Funding is flowing North, and Enza Capital is paying nearer consideration

After landmark acquisitions like InstaDeep and Expensya, proof of the area’s rising ecosystem maturity, North Africa has drawn elevated investor consideration over the previous two years. Its proximity to Europe’s huge shopper market and entry to deep Center Japanese capital swimming pools solely add to the attract.

In 2024, Egypt recorded the quickest development in fairness deal exercise in Africa, with 48% extra rounds than in 2023. Morocco was the sixth most energetic African nation and one of many few markets exterior the highest 4 to lift over $50 million. Up to now in 2025, Egypt trails solely South Africa in funding, having raised $339 million within the first half.  Traders have parked their capital within the area’s fintech sector, particularly with funds and credit score,  alongside the proptech and shopper commerce sectors. 

Amidst all this exercise, companies are racing to rent and deploy capital. Amongst them is Enza Capital, a pan-African fund that invests between $250,000 and $5 million in startups throughout a number of sectors. Not like typical early-stage buyers, Enza can deploy as much as $20 million in follow-on rounds and take long-term positions in its portfolio firms.

This week, I spoke to Abdelrahman Hassan, the principal at Enza, to know how Enza thinks about North Africa and why it has tripled its regional portfolio in two years. Though Enza is headquartered in Nairobi, Hassan relies in Cairo, the place he leads the agency’s North African technique and has backed regional startups resembling PharmacyMarts, Olive, and Manzil.

“At Enza, our core thesis is backing founders and groups utilizing expertise to unravel massive, significant issues throughout Africa,” he mentioned. ”We again entrepreneurs reimagining how Africans reside, work, transfer, earn, and thrive, typically the place infrastructure is damaged, outdated, or nonexistent.”

His agency focuses on monetary providers, logistics, healthcare, local weather, and human capital. Hassan describes them as sectors the place compounding benefits construct moats over time. 

“Capital is simply a part of the puzzle. We additionally assist founders with expertise, product technique, narrative, and governance,” Hassan mentioned. “The truth is investing in Africa typically means constructing the circumstances for fulfillment. We assist our firms fill the gaps.

Our dialog covers Enza’s funding technique in North Africa, the way it helps founders, how the agency thinks about exits, how restricted companions take into consideration North Africa, and what to keep away from when getting into the area. 

This interview has been edited for size and readability.

You moved from an impact-first fund (Conceivable Futures) to a return-driven VC (Enza). How did that shift your mindset?

The largest mindset shift was recognising that the 2 aren’t mutually unique. An organization that may not generate sustainable returns will ultimately lose its means to ship influence, regardless of how sturdy its mission. Equally, an impact-first startup will lose its means to ship influence at scale until it finds methods to construct a sustainable industrial enterprise. 

For instance, the neobanks we again serve largely unbanked customers. Affinity Financial institution in Ghana serves first-time customers. Credo democratises training entry. Though we optimise for monetary return, influence is baked in.

Income is just not a grimy phrase. It doesn’t imply abandoning values. It means constructing them right into a enterprise mannequin that may survive market cycles, so the influence compounds as an alternative of disappearing when the funding faucet stops.

We consider the following technology of breakout firms will come from fixing the toughest issues – the sort that contact tens of millions of lives. In Africa, these alternatives are in every single place. Know-how provides us the attain, however it’s the founders who flip ambition into actuality. We’re right here to search out, again and assist these groups in North Africa and throughout the continent.

Are there any exits or liquidity occasions that validate Enza’s thesis in North Africa?

We’re nonetheless early in North Africa; our deeper focus started round 2022. What validates our thesis is just not a single headline exit; it’s the regular rise of firms throughout our portfolio which might be constructing the form of important infrastructure which compounds worth over many years. Assume embedded credit score methods throughout casual provide chains, property transaction platforms in Morocco, HR portals for blue-collar employees in Egypt, and extra. 

These are companies scaling with sturdy unit economics, recurring income, and defensible market positions – development that survives market shocks and retains compounding. It’s not development for the following funding spherical; it’s development that may face up to the following market crash and nonetheless be standing a decade from now.

That mentioned, we’re not blind to the significance of liquidity, in fact. The market has already seen significant proof factors (InstaDeep, Expensya, and Paystack, to call a number of), which present that world-class firms can scale from this area and obtain sturdy exits. We consider we’re a part of the cohort of buyers and founders who will assist create the following wave of these outcomes in North Africa.

And we consider that is key – if we waited till the thesis was totally validated and de-risked, the chance for a pioneering enterprise fund right here would already be gone. Our job is to assist form the validation, to not make investments as soon as it’s a foregone conclusion.

There was elevated VC exercise in North Africa final yr, with fairness offers going up 40%. How have you ever positioned your self to seize that momentum?

We’ve been intently monitoring the acceleration in Egypt and, extra broadly, the rising momentum throughout North Africa. The rise in fairness offers isn’t only a spike in quantity; it’s a sign that the area is getting into a brand new section of maturity and buyers are rebuilding confidence in our economies.

At Enza, we’ve adjusted on a number of fronts to seize this. We’ve an workplace in Cairo and are actively constructing our presence throughout Egypt, Morocco and Tunisia. This proximity has helped us construct deeper insights, stronger founder relationships, and nearer collaboration with different buyers within the area. Strategically, we’ve doubled down as properly, rising our North Africa portfolio to 6 firms throughout Egypt and Morocco.

And we like to see this momentum. After the EGP devaluation, when most funds retreated, we moved in. That’s when the asymmetry is biggest: founders want capital essentially the most, rivals are scarce, and valuations mirror actuality as an alternative of hype. Economically, it was the optimum entry level; strategically, we noticed a chance to be a part of a future others have already written off. 

So that you’re nonetheless in build-out mode, attempting to seize development?

Precisely. I spend time in each Morocco and Cairo. Three years in the past, we had two North African investments. Now it’s six. We’re now actually Pan-African with a neighborhood presence in all 4 areas.

How do native ecosystem elements—like regulation, expertise, and infrastructure—affect the way you consider offers in North Africa?

They’re all essential contexts and feed into our remaining funding determination. For us, it all the time begins (and ends) with the group. If we again the precise founder, they may navigate regulation, recruit expertise, and adapt to infrastructure realities higher than anybody else. 

In reality, a few of our greatest investments have been made due to weak infrastructure. Assume fintechs like Oliv eradicating friction and increasing credit score entry, or AI platforms like Widebot fixing for contextualised AI options, or Yakeey creating transparency and liquidity in a fragmented property market.

That mentioned, we’re seeing encouraging tailwinds. Governments like Egypt’s are shifting sooner to maintain tempo with innovation, from the Central Financial institution enabling eKYC for digital onboarding to the FRA’s sandbox for fintech pilots to significant coverage shifts supporting digital funds and broader monetary inclusion. We’ve additionally seen focused initiatives in actual property digitisation, entry to credit score, and startup-friendly tax reforms. These strikes sign a significant willingness to adapt and construct fertile floor for innovation and scale.

Due to North Africa’s proximity to Europe and the MENA area, do you see cross-border exits as a serious motivation throughout due diligence?

It’s tempting to anchor on the headline exits (InstaDeep, Expensya) and conclude that Europe or the Gulf is the pure endpoint for North African startups. However we predict that’s too slim a lens. 

We’re a pan-African fund, and what excites us greater than a cross-border exit is a cross-border footprint. So the larger query for us is: can this firm truly scale exterior of its founding nation earlier than it will get acquired elsewhere? We’ve seen many success tales of this throughout the continent. Aza Finance, which began in Kenya and constructed FX infrastructure throughout West Africa and North Africa. Or Paystack, which solved for pan-African funds integration earlier than Stripe acquired it. Even InstaDeep, earlier than its acquisition, was constructing cutting-edge AI from Tunis to Lagos to Kigali.

Is that form of cross-border scaling sensible? Are you seeing it occur?

It’s completely sensible, and we’re already seeing it occur. In our personal portfolio, Shara began in Kenya and has expanded to Nigeria. SeamlessHR, born in Nigeria, now serves enterprise shoppers in South Africa, Ghana and Gambia. Autochek has scaled automobile financing infrastructure from Nigeria into Uganda, Côte d’Ivoire, Morocco and Ghana in just some years. Even regionally, Widebot began in Egypt and now serves shoppers throughout Oman, Saudi Arabia and the UAE.

And we consider if you try this properly, the optionality for exits multiplies: sure, to Europe or the Gulf, but additionally to African strategic acquirers and regional consolidators who worth that footprint. For us, that’s much more thrilling than constructing with just one or two offshore patrons in thoughts.

What exit paths are most sensible in North Africa?

Enza sees consolidation as one of the vital sensible and compelling exit paths in North Africa over the following 3–5 years. Strategic acquirers throughout fintech, logistics and infrastructure are more and more trying to purchase relatively than construct. We’re backing firms that sit in these crosshairs, to be acquired by establishments that realise they’ll’t construct quick sufficient. 

There are additionally exit paths alongside the street for early buyers and groups, within the type of secondaries, which we’ve seen improve out there over the previous 2 years. We’re additionally conscious of a number of firms within the area which might be additionally exploring methods to cross-invest.

Past typical verticals like fintech, are there distinctive alternatives in North Africa, like in renewables, agtech, and provide chain?

So far, Enza proudly backs 5 Egyptian firms: Oliv, Widebot, PharmacyMarts, MNZL and Bluworks. And we’ve simply accomplished our funding in Yakeey as our first funding in Morocco. 

Sure, however the extra fascinating query is why they differ.

North Africa isn’t simply one other geography on the map; it’s a distinct institutional actuality. It sits on the intersection between Europe and the remainder of Africa. On paper, it appears to be like trendy. Beneath, it’s nonetheless deeply opaque. That contradiction is a chance.

Not like different areas, the place you’re constructing from scratch (primary rails, entry layers). In North Africa, you’re typically dismantling entrenched and overbuilt legacy methods and changing them with one thing leaner and extra environment friendly. Right here, you’re rewriting the working system.

So sure, we see rising sectors – credit score for SMEs, actual property as a capital markets layer, asset-backed lending in ignored demographics, and AI utilized to fractured public knowledge. These are the form of institutional voids that get us excited.

What do founders in North Africa want most from VCs?

We truly suppose founders in North Africa (and throughout the continent) don’t want hand-holding; they want leverage.

In fact, capital issues, however it’s not the one constraint. Different components we’ve seen that equally matter are thought management with founders, entry to networks, particularly to regional and world buyers, coverage navigation and cross-border market technique. Founders know what they’re doing, and we see our job in unlocking that development.

Enza invests in sectors like fintech, logistics, HR, well being, and local weather tech. Which of these has proven the strongest traction, and why?

That’s a tough one to reply, because it differs from area to area. The truth is that in enterprise capital, we should give attention to the precise groups, the precise verticals, in the precise locations. This has developed, and continues to evolve, over time.

In fintech, we’re seeing momentum as a result of it’s foundational – it’s the layer each different sector is determined by. While you digitise funds or underwrite credit score, you unlock motion throughout all the financial system. HR/workforce platforms are gaining momentum as a result of they sit on the intersection of knowledge and embedded providers. 

We’re additionally seeing a transparent and accelerating development: on one aspect, portfolio firms embedding AI to reinforce merchandise, reduce prices, automate processes and unlock new income traces; on the opposite, AI-native startups rising right here that aren’t simply constructing for native markets however competing and profitable on a regional stage.

Enza additionally runs a Founder Accomplice Program and share carry. How’s that working in North Africa?

The Founder Accomplice Programme is the primary of its form in Africa, a mannequin the place each founder in our portfolio shares within the fund’s carry precisely because the Companions do. It means they’re not simply constructing their firms; they’re co-owners of Enza itself. This creates a deeper, extra aligned, and actually long-term partnership. We win collectively, in each sense.

In North Africa, the programme works precisely because it does throughout the remainder of the continent: each founder we again turns into a Founder Accomplice, with entry to hold throughout each of our core funds. The response from the market has been overwhelmingly constructive. It has resonated with all our founders who need a stake within the success of the ecosystem they’re serving to to create.

Your fund does a variety of follow-on funding. Does that apply in North Africa, too?

Sure, follow-ons are core to our thesis, and that completely applies in North Africa. We strategy it in two methods: from our core fund and from Enza Progress Capital LP.

Our intention is to observe on in each firm we again. For us, a follow-on isn’t simply doubling down financially; it’s a sign to the market that we have now conviction, that we’re keen to compound our dedication alongside the founder. It additionally permits us to guard and develop our place as these companies scale, guaranteeing we keep a significant companion by way of the inflexion factors that matter most.

How do you determine when to double down on a portfolio firm?

As talked about, follow-ons are core to our thesis at Enza, and we intend to observe on in each firm we again. Once we observe on, we search for three alerts. First, actual traction: not simply top-line development, however bettering unit economics, sticky clients or any proof that the mannequin works with out extreme capital burn. 

Second, readability of market management – is the corporate changing into a transparent class chief, or does it have a reputable path to changing into one? That might imply community results, proprietary knowledge, a regulatory moat, or one thing the competitors can’t simply replicate. And third, founder momentum: are they nonetheless studying sooner than the market? Are they adapting to market alerts? 

When these alerts line up, we’ll lean in, as a result of at that time, extra capital isn’t nearly extending runway; it’s about accelerating a flywheel that’s starting to show.

And typically crucial determination is the other: recognising when extra capital gained’t change the trajectory. For us, realizing when to not double down is simply as important.

What sort of LPs are enthusiastic about North Africa?

That is continually evolving. From our perspective. 4 essential varieties: impact-driven DFIs, rising market specialists, diaspora and mission-aligned household workplaces, and GCC buyers who see North Africa as a strategic bridge with cultural and operational ties.

Have you ever raised from MENA-region LPs?

Not but. Our first two funds didn’t embody MENA LPs, however given our presence right here, we’re very open to it. The objective is twofold: deepen our partnerships within the area and provides extra native LPs entry to the broader alternative set we’re constructing throughout 

We’ve been inspired by the work we’ve achieved alongside regional enterprise funds and co-investors like Algebra Ventures, Disruptech, A15 and DPI, and we see actual potential for related partnerships with institutional LPs, household workplaces, and sovereign automobiles within the Gulf and North Africa.

You describe yourselves as a founder-partner VC. What does that seem like day-to-day?

Capital is only one lever. We give attention to governance, coverage assist, expertise, and world investor entry. We don’t impose playbooks. We determine ache factors and unlock leverage.

How can we get extra native capital into African VC?

 We want extra success tales. When native buyers see founders they know construct and exit firms, they begin to consider it’s potential. In case you have a look at Egypt, the Careem story didn’t finish with the acquisition. Alumni went on to discovered 50+ startups, they usually collectively raised over $600 million. That recycling of expertise and capital is what builds confidence and attracts in native LPs, household workplaces and institutional buyers in the long run. 

We’re watching a brand new technology of founders construct actual, sturdy, high-margin, market-defining options. That’s why we don’t simply see extra wins as a chance, however a certainty. And I feel the extra seen these wins turn into, the sooner native capital will transfer from the opportunistic sidelines into extra systemic participation.

What frequent errors do world VCs make when getting into North Africa, and the way does Enza keep away from them?

In fact, not all world VCs make errors when investing in Africa, however I’d say there are three frequent issues we have now discovered. Firstly, overreliance on overseas playbooks. The considering of “it labored in nation X, so it should work in Egypt”, whereas nation X can have a completely totally different context. We take learnings from different markets, sure, however you’ll be able to’t shortcut native content material. 

The second is an excessive amount of distance and never sufficient partnership with native buyers. We keep away from this by constructing native presence and actively co-investing with regional VCs, and our Founder Accomplice Programme aligns incentives with each founder we again. 

Thirdly, underestimating institutional complexity and the way tough it’s to navigate an advanced net of laws and buyer behaviours on the continent.  At Enza, we don’t simply “dip a toe” into markets. We’ve constructed native presence in every of the 4 corners of the continent, and we continue to learn with each funding.

Our economies are rising. Our expertise pool is strengthening. Our infrastructure is catching up. We consider those that commit now (and keep dedicated) shall be a part of shaping the long run in Egypt, in North Africa and throughout the continent.

In case you might redesign funding flows into North Africa, what would you modify?

If I might redesign funding flows into North Africa, I’d begin by mobilising native institutional capital. Pension funds, insurance coverage firms, sovereign automobiles: these swimming pools exist, however they’re under-allocated to enterprise. 

Getting even a small share into early- and growth-stage funds would dramatically change the dimensions and resilience of native ecosystems. We’re beginning to see encouraging coverage strikes. 

In Egypt, for instance, banks are mandated to direct 25% of their mortgage portfolios to SMEs, nonetheless low by world requirements, however bettering. The Central Financial institution reduce charges by 3.25% in H1, signalling a extra supportive capital surroundings. We’re not off course, however the true unlock will come when long-term native capital is deployed into the riskier, high-growth layers of the market.

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