In 2020, the co-founders of Egyptian start-up Technopolitan saw an opportunity in the global rise in demand for remote working due to the Covid-19 pandemic.
That led them to set up the property technology start-up, which has transformed underutilised spaces in Cairo, such as club houses and restaurants, into flexible work environments that can produce recurring revenue and footfall.
Technopolitan is also building its own longer term co-working spaces, branded as Copolitan, and offering technology services to companies through a third line of business, Spaceware.
However, as the PropTech has scaled up, it has run into unexpected challenges over the past year.
The economic fallout of the Russia-Ukraine war has hit Egypt hard, resulting in supply chain challenges, record inflation and a weakening of its currency after several devaluations.
“From the real estate side … every devaluation that has happened [since last year], there is a struggle to finish the construction work and fit-out,” Technopolitan co-founder and managing partner Mohamed Ashraf tells The National.
Undeterred, the founders have ramped up plans to expand to Saudi Arabia, the Arab world’s largest economy, and expect to open an office there by next month.
“We’re always optimistic,” Mr Ashraf says.
“We’re very flexible to change our direction when we find problems happening.”
The global PropTech market, referring to the use of technology and innovation within the real estate industry, is expected to grow to $86.5 billion in 2032 from $18.2 billion in 2022, according to Future Market Insights.
In Egypt, there are still relatively few players in the co-working space.
MQR, formerly AlMaqarr, was ahead of the curve when it was founded in 2012. It now has 11 locations in malls, universities and business parks throughout Cairo, as well as Menoufia in the Nile Delta, El Gouna on the Red Sea and Aswan in Upper Egypt.
Co-55, founded in 2019, has two large locations in malls in east Cairo.
The trendy Consoleya co-working space in downtown Cairo opened its doors a couple of years ago. The 95-year-old downtown Cairo building was once home of the French consulate in Egypt and was renovated as part of the Al Ismaelia real estate investment project.
Technopolitan’s five co-founders — Mr Ashraf, Ahmed Shakib, Fatma Ashraf, Hesham Enan and Mohamed Dessouki — have a background in technology with experience in companies such as Cisco, Orascom Telecom, Nokia, Vodafone, Alcatel and Ericsson.
“We’re a technology set-up that serves the real estate sector,” Mr Ashraf says.
“We know the pain that comes out of the commercial and real estate industry in general and we wanted to create an all-in-one platform that manages the landlord in any space and the tenant using the space.”
Its Moca app — which stands for “my office and coffee assistant” — allows people to book a workspace or meeting room by the hour or day. A day pass starts from 200 Egyptian pounds ($6.50).
Moca users, who include freelancers, hybrid workers and students, are also able to order food and beverages, set up meetings and track their schedules through the app.
“The new generation in general doesn’t want to work in the way we worked. They don’t want to work in closed offices with a Polycom … They want to have their earphones, they use Zoom, they want to sit in the sun and natural light. They don’t want to come into the office five days — they want to come two or three days,” Mr Ashraf says.
The current Moca locations include the upscale Palm Hills club in the 6th of October suburb west of downtown Cairo, U Bistro in the island district of Zamalek and Fuel Up in east Cairo.
A fourth location is planned in the 1920s boutique hotel and restaurants, a 100-year-old villa in the culturally-rich district of Heliopolis.
For its contractual Copolitan brand, the start-up is creating an office space in the Palm Hills compound and fitting out a 1905 Heliopolis building constructed by Belgian industrialist Baron Empain.
The focus for Spaceware, on the other hand, is exclusively Saudi Arabia and potentially other Gulf countries.
“On the tech piece, we see the path coming from the Gulf more, whether on funding opportunities or solid business opportunities,” Mr Ashraf says.
“Tech on its own — Egyptians put it in the drawer.
“PropTech always rings a bell when you talk to any Saudi investor,” adds Mr Shakib, head of research and development and innovation.
Spaceware was part of the King Abdullah University of Science and Technology’s Taqadam six-month accelerator programme that ended in March. The team was also awarded a $40,000 grant.
Overall, Technopolitan has secured working capital of $200,000 from co-founders and partners and another $250,000 in seed funding.
The start-up is planning a series A round, but not before the first quarter of 2024.
“We’re trying to increase our valuation, to have more locations operative, to validate better the technology and to have two or three awarded businesses in Saudi,” Mr Ashraf says.
The three-year plan is to build up 5,000 square metres for Moca and 25,000 square metres for Copolitan, and have 100,000 square metres in Saudi Arabia operated by technology.
So far, about 800,000 square metres in the kingdom are in the pipeline, which means closing just 20 per cent would surpass their goal.
“That’s why Saudi looks fruitful,” Mr Ashraf says. “If these come in, I won’t need funding. I would only need funding to scale.”
The founders hope that they will be able to start breaking even by mid-2024 and be profitable by the end of next year.
They could look to other markets, but the UAE, for example, is already saturated and smaller, he says.
“Saudi gives you both. The market is not yet crowded and even if it gets crowded, it’s still huge,” Mr Ashraf says.