In May 2011, Amad Almsaodi quit his job at Boeing in the United States and headed to Cairo to start an online property portal, Aqarmap, in the midst of a revolution that scared off investors. He bet that Egyptians will invest in real estate as a safe haven during political instability.
The move seemed counterintuitive to his backers, but the Yemeni entrepreneur, who studied and worked in the US, was driven by a bigger goal. He wanted to return to the Arab world to build a successful business and show the Yemeni youth, hailing from the region’s poorest country and now torn by civil war, that it was possible to thrive in the region.
"I started the business specifically to create an inspiring success story, I wanted to prove to the young, educated generation in Yemen that we can create a business that can compete and that we can become producers rather than just consumers," Mr Almsaodi says.
Egypt, the Arab world’s most populous country, requires between 175,000 to 200,000 new residential units every year to meet a shortage of about 3.5 million houses, according to Savills, the London Stock Exchange-listed global real estate provider. Savills announced plans in December to expand to Egypt where it sees signs of expansion in the real estate market. The economy is showing signs of recovery as the government implements a reform programme backed by the International Monetary Fund to bolster growth and repair public finances.
Aqarmap, a property services and classifieds website that connects buyers with sellers, was launched in Egypt to capitalise on the country’s talent pool, thriving tech scene and the sheer size of the property market. Though many questioned his decision to enter the market during the 2011 revolution that ousted President Hosni Mubarak, Mr Almsaodi was convinced of Aqarmap’s potential.
“I very quickly learnt Egypt is a great market and despite the political instability then, it’s a massive market,” he says. “It was a good time because Egyptians were buying property to secure their savings.”
But the start-up saw business plummet in 2012 when it felt the effects of the situation and cut back staff to four people from a team of 18.
The year “2012 was really hell for us”, he says. “We talked to investors worldwide but things looked bad to them from the outside. We were hustling. The only thing that saved us was the strength of the real estate industry.”
Business began to pick up in 2014, Aqarmap became profitable, grew to 30 employees and re-invested its profits to expand into Saudi Arabia.
Aqarmap estimates that Egypt is the biggest real estate advertising market in the Arab world with an estimated value of $500 million (Dh1.83 billion) annually compared to $200m in the UAE, according to its internal research.
“It’s a no-brainer,” he says. “It’s a volumes game. A single developer would launch 30,000 units and tends to advertise heavily to sell this inventory.”
In September Aqarmap announced it had closed its third round of funding from UAE-based Wamda Capital, Kuwait’s KISP Ventures, Saudi’s Raed Ventures and a group of family businesses from Egypt and the GCC.
The funds will be used to drive expansion in Egypt, develop business in Saudi Arabia and seek acquisitions to grow in new markets, Mr Almsaodi says, declining to reveal the amount raised.
Aqarmap is looking to enter Oman, Kuwait, Morocco and Algeria by acquiring local partners in those markets.
“If we find the right match, we’d start immediately,” Mr Almsaodi says. “We’re not close to that yet.”
The company is currently in “early stage” talks with investors to raise more funds to further grow its presence in Saudi Arabia when the time is right.
“Now is not the right time, but it’s approaching and we don’t want to be too late,” he says, adding his prediction that “the market slowdown will not last for longer than 2019”.
Aqarmap, which is growing at a rate of 20 per cent month-on-month in terms of the number of advertisers on the website, is eyeing further growth next year, Mr Almasaodi says. He declined to provide revenue and profit figures or targets for growth.
The tech start-up has grown to 165 employees this year, serving two million visitors a month and getting 250,000 leads monthly – an industry term for the number of customers sending requests to developers or brokers with interest in buying or renting a listed property.
It facilitated sales of more than 15,000 properties worth 12bn Egyptian pounds (Dh2.46bn) in 2017.
Aqarmap, which competes with other online property marketplaces such as Dubai's Property Finder and South Africa's OLX, continues to be approached since 2014 with offers from international media groups to acquire its business but is "too early" to sell now.
“In future, it’s a possibility,” he says. “Right now, we have a love of value to create and want to achieve a level of success we can be proud of.”
One of the challenges facing Aqarmap is the geopolitical instability that closes off markets such as Libya or Syria and limits the scale for potential growth.
Competition is also heating up as UAE rival, Property Finder, which raised $120m in November, is planning to expand to its existing markets in Egypt, Saudi Arabia and Morocco, among others.
Mr Almsaodi says he is confident his business is defensible with the historic data it built in the Egyptian market that can be used to forecast future trends. Aqarmap publishes reports on property demand and prices and has developed a property valuation tool.
He is bullish about the Egyptian market’s outlook for 2019, where he sees the market growing at a “healthy rate” and sees “huge demand” for affordable housing for the next 30 years.
The market’s medium- to long-term outlook is “encouraging” as the Egyptian pound stabilises after flotation and investment increases, Oxford Business Group said in a report on the outlook for Egypt’s real estate market.
“A sector that has long been viewed as a safe financial bet in the country is likely to maintain this reputation in the coming years,” the report said.
For Mr Almasoadi, who founded an online shopping website GoYemen at age 18, the endgame is to help in the efforts to rebuild Yemen by encouraging young entrepreneurs to succeed.
Profile of Aqarmap:
Company name/date started: Aqarmap (May 2011)
Founder/CEO name: Amad Almsaodi
Based in: Cairo, Egypt
Sector: Online real estate marketplace
Size: (employees/revenue): 165 Employees, revenues undisclosed
Stage of funding: Profitable
Investors: UAE-based Wamda, Saudi-based Raed Ventures, Kuwait-based KISP Ventures and several real estate family businesses
Q&A with Aqarmap founder Amad Almsaodi:
Q. Who first invested in you?
A. Fadi Ghandour, Jamal Almuttareb, Rashid Alballaa
Q. What already successful start-up do you wish you had started?
Q. What is your next big dream to make happen?
A. To have an active role in rebuilding Yemen and give hope to young people there
Q. What new skills have you learnt in the process of launching your start-up?
A. People management, sales, investor negotiations and crisis management.