Egypt’s premier financial technology and electronic payment solutions provider, Fawry is now a billion-dollar company. Fawry hit the milestone as its share price increased by about 21% from a previous EGP 18.78 ($1.18) to EGP 22.69 ($1.42), giving it a market valuation of $1 billion (EGP 16 billion).
Established in 2008 by Ashraf Sabry and Mohamed Okasha, Fawry launched into Egypt’s fintech space offering a wide range of financial services to individuals and businesses. Its services include ATMs and mobile money as well as e-commerce solutions across the country.
Fawry follows in the footsteps of a few other African startups that have achieved unicorns status. Nigerian-based Pan African e-commerce giant, Jumia Group and South African telco, Cell C had previously attained unicorn status, although neither was able to hold on to it. Interswitch, a Nigerian digital payments firm, still possesses its unicorn status.
Customers and investors helped Fawry attain Unicorn status
After going public in 2019, the company immediately attracted the support of major investors which led to its stock price shooting up significantly. Fawry’s opening share price of EGP 6.46 ($0.4) has more than tripled since that time.
Having debuted on the Egyptian Exchange in August 2019 at a share price of EGP 6.46 ($0.406), Fawry’s share price had increased by almost three times the initial public offering (IPO) to EGP 18.78 ($1.18) at a market cap of EGP 13.3 billion ($830 million) in July 2020.
Greater demand for e-payment services and virtual transactions, fuelled by the Covid-19 pandemic, yielded hugely positive returns for Fawry.
The fintech company realised EGP 47.9 million ($3 million) in net profits for Q2 2020, 25.9% more than the EGP 38.04 million ($2.4 million) it made for the first quarter.
Unicorn privileges
Achieving unicorn status will definitely put any startup on the global map. The title presents a company as credible and reputable, and as having an internationally viable and expandable model. Jumia heavily benefited from its unicorn status that many people termed it ‘Africa’s Amazon’.
The public perception of a unicorn helps to drive momentum and sharpen the company’s focus. Fawry is now in the spotlight and its profile will be the subject of consideration for external stakeholders, potential investors, consumers and target audiences.
For Fawry, this presents a golden opportunity that can be leveraged to realize bigger profits, expand its clientele and target a global audience, and sustain its economic growth.
Post-unicorn pitfalls to avoid
Achieving unicorn status is not a guarantee of future success or continued growth as Jumia would find out. Retaining that status is. Popularity fades as quickly as it comes, therefore it is important for African unicorn startups to be able to profit off the hype while it is still there.
Jumia’s market valuation, at one point over $3 billion, has plummetted to around $228 million, which is 77.2% less than its 1 billion-dollar IPO. Jumia was the first African startup to be listed on the New York Stock Exchange.
Jumia Group lost a major investor in April. Before then, the company had posted a number of big losses. Jumia’s decline may have prompted many emerging African startups and potential investors viewing the unicorn status in Africa as just hype and lacking in substance.
Fawry would be wise to deal shrewdly with press attention and public scrutiny that the company would be exposed to. The company should continue to develop its brand, widen profit margins, deepen investor trust and not be distracted by its billion-dollar tag.
Other African startups like PiggyVest, Andela, Jumo and 54Gene will be watching, while they strive to match the billion-dollar feat themselves.
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