An Exit in Egypt
These days the word “exit” in connection with Egypt often conjures the departure of a politician or business executive caught on the wrong side of historic, popular forces. Indicative, however, of a growing new narrative in successful entrepreneurship in the country, Intel announced last week its acquisition of Cairo-based SySDSoft, a leading 4G wireless software developer.
The move marks Intel’s vote of confidence in the post-Mubarak Egypt, in the earliest days of establishing a new political, cultural and economic identity. In addition, as one of the worlds leading global technology players, Intel has embraced the growing quality of innovation and engineering talent in their first acquisition in the Arab world. Dr. Christian Mucke, Vice President of Intel Mobile Communications, notes that “Egypt has a young, growing talent pool across multiple specializations, including the field of engineering, and we remain committed to Egypt as a strategic market.”
SySDSoft’s CEO and founder Dr. Khaled Ismail is a classic start-up story. Having received his PhD from MIT and the highest recognition from leading engineering institutions, Ismail founded his company out of passion and necessity. When the U.S. company for whom he built the Cairo operations failed to survive the bubble burst of 2001, he saw significant market and talent opportunity in region. Starting with two employees, he reflects on those early days, “It was not very difficult as I was blessed with a great team. My main challenge was always to find new customers abroad, who were willing to trust an Egyptian company to deliver top-notch technical work for them.” Find them he did, and as his operations grew to nearly 100 engineers, SySDSoft quickly moved from offering engineering design services to developing its own IP in the 4G telecom world. SySDSoft was named the first Endeavor High Impact Entrepreneurial Company in the Middle East in 2007.
Ismail has been active in fostering and mentoring young Egyptian entrepreneurs in technology and telecom. Between his success at SySDSoft, sitting on the board of Orascom–the largest telecom operator in the Middle East–and actively advising government and business leaders in how best to incubate new tech ideas, he is optimistic for the new generation following in his footsteps. “What will change,” he hopes, “is that young entrepreneurs may have more guts now to take the risk and hope for a good upside in case they are successful. After Jan 25, 2011, in fact, I am much more optimistic, since the overall environment is very crucial, and we hope that the change that has happened will entice a lot of young Egyptians to have a dream, take the risk, but have the patience to not simply chase quick profit.”
SySDSoft had received two offers to sell in recent years, but now, with the exponential growth in mobile services and pressure on time to market, the time was ripe to harvest opportunities in consolidation. Ismail notes, “During the past six months, there have been so many acquisitions in the domain or wireless technologies more broadly. We witnessed most of our small- to medium-size customers being acquired by big companies during that phase, which indicated that big consolidations are happening.” When Intel bought one of the leading wireless companies last August, Infineon Wireless, it also acquired one of SySDSoft’s most important customers. Ismail concluded, “We had an excellent working relationship with them. Also, Intel is one of the most advanced technology companies in the world that would allow our product, which we believe is best of its class in the world, to reach the hands of hundreds of millions very soon. Our IP is a part of their road map, and as our business is not capital intensive, we represent far less risk than other industries.”
Mucke agrees: “SySDSoft designs software IP solutions and RF/analog circuits embedded in mobile platforms and enhances Intel Mobile Communications’ existing multi-communications portfolio, specifically accelerating its 4G LTE efforts.”
Ismail will remain with Intel as the head of Intel Mobile Communication Egypt. “I have currently no other plans but to make it one of the most successful teams with Intel worldwide, and to win the 4G chipset battle such that an Egyptian product will be in the hands of more than a billion users within five years from now.”
Intel is sizing up the best approaches in Egypt and the region overall. “Intel remains committed to the Egyptian market and the region has a young, growing talent pool,” Mucke explains. “We are currently in the process of evaluating the market and the financial impact to Intel as a result of the Egypt revolution, and are working with the ecosystem on identifying how Intel can help rebuild and restructure the Egyptian PC market.”
Christopher M. Schroeder is a Washington, DC-based angel investor in U.S. companies and CEO of the leading collection of condition-specific, social health web sites at healthcentral.com. He recently returned from Cairo, Damascus and Dubai, examining the region’s start-up community, and was a delegate in the State Department Global Entrepreneurship Program as a judge for Egypt’s new venture business plan competition. He can be followed at @cmschroed.