HIMangel, the leading early stage fund in Egypt

This interview was held by Burak Buyukdemir and the article is written by Nardine B. M’barek a contributor author at Startup Turkey.

Motaz Elewa is an Egyptian entrepreneur and Associate who has been working for the Angel Investment Fund HIMAngel since 2017. It was founded by Khaled Ismail who is known as one of the first entrepreneurs in Egypt during the 1990s when he sold his company to Intel. Motaz Elewa graduated from Cairo University in 2008 with a Biotechnology bachelor degree, then pursued his higher education in Germany, and got his Master Degree in Renewable Energy Management from the Albert-Ludwigs-Universität Freiburg. He is a partner in two startups; Biodiesel Misr and Mogassam.

HIMangel is an early-stage fund that supports startups and helps them to grow. It was found in 2017 and is based in Cairo, Egypt. Khaled Ismail is the General Manager of the fund where they create opportunities for startups to succeed and grow. Added to their investment, they also offer startups mentorship, early-stage business building, and direct connection with stakeholders.

Before HIMangel, Khaled Ismail was an Angel Investor himself. At that time, Khaled had around 7 companies in his portfolio of investment, to which 6 other companies were added when HIMangel was first created, ending up having 18 companies as a whole currently. Motaz Elewa stated that almost every two months they close up with a startup, their tickets are designed for early funding and are estimated to be around $ 150 to $ 250 Thousand. By now, they have special interest to invest in fields such as waste management and healthcare, however, they do have other startups that fall under other sectors such as gaming, deep technology, and marketplaces.

When it comes to the geography of the fund, HIMangel focuses on Egypt only and on the promotion of Egyptian startups mainly. The reason why their focus is always on Egyptian startups is that they always thought that there is not enough early seed funding in the country which most startups would need and that this fact makes it difficult for them and prevents them from growing and moving forward with their projects. The fact that Egypt is lacking early seed funding is considered by the HIMangel team as a big void which they are trying to fill thanks to their early seed funding and focus on the country’s startups. The companies that they focus on are those who already made some tractions before seeking investment, it does not need to be something big, but at least, after having some traction, they would understand how their revenue models will be in the future following the funding.

The startups’ selection is sometimes based on the events held in Egypt which they would attend to discover the new Startups. However, most of the startups actually come from direct contact with them. Other investors sometimes put them in the relationship with some startups that they think HIMangel would be interested in. In order to get a chance to be invested in by HIMangel, the companies need to already have a viable product and already tested their market. Almost all of the companies that HIMangel invested in so far were in this stage where they had already built a product that is going to last, and understand their customers and their needs as well as how to satisfy those needs. As an early seed funding, HIMangel considers the existence of a good relationship with the consumers crucial to every startup in which they would invest.

Being investors, they have some “red flags” when it comes to the selection of the startups. For instance, whenever some startup did not study the market well and does not have any competition, or even when the team thinks that they do know everything fully, while that knowledge turns to be quite superficial. The relationship between the team members and the startup’s co-founders is also really important, they need to be cooperative, understand each other, and most of all, know how to work together in order to make their startup and product successful. They also aim at having a long-term relationship with the startups that they invest in, that is why if a good and strong relationship does not already unite the team members, then it would be a little difficult to build it between the whole startup team and HIMangel. Without these features, HIMangel’s team believes that a startup would not be able to survive in the future, thus they avoid investing in it.

The product that the startup is offering is very important when it comes to deciding whether to invest in it or not. We asked Motaz Elewa about how do they judge or know whether a product is good enough for the market or not. Motaz then responded that the product is very important for them, that is why they take their time and go back and forth between trying to know if the product is fit for the market or not, and whether the product satisfies the consumers’ needs as well as expectations. They keep analyzing and studying all the hypothesis related to the product and its viability before deciding whether to invest in it or not. They also keep asking the startup’s team about their product, and how much they are confident about it, these answers will help the HIMangel team define whether the product is going to be successful in the future and whether it deserves to be invested in.

As a last question of the interview, we asked Motaz Elewa about his opinion concerning the famous quotation “launch fast, fail fast”. Motaz agreed with this saying, stating that there are companies who aim at conquering the market and going really big with their product, this is not an easy step to achieve. That is why, these companies need to take things slowly, and carefully while studying every hypothesis possible, and every plan that would make them successful instead of just going fast and big since the beginning which would result in a total failure.

─ March 21, 2019