accounting for about 74 percent of investments as of 2022. The three countries attracted funding worth $1.19 billion, $987 million, and $517 million, respectively, according to data compiled by start-up data platform Magnitt.
VC funding in Egypt surged by 3.2 percent annually in 2022, but with the number of deals going slightly lower to 160, from 165 in 2021, the data showed.
Overall, 749 scale-ups across the Middle East region – excluding Israel – have raised over $19.5 billion cumulatively over the past decade, a report this month by the Dubai Chamber of Digital Economy showed.
The Dubai chamber defines scale-ups as start-ups that have raised $1 million or more in capital.
