Mentor Notes - Ecosystem Notes - 2025

At the end of every year, I sit down, collect my notes and experiences with the Egyptian startup ecosystem, and try to get a sense of where we are, collectively. Since 2017, I’ve documented challenges and suggested practical solutions. But this year feels different. I’ve been reluctant to write this year’s notes, not because there’s nothing to say, but because what I have to say is difficult to admit.

In 2025, American aid was abruptly cut, while other major donor agencies scaled back funding.The ramifications on our ecosystem have been severe. For over a decade, the startup ecosystem built its vision around donor funding. Programs were designed to attract grants, fulfill proposals, and meet external KPIs. There was always some good being done, but the underlying purpose was rarely long-term national value. It was to stay funded.

The outcome?

A wave of low-quality startups built on hope, but not on evidence. An ecosystem fluent in buzzwords, but unprepared for independent survival. Now, with the funding gone, the panic is clear. Without donors, the system doesn’t just lack cash. It lacks a reason to exist.

The Vision Vacuum and Who It Belongs

This is not a government issue. It’s not about missing laws or regulation. This is a failure of vision within the startup ecosystem itself. For years, many entities operated with one guiding strategy: “Stay aligned with donor trends, and do a bit of good along the way.”

But now, the vacuum is fully exposed. Without external agendas to follow, many organizations are drifting. They chase whatever comes next, AI, blockchain, fintech, without grounding those technologies in national priorities or user needs.

Some tried pivoting to the corporate sector, hoping the same narrative would land. But it didn’t. Corporates want results, not photographed events. They need return on value, not decks filled with vanity metrics. They won’t pay millions to “inspire young minds” unless something tangible comes out of it. And they’re right.

I’ve also seen a curious trend:

Local funding bodies choosing to support international programs over local ones. Not because those programs deliver better results. But because big names feel safer. The logic is understandable. But the outcome is frustrating:

Local entrepreneurs get branding, but not depth

Mentorship is outsourced, not contextualized

Founders walk away with toolkits and terminology, but no traction

And yet we wonder why the most promising startups don’t stick around. Over the past year, a quiet but serious trend has emerged: our best startups are moving out. They’re relocating headquarters to other ecosystems, where there’s not just access to funding, but clarity, vision, and continuity. They’re not announcing it. They’re not protesting. They’re just quietly choosing to build elsewhere.

Some will say: “But we’re building AI startups!”

To which I’d gently say: Not really. Not yet.

Most of what we call “AI startups” today are wrappers around pre-trained models built by OpenAI, Google, or Meta. There’s nothing wrong with this, but it doesn’t make us leaders in the field. And unless we invest in fundamental infrastructure, we won’t even be serious players.

According to McKinsey’s 2024 AI Infrastructure Outlook, 90% of next-gen AI applications will be limited by compute and power availability, not just algorithms. If that’s true, then Egypt has a massive opportunity.

We have:

Hydropower from Aswan

Nuclear energy underway

Abundant sunlight across the Western Desert

Strong natural gas reserves

Enough sodium resources critical for advanced battery development

Why not build our national AI strategy around energy? Let Egypt become the infrastructure for the AI age, the region’s power hub for data centers, server farms, and R&D centers. Let’s invite OpenAI, DeepMind, and others not just to use our tech talent, but to power their tech futures from here.

And AI isn’t the only story worth telling. Egypt has long-standing strategic advantages in: Agriculture – with leading institutions like ARC and regional dominance in aquaculture Livestock breeding, built on generations of embedded knowledge, and MENA’s increasing food security needs. Water infrastructure – with Nile-fed systems, desalination experience, and a rising demand for smart irrigation and filtration We are not new to these sectors. What we’ve lacked is focus and funding. With structured national strategies, targeted R&D commercialization, and smart policy, we can lead in areas the world needs. Meanwhile, young talents across Egypt are already experimenting with robotics, automation, and clean energy prototypes, in universities, in garages, in communities. What they need is not just funding. They need belief. Direction. Long-term support. As the global energy market pivots toward electrification and battery storage, Egypt’s solar potential, and smart grid expansion could position it as a regional clean-tech pioneer. The same applies for robotics, especially in agriculture, logistics, and desert infrastructure, where labor efficiency is key.

Many of our current startups are still built on the logic of now:

Fast validation

Attractive decks

Mostly solutions for now problems, that serves short term context.

But the startups we urgently need are startups of the future, designed to solve long-cycle, foundational challenges. These startups will:

Serve national needs first, then scale regionally

Work in energy, water, food, mobility, and infrastructure

Leverage deep tech responsibly

And value resilience over rapid growth

They’ll require more time. More funding. More patience. But they’ll build systems that last, not just startups that pitch well.

What Now?

We need to move beyond imported narratives. We need more than hype cycles. The future will revolve around water, food, energy, and machines that serve people. Egypt is uniquely positioned to lead in all four, if we can align our efforts, believe in our talent, and leave politics out of innovation. We already have the ingredients:

• A vibrant youth population hungry to build

• Research centers ready to fulfill mandates

• Global conditions set to align in our favor

All that’s missing is the alignment. So let’s align. Let’s build the startups of the future, today.

The future is being produced. And we must have a role in producing it. Innovation is the path. And evidence-based entrepreneurship is the process to reach it.