Gitex 2006 saw Egypt's Technological Development Fund produce some significant gains in the two years since its inception. Sherine Abdel-Razek reports The booth bearing the name of the Technology Development Fund (TDF) was one of the busiest in the Egyptian pavilion at the Gitex exhibition in Dubai. Products of the IT companies affiliated to the fund like the Quran reciting programme, HAFSS, the bilingual virtual private lessons application, OstazOnline, together with Coltec's Arabic language proofing software, seemed to be selling like hot cakes. The five-day long Gitex concluded with representatives of those companies busy either signing or negotiating deals with interested visitors. "It is the first time that the fund participated in the event. We waited for two years till we had a diversified portfolio of companies and products that we are proud to show," explained Ahmed Gomaa, a TDF consultant and CEO of Ideavelopers, which acts as a fund management advisor to the TDF. "Now, with most of our companies crossing the early stages of starting up, we are ready to be there," he added. TDF is an Egyptian public- private partnership investment fund that focuses on the communications and information technology sector and aims to invest in IT start-ups. TDF provides these companies with investment ranging between LE1-6 million, with an average timeframe of three-five years to realise their investment and arrange a successful exit. In addition to financing, selected companies have access to a wide range of services provided by Ideavelopers such as assistance in assessing investment opportunities, portfolio management and provision for strategic and consulting services to the companies. Such small-sized companies, according to Gomaa, sometimes lack the abilities to recruit high worth law firms or advisors to help in negotiations to strike the best deals. He cited an example of a company that was about to finalise a contract with a multinational which included a condition giving the latter the right to develop the product without consulting the main vendor -- something unheard of in the industry. "When we recruited a distinguished law firm, they succeeded not only in abolishing this term but [managed to] raise the value of the deal five-fold," he added. Nine IT companies have joined the fund since its establishment in 2004; some began merely as ideas in their founder's heads, while others joined TDF as going concerns. Only six of these companies participated in Gitex as the products of the other three are targeting European and American IT markets alone. "My company, RDI, has individually participated in Gitex several times before," stated their CEO, Mohsen Rashwan. "However, this time was different as the TDF and Ideavelopers made it easier on us by organising everything, starting with a Public Relations campaign before the event and arranging with the Information Technology Industry Development Agency (ITIDA) for the display space. They help a lot in promoting and marketing our products." Rashwan's company joined TDF only last year when the latter bought 20 per cent of RDI. During Gitex, RDI offered its latest product, HAFSS. This aims to teach users the Holy Quran, with an emphasis on recitation. The programme analyses human speech and gives feedback to the user informing him of any mistakes in pronunciation, exactly like real scholars would when teaching the recitation and enunciation of the Holy Book. Another product that attracted a lot of attention was OstazOnline, an e-learning technique which is the first of its kind worldwide. Through a website, school students from the fourth preliminary class up to thanawiya amma can attend virtual private lessons. "It is an interactive way of learning as a student sitting in front of a computer at home can interact with the class by using multimedia to participate in class or to ask the teacher to explain a certain point," said Ehab El-Agroudy, sales and marketing manager of Ostaz Online. El-Agroudy said that several deals were discussed during Gitex. "We are about to close one with the Egyptian consulate in the UAE to provide the service to Egyptian students living with their families there." With its first issue comprising LE50 million, the fund can accommodate two more companies. The second round will see the amount triple to at least LE150 million and is expected to open in the coming year. The largest asset allocation will be dedicated to outsourcing as well as other export- oriented opportunities. The fund's main shareholders are Telecom Egypt, the Commercial International Investment Company, Misr Insurance Co, Al-Sharq Insurance Co, Egyptian Re-Insurance Co, Misr-Iran Bank for Development and Faisal Islamic Bank. It is managed by EFG-Hermes Private Equity.
