Egyptian aid convoy heads toward Gaza as humanitarian crisis deepens    Egypt, South Africa pledge to deepen development cooperation at G20 meeting    Egypt's PM orders road maintenance review, tougher penalties to curb accidents    Egypt, Novartis explore expanding collaboration in oncology, cardiology    Iran launches mass deportation of Afghans amid spying allegations    EU, China agree on rare earths, climate but divisions remain on trade, Ukraine    Association of Real Estate Developers seeks urgent meeting over threatened land deallocation on Northwest Coast    Midar partners with Adeer to develop Boulevard project in Mostakbal City with EGP 70bn investment    Over 60 million visits recorded under Egypt's Women's Health Initiative since 2019    Culture minister launches national plan to revive film industry, modernise cinematic assets    Thailand, Cambodia clash on new front as tens of thousands flee    Sudan's ambassador to Egypt holds reconstruction talks on with Arab League    UK pay settlements stagnant amid inflation surge    I won't trade my identity to please market: Douzi    Sisi calls for boosting oil & gas investment to ease import burden    Egypt welcomes 25-nation statement urging end to Gaza war    EGX to close Thursday for July 23 Revolution holiday    Egypt, Senegal sign pharma MoU to unify regulatory standards    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt foils terrorist plot, kills two militants linked to Hasm group    Egypt, Somalia discuss closer environmental cooperation    Giza Pyramids' interior lighting updated with new LED system    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Egypt, Uruguay eager to expand trade across key sectors    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Lack of financing main obstacle facing start-ups and small companies in IT sector
Sector suffers from a shortage in number of "angel investors", says El-Gebaly
Published in Daily News Egypt on 20 - 03 - 2016

The lack of financing remains one of the main challenges facing start-ups in the communications and information technology sector, and a similar crisis faces small- and medium-sized enterprises (SME).
Hani El-Gebaly, CEO and founder of AvidBeam, which specialises in technological solutions, said that start-ups and small companies in the technology sector continue to suffer from a lack of financing. He attributed this to the fact that the majority of companies in the IT sector are working towards building a product, not manufacturing.
He added that it is difficult for small companies and start-ups at this stage to provide guarantees to obtain financing, or to provide time and marketing plans for selling their products, since they are still in the development stage, which relies more on intellectual property rights. He added that these kinds of innovative ideas are difficult to finance through banks.
El-Gebaly's believes the solution is what he describes as "angel investors", as they have a clear belief in the services of the start-ups that they invest in exchange for a small percentage of the company's shares. However, the sector is suffering from a shortage in the number of these kinds of investors compared to the number of start-ups in the market.
Yehia Tharwat, head of Link Egypt, which specialises in IT solutions, said the lack of funding is the main problem facing SMEs in the Egyptian market, especially given that the majority of the sector's companies do not have the assets to enable them to obtain financing, but rely on innovative ideas only.
Due to a lack of assets, communication and IT companies are being pushed towards two entities to obtain financing. The first is the Information Technology Industry Development Agency (ITIDA), which attracts many of the companies operating in the market. The second is in specialised investment funds, such as Vodafone Ventures, Ki Angel, and Sawari Ventures.
He believes specialised investment funds do not meet the needs of the wide base of companies. In addition, there is a shortage in individual ‘angel investors', which he attributes to Egyptian investors being averse to taking risks.
One of the categories that suffers the most is SMEs working on sophisticated technological products that do not have a certain target clientele, comparable to companies manufacturing small parts in computer processors.


Clic here to read the story from its source.